The Delhi High Court has ordered that the Amazon-Future Arbitration over the Reliance acquisition be postponed.
The Amazon-Future arbitration, which is taking place before a three-member arbitral tribunal over the latter's Rs 24,500-crore deal with Reliance, was stopped by the Delhi High Court on Wednesday.
It also stayed a single judge's January 4 judgement dismissing the Future Group's two appeals for a direction to the arbitration panel to decide on the company's request to terminate the arbitration proceedings before proceeding.
Amazon's challenges to Future Retail's agreement with Reliance are being heard by the tribunal.
'PERMANENT LOSS IF STAY IS DENIED'
A bench of Chief Justice D N Patel and Justice Jyoti Singh found that the appellants Future Retail Ltd and Future Coupons Pvt Ltd have a prima facie case, and that if a stay is not granted, they will suffer irreparable harm.
"There is a prima facie case in favour of appellants based on the order issued by the Competition Commission of India on December 17, 2021, by which the approval (for the deal with Future Group) granted on November 28, 2019, was kept in abeyance and showed there was a suppression of facts by the respondents (Amazon).
""If a stay is not granted, these appellants would suffer irreparable harm," the bench stated.
THE NEXT HEARING WILL BE ON FEBRUARY 1ST.
The court stated that much has been discussed by both sides, such as a final hearing on the appeals, and that all of these grounds, including the problem of maintainability, will be addressed on February 1.
"We hereby suspend further proceedings of the arbitral tribunal until the next day of hearing," the bench ruled, adding that "we also stay the single judge's January 4 order until the next date of hearing."
On the appeals filed by Future Retail Ltd and Future Coupons Pvt Ltd appealing the single judge's judgement, the high court also issued a notice to Amazon.com NV Investment Holdings LLC.
WHAT EXACTLY IS THE PROBLEM?
After the US e-commerce giant led the Future Group to arbitration at the Singapore International Arbitration Centre in October 2020, the two have been involved in a legal battle.
Future Retail Ltd breached their contract, according to Amazon, by agreeing to sell its assets on a slump sale basis to Mukesh Ambani's Reliance Retail for Rs 24,500 crore.
IN COURT, WHAT WAS SAID?
Future Retail Ltd and Future Coupons Pvt Ltd were represented by senior lawyers Mukul Rohatgi and Harish Salve, who argued that the arbitral procedures should be halted since they were illegal otherwise.
Amazon's senior advocate Gopal Subramanium said it was false to imply the tribunal was not aware of the termination application or that it was not being considered. He claimed that the panel had accommodated the attorneys representing Future Coupons Pvt Ltd and Future Retail Ltd, but that they could not tell the tribunal what to do.
In a January 4 order, the sole judge stated that it was not for the court to interfere with the arbitration procedures' scheduling and that no grounds for intervention were shown in the current petitions.
After cutting short the intended four-day hearing of expert witnesses, he said the tribunal had already set January 8 as the date for considering the termination application.
He had previously argued that the three-member arbitral tribunal was acting perversely by not deciding the issue of terminating the ongoing arbitration on a priority basis, given the anti-trust regulator's finding that Amazon's approval of its agreement with Future Coupons Pvt Ltd, which formed the basis of the arbitration, was facilitated by fraud.
The Competition Commission of India stopped its clearance of Amazon's over-two-year-old proposal to purchase 49-percent ownership in Future Coupons Pvt Ltd and Future Retail Ltd's promoter in December last year, as well as slapping a Rs 202 crore penalty on the e-commerce giant.