Delhi HC dismisses Future Group’s plea for termination of Amazon arbitration

The Delhi High Court Tuesday dismissed two Future Group‘s pleas seeking a direction to the arbitration tribunal, adjudicating Amazon‘s objections against Future Group’s deal with Reliance, to take a decision on their application for terminating the arbitration proceedings before moving any further. “Both the petitions are dismissed,” said Justice Amit Bansal, who had reserved the order on January 3 on the petitions filed by Future Coupons Private Limited (FCPL) and Future Retail Limited (FRL).

The judge said it was not for the court to interfere with the scheduling of the arbitration proceedings and no grounds for interference were made out in the present petitions.

He said the tribunal has already fixed January 8 as the date for hearing the termination application after cutting short the scheduled four days’ hearing of the expert witnesses.

Rejecting FRL’s contention that the tribunal was violating the principle of equal opportunities, the court opined that in its prima facie view, there was nothing to suggest this or that the tribunal was not accommodative towards their requests.

This court finds no infirmity in the decision of the Arbitral Tribunal in not postponing the hearings of the expert witnesses scheduled in January, 2022, the order said.

“In the opinion of this Court, acceding to such a request for adjournment, is bound to derail the arbitration proceedings as it would be very inconvenient and cumbersome to schedule fresh dates for the arbitration proceedings, taking into account the availability of all arbitrators as well as the experts,” the court said in its 21-page order.

“There is nothing to suggest that the Arbitral Tribunal has denied equal opportunity to the parties or that the Arbitral Tribunal has not been accommodating towards requests of the petitioners,” it added.

“Mere fixation of tight timelines or denial of requests for adjournment by the Arbitral Tribunal or deciding the order in which the Arbitral Tribunal considers the applications filed by the parties cannot be reason enough to contend that the orders of the Arbitral Tribunal are perverse or lacking in inherent jurisdiction,” it said.

The court also stated that lawyers representing the petitioners testing positive for COVID-19 cannot be a ground to postpone the arbitral hearings, the dates of which were fixed a long time ago after taking into account the convenience of the parties and giving ample time to prepare.

Amazon and Future have been locked in a bitter legal tussle after the US e-commerce giant dragged Future Group to arbitration at the Singapore International Arbitration Centre (SIAC) in October 2020, arguing that FRL had violated their contract by entering into a deal for the sale of its assets to billionaire Mukesh Ambani’s Reliance Retail on a slump sale basis for Rs 24,500 crore.

Senior advocate Mukul Rohatgi, appearing for FCPL, had argued before the high court that the three-member arbitration tribunal was acting perversely by not deciding the issue of termination of the ongoing arbitration on a priority basis in view of the anti-trust regulator holding that the approval granted to Amazon for its agreement with FCPL, which formed the basis of the arbitration, was facilitated by fraud.

In December, the Competition Commission of India (CCI) suspended its over-two-year-old approval for Amazon’s deal to acquire a 49-per cent stake in FCPL, FRL’s promoter, and also slapped a penalty of Rs 202 crore on the e-commerce major.

Appearing for FRL, senior advocate Harish Salve had submitted that the tribunal, which is scheduled to hear issues concerning damages from January 5 to January 7, should first take up the termination application and defer the proceedings on other issues.

Senior advocates Gopal Subramanium and Amit Sibal, appearing for Amazon, had argued that there was no denial of equal treatment by the tribunal, which has scheduled the termination application for hearing on January 8, and contended that the tribunal has the discretion to conduct its own proceedings.

Amazon is objecting to the sell-off plans, accusing Future Group of breaching its 2019 investment pact. Future Coupons was founded in 2008 and is engaged in the business of marketing and distribution of gift cards, loyalty cards and other reward programmes to corporate customers.

In October last year, the high court had declined to stay the arbitration tribunal order refusing to interfere with the Emergency Award (EA), which restrained Future Group from going ahead with the deal with Reliance.

Several issues arising from the Amazon-Future legal battle are pending before the Supreme Court.

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