The Delhi High Court on Thursday allowed the application field by Amazon to enforce the emergency award against the Future-Reliance deal.
The High Court held that the emergency arbitrator is an arbitrator for all the intents and purposes under Section 17(1) of Arbitration and Conciliation Act and an order passed by such an emergency arbitrator is enforceable under sec. 17 (2) of the Act.
A Single judge bench comprising of Justice J.R. Midha pronounced the order, which comes a big win for Amazon.
The Court also held that the Respondent Future Group has raised a vague plea of nullity without substantiating the same. Moreover, the court went ahead to held that the petitioner's (Amazon.com) 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 to be deposited in PM fund of Covid 19 to be used in vaccination of senior citizens belonging to the below poverty line group. The Court ordered the same to be deposited within 2 weeks and the same shall be put on record within 1 week thereafter.
"The respondents have raised a vague plea of Nullity without substantiating the same. The interim order of the Emergency Arbitrator is not a Nullity as alleged by respondent No.2. Combining/treating all the agreements as a single integrated transaction does not amount to control of the petitioner over FRL and therefore, the petitioner‟s investment does not violate any law." The Court held.
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 went ahead to hold 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.
"In exercise of power under Order XXXIX Rule 2A(1) of the Code of Civil Procedure, the assets of respondents No.1 to 13 are hereby attached. Respondents No.1 to 13 are directed to file an affidavit of their assets as on today in Form 16A, Appendix E under Order XXI Rule 41(2) of the Code of Civil Procedure within 30 days. Respondent No.1, 2, 12 and 13 are directed to file an additional affidavit in the format of Annexure B-1 and respondents No.3 to 11 are directed to file an additional affidavit in the format of Annexure A-1 to the judgment of M/s Bhandari Engineers & Builders Pvt. Ltd. v. M/s Maharia Raj Joint Venture along with the documents mentioned therein within 30 days." The Court held.
The Court 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 respondents are directed not to take any further action in violation of the interim order dated 25th October, 2020. The respondents are further directed to approach all the competent authorities for recall of the orders passed on their applications in violation of the interim order dated 25th October, 2020 within two weeks. The respondents are directed to file an affidavit to place on record the actions taken by them after 25th October, 2020 and the present status of all those actions at least three days before the next date of hearing. Respondents No.3 to 11 shall remain present before this Court on the next date of hearing." The Court directed the respondents.
The matter will now be heard on 28th April 2021 for the purpose of compliance.
Hearing a plea by Amazon Inc against Future Retail Ltd (FRL) and Reliance Industries' retail stake sale deal worth Rs. 25,000 cr approved by a Board Resolution of FRL last year, the Delhi High Court had earlier granted interim relief to Amazon directing all authorities and parties to maintain status quo on the deal until a detailed interim order on the case. The status quo order was later stayed by a division bench of the High Court.
The bench of Justice Midha had also given a strong prima facie view in Amazon's favour that as opposed to FRL's plea that the Award was a nullity, the Emergency Award is infact enforceable under Section 17 (2) of the Arbitration and Conciliation Act, and therefore directed FRL to bring on record all steps and actions taken by it towards the deal, after the award of the Emergency Arbitrator was passed on the arbitration on Oct 25, 2020.
The Delhi High Court had earlier issued notice on Amazon's plea seeking interim injunction against Future Retail Ltd (FRL) and Reliance Industries Ltd's deal worth nearly Rs. 25000 crores, and sought clarity on the factual position of all parties involved. The bench of Justice Midha had also directed the parties to submit a note on their factual positions and legal propositions.
Amazon was represented by:
Gopal Subramanium, Gourab Banerji, Amit Sibal, Rajiv Nayyar and Nakul Dewan, Sr. Advs, and Pawan Bhushan, Hima Lawrence and Ujwala Uppaluri from Mr Subramanium's Chamber.
FRL was represented by Mr Harish Salve and Darius Khambata, Sr. Advs
The promoters of FRL were represented by Vikram Nankani, Sr. Adv.
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