In a big win for Amazon, the Supreme Court on Friday ruled that the emergency award passed under the Singapore International Arbitration Centre (SIAC) rules can be enforced in India under the Arbitration and Conciliation Act 1996. With this ruling from the SC, the transaction between Future Retail and Reliance Retail will continue to remain on hold.
In February this year, Amazon has reached the apex court after the Delhi High Court stayed implementation of status quo ordered by a single-judge bench on the Rs 24,713-crore deal between Future Retail Ltd (FRL) and Reliance Retail Ventures Ltd. A week before, the HC had turned down a request from Amazon.com NV Investment Holdings to suspend the order for a week.
A division bench of chief justice DN Patel and justice Jyoti Singh observed that Future Retail was not a party to an arbitration agreement with Amazon. The bench prima facie opined that 'group of companies' doctrine could not be invoked in this matter.
"...there was no reason to seek a status quo order from the single judge... Statutory authorities like Securities and Exchange Board of India (SEBI) and Competition Commission of India (CCI) could not be restrained from 'proceeding in accordance with law'," the bench had stated in its order.
After this, Amazon approached the Supreme Court, contending that the division bench at Delhi HC should have waited for a detailed single-judge order, while urging the apex court to stay this order.
In January 2021, despite exhortations by Amazon, market regulator SEBI approved the deal between Future Group and Reliance Industries. SEBI, in a letter, had approved the deal subject to several conditions in the composite scheme of arrangement. The Bombay Stock Exchange (BSE) on its part said that it has no adverse observations on the transaction.
After securing approval from SEBI, CCI and the exchanges, Future Retail had moved the National Company Law Tribunal (NCLT) for the nod to its deal with Reliance Retail.
On 11 January 2021, Amazon wrote a letter to SEBI chairman Ajay Tyagi informing that the regulator should not give no-objection to the Future Retail transaction with Reliance as the SIAC had constituted an arbitral tribunal.
In a letter to Mr Tyagi, Amazon.com NV Investment Holdings said, "We write to inform you that the Singapore International Arbitration Centre (SIAC) has constituted the arbitral tribunal in the Arbitration Proceedings initiated by Amazon against inter alia FRL, Kishore Biyani and Rakesh Biyani."
"We wish to highlight that in view of the constitution of the arbitral tribunal, the interim award passed by the EA stands automatically extended for the duration of the arbitration proceedings unless it is reconsidered/modified/vacated by the arbitral tribunal," Amazon had communicated to Mr Tyagi.
In August 2020, Kishore Biyani and Future Group had entered a Rs25,000 crore agreement with Reliance Retail. As part of the pact, Future Group was to sell its retail, wholesale, logistics and warehouse businesses to Reliance Retail Ventures.