The Supreme Court on Friday ruled in favour of e-commerce giant Amazon against the proposed ₹24,713-crore merger deal between Future Retail Limited and Reliance Retail.
A Bench of Justices Rohinton F. Nariman and B.R. Gavai upheld the validity and enforceability of a Singapore-based Emergency Arbitrator (EA) award, which restrained Future Retail Limited from going ahead with its deal with Reliance Retail, under the Indian laws.
With this, the court has made it clear that the EA’s decision could be accepted and enforced as an interim award by an arbitral tribunal under Section 17 of the Arbitration and Conciliation Act.AdvertisingnullAdvertising
Senior advocate Harish Salve, for Future Retail, had said the EA award did not have any place in the Indian statute books. The senior lawyer had argued that the award of the Singapore EA cannot be enforced under Section 17 of the Arbitration Act.
Arbitral awards are enforced under the Civil Procedure Code and not under the arbitration law, he submitted. Amazon has, in turn, argued that the Future Group is bound by the EA award.
Further, the court upheld a Single Judge Bench order of the Delhi High Court to Future Group to maintain ‘status quo’ on the sale of its retail assets to Reliance Industries.
“The Emergency Arbitrator’s award under Section 17(1) and the Single Judge order is upheld,” Justice Nariman, who authored the judgment, pronounced in court on Friday.
Supreme Court ruled in favour of Amazon, holding the firm could seek interim relief from Singapore arbitral tribunal that restrained Future Retail from going ahead with its $3.4 billion sale to Reliance.
Amazon approached the Supreme Court after a Division Bench of the High Court, on February 8, revoked the Single Judge’s order. The Division Bench’s decision was based on an appeal filed by Future Retail Limited.
“It is evident that the Single Judge order to maintain status quo was directed for the limited purpose of protecting the substratum of the dispute till a detailed order was issued… However, the High Court, instead of waiting for a detailed order, has issued the interim order [February 8] staying the operation, implementation and execution of the Single Judge order without giving any reasons,” Amazon had contended in its petition before the top court.
Amazon had urged the top court to protect its interests and rights as the “balance of convenience” was in its favour.
“Respondents [Future Group] have unequivocally stated that they will continue to take steps to complete the transaction. The greater the progress made towards the completion of the transaction, the harder it will be to unravel it,” Amazon had pleaded in the top court.
Read Judgement here