Singapore’s Emergency Arbitrator (EA) award which restrains Future Retail from going ahead with the deal with Reliance Retail is valid and needs to be executed, Amazon told the Supreme Court on Tuesday. The US-based e-commerce giant said the EA award of Singapore International Arbitration Centre (SIAC) was enforceable and the single-judge bench of the Delhi High Court rightly gave an interim order in its favor granting a stay on the ongoing amalgamation.
Senior advocate Gopal Subramanium, appearing for Amazon, said a division bench of the high court erred in entertaining the Future Group’s appeal and granting it relief by paving the way for the deal. “The EA is not a coram non judice (not before a judge) and hence the award of EA is enforceable and the high court under the provision of the Arbitration and Conciliation Act has to act to execute it and not sit in appeal against the interim award.”
In its interim order, on February 22, the apex court had asked the National Company Law Tribunal (NCLT) not to pass the final order on the amalgamation. The Future Group had moved the tribunal seeking regulatory approvals to the Rs 24,713 crore deal with Reliance. As such, Amazon moved the top court against the order of the Delhi High Court division bench which paved the way for the Reliance-FRL deal. On February 8, the division bench had stayed the single-judge direction to FRL and various statutory authorities to maintain the status quo on the mega deal. The interim direction was passed on FRL’s appeal challenging the February 2 order of the single judge.
The Future Group, in August 2020, reached the multi-crore agreement to sell its retail, wholesale, logistics and warehousing units to Reliance, and for that, Amazon took FRL into EA before the SIAC over alleged breach of contract. The high court division bench had however said it was staying the single judge order as FRL was not a party to the share subscription agreement between Amazon and Future Coupons Pvt Ltd (FCPL) and the US e-commerce giant was not a party to the deal for amalgamation between FRL and Reliance Retail. It further said it was of prima facie view that the shareholding agreement between FRL and FCPL, the SSA between FCPL and Amazon, and the deal between FRL and Reliance Retail are different and therefore, the group of companies doctrine cannot be invoked.
Another reason which the court gave was that there was prima facie no reason to seek a status quo order before the single judge. The high court had said there were a lot of contentious issues involved in the matter and it was not going to adjudicate on them at this stage. The global e-commerce giant also wrote to the Securities and Exchange Board of India (SEBI), stock exchanges and CII, urging them to take into consideration the arbitrator’s interim decision as it is a binding order.