Amazon moves SC in Future Retail-Reliance case

In the intense high-profile legal tussle between US-based ecommerce giant Amazon.com NV Investment Holdings and Future Group, the former, on Thursday, filed a special leave petition in the Supreme court, appealing against the recent Delhi High Court order that allowed Future Group to go ahead with its proposed Rs. 24,713 crore deal with Mukesh Ambani-owned RIL.

In its petition Amazon has contended that the Delhi High Court’s division bench, according to the arbitration Act, did not have the authority firstly to entertain Future Group’s appeal against Amazon and secondly to pass any interim order that acts against the Singapore International Arbitration Centre’s 25 October emergency arbitration order that restrained Future Group from taking any step towards the asset sale deal with RIL.

On 8 February, Delhi High Court allowed Kishore Biyani-led Future Group to continue to continue working towards its Rs.24,713 crore deal with Reliance Industries Ltd., stating that US based e-commerce giant Amazon.com NV Investment Holdings cannot interfere in the deal and the regulatory authorities such as the Securities and Exchange Board of India (Sebi) or NCLT should not be prevented from discharging their statutory duties with regards to the deal.

Debt-laden Future Group is entangled in a bitter legal tussle with Amazon over its proposed deal with RIL, which entails a sale of Future Group’s retail, wholesale, logistics and warehousing assets to two RIL subsidiaries to repay the group’s lenders.

Even though the Delhi High Court said it will pass the judgement on the matter on 26 February, the latest interim order may have a bearing on the court’s final verdict, since the Delhi High Court’s Monday’s interim order essentially means Amazon’s primary argument, which states that SIAC’s October order is enforceable in India, is not strong enough to stop the Future-RIL deal.

On 2 February, in an interim order the Delhi high court had halted Future Group’s sale of its assets to RIL. The court had ordered Biyani’s Future Retail Ltd to maintain status quo on the assets until “the pronouncement of the reserved order”.

The court had said it was prima facie of the view that the SIAC order, which asked the company owned by Biyani not to proceed with the deal, was enforceable in India.

In its petition on 25 Janaury, Amazon had alleged that the Rs.24,713 crore deal with RIL violates its investment agreement with Future Group that barred the company from selling its retail assets to Mukesh Ambani’s conglomerate among other specified entities without Amazon’s consent.

The 2 February order was against Biyani, who has recently been debarred by Sebi from the securities market for insider trading in shares of FRL in 2017.

Challenging the 2 February order, FRL, had appealed before the division bench of the Delhi high court which heard arguments for three days from both the sides.

Delhi Court on 8 February also said that FRL is not a party to the Arbitration Agreement between Amazon and Future Group.

Amazon has “no intent to procure debt-ridden FRL” which can be gauged from their agreement, the High court said on Monday.

Biyani’s Future Group has been caught in the fight between two of the world’s wealthiest men. At stake is control of India’s retail market, estimated to reach $1.3 trillion by 2025, amid a surge in online shopping.

Amazon said that the Delhi High Court’s 8 February interim order is “illegal, and arbitrary apart from being without jurisdiction”.

“It is trite law that if an order is passed under the Act, it is appealable only under the provisions of the Act and not under any other law,” said the Amazon petition.

An irreparable harm will be caused to Amazon in the event the Delhi High Court’s recent interim common order is not stayed by the Supreme Court, said Amazon.

Also, Amazon said that the court in its 8 February interim order has erroneously held that FRL is not a party to the agreement between the Amazon and Future Coupons Pvt. Ltd.

Amazon appealed to the apex court to set aside the latest Delhi High Court order.

Amazon argued that the high court should have held that the appeal (which was filed by Future Group in Delhi High Court) was not maintainable.

“…most importantly, the interference with the Single Judge Order (2 February high court order) by issuing a stay thereon is completely devoid of reasons and reduces the EA Order to waste paper…This aspect of the matter has wide ramifications far beyond the present SLP and impacts upon the desirability of India as an arbitration-friendly jurisdiction,” said Amazon.