The Supreme Court on Thursday reserved its judgment on a petition filed by e-commerce giant Amazon against the proposed ₹24,713-crore merger deal between Future Retail Limited and Reliance Retail.
One of the questions highlighted in the case is regarding 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.
A Bench of Justices Rohinton F. Nariman and B.R. Gavai reserved the case after marathon virtual court hearings over nearly a week.
The court has made it clear that it would decide on whether 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.
Senior advocate Harish Salve, for Future Retail, said the EA award did not have any place in the Indian statute books. He said the award of the Singapore EA could not be enforced under Section 17 of the Arbitration Act. Arbitral awards were enforced under the Civil Procedure Code and not under the arbitration law, he submitted. Amazon, in turn, argued that the Future Group was bound by the EA award.
On February 22, the top court allowed the National Company Law Tribunal (NCLT) proceedings in connection with the proposed deal to go on even as it directed the tribunal to refrain from passing any “final order of sanction of the scheme”. The same day also saw the court issue formal notice on Amazon’s petition seeking a stay of a February 8 Delhi High Court order, which revoked an earlier Single Judge Bench direction to Future Group to maintain ‘status quo’ on the sale of its retail assets to Reliance Industries.
Amazon, represented by senior advocate Gopal Subramanium, had said the February 8 order was “ex-facie arbitrary and illegal”. It was passed by a Division Bench of the High Court 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.
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 has pleaded in the top court.
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