Delhi High Court Reserves Order On Plea By Future Group Challenging Orders Of Singapore Tribunal Refusing To Terminate Arbitration Proceedings

The Delhi High Court will tomorrow pronounce orders on the plea filed by Future Group challenging the two orders passed by Singapore Arbitration Tribunal deferring hearing in it's plea seeking termination of arbitration proceedings after final hearing from January 5 to 8, 2022.

While reserving orders on the petition, Justice Amit Bansal said that the orders will be pronounced tomorrow at 4:30 PM.

In the plea filed by the Future Group, reliance has been placed on an order passed by the Competition Commission of India dated December 17, 2021 which had kept in abeyance the approval granted for Amazon's deal with Future Group.

On receipt of the CCI order, an application was moved before the Singapore Tribunal seeking closure of the arbitrations stating that any assertion of any contractual rights against Future Group by Amazon would be in direct contravention of the CCI order.

It is thus the case of Future Group that the schedule set down for hearing of the cross examination of the expert witnesses by the Arbitration Tribunal from 5 to 8 January, 2022, is a complete travesty.

It has also been averred that the Arbitration Tribunal was informed by the Future Group that in the meanwhile 6 members of it's legal team of 12 lawyers attending the case were Covid positive and that it was impossible for them to cope with the directions, filing submissions and to instruct the concerned counsel on cross examination of the witnesses.

"For the reasons stated in this petition, if no immediate and urgent reliefs are granted to the Petitioners, the Petitioners will be forced to participate in arbitration proceedings without having been afforded a fair and reasonable opportunity to prepare and present its case," the plea reads.

According to Future Group, the impugned orders passed by the the Tribunal were illegal and without jurisdiction as being contrary to sec. 18 of the Arbitration and Conciliation Act therefore seeking quashing of the same.

"….the Arbitral Tribunal has failed to appreciate that it was required under Indian law to first hear such application before proceeding with the second tranche final hearing. It was incumbent on the arbitral tribunal to decide the application before proceeding with second tranche hearing," the plea adds.

During the course of hearing today, Senior Advocate Mukul Rohatgi appearing for Future Retail Ltd. submitted before the Court that there has been a complete inappropriate procedure and defiance of the CCI order.

"…if it has been held to be fraudulent, illegal etc and kept in abeyance, the agreements have no valid force today. If they have no valid force, the arbitration can't go on," he added.

Additionally, Senior Advocate Harish Salve appeared for Future Coupon Pvt. Ltd. in the matter.

On the other hand, Senior Advocate Gopal Subramaniam appearing for Amazon submitted that it would be unfair to submit that the Arbitration Tribunal was not willing to hear the termination application.

"To suggest in an application for judicial review that the tribunal is conducting in some unfair manner is less than fair. We have to take our chances before a duly constituted tribunal," he added. 

The Amazon-Future deal has given rise to several rounds of litigation in India. Amazon invoked arbitration proceedings in Singapore to halt Future Retail's deal with the Reliance group. An emergency award was passed by the Singapore Arbitrator to halt the Future-Reliance deal. This was challenged by FRL in the Delhi High Court. Ultimately, the matter reached the Supreme Court, which approved the emergency award passed by the Singapore Arbitrator.

Background

Justice JR Midha vide order dated March 18 held that Future Group had raised a vague plea of nullity and went ahead to held that the Amazon's investment does not violate any law. In view of this, the Court rejected the contentions of the Future Retail Group with a cost of Rs. 20 lakhs.

The Court went ahead to hold that the respondents have deliberately and willfully violated the interim order dated 25th October, 2020 and are liable for the consequences enumerated in Order XXXIX Rule 2A of the Code of Civil Procedure.

The Court also held that the property of Respondents no. 1 to 13(Future group companies and its promoters including Kishore Biyani) be attached. Moreover the respondents are directed by the Court to file additional affidavits indicating the details of their assets and property.

It was also held that the Emergency Arbitrator had rightly invoked the 'Group of Company' doctrine in relation to the Future Group companies.

In view of this, the Court also issued show cause notice to Respondents as to why they shouldn't be detained in civil prison for violation of the order dated 25th October, 2020.

The Supreme Court later ruled in favour of Amazon in its dispute with Future Retail Limited(FRL) over the latter's merger deal with Reliance group. The Top court held that Emergency Award passed by Singapore arbitrator stalling FRL-Reliance deal was enforceable in Indian law and had also held that single judge's order was not appealable to the division bench of the High Court under Section 37(2) of the Arbitration Act.

Title: FUTURE RETAIL LTD. Vs. AMAZON.COM NV INVESTMENT HOLDINGS LLC & ORS.