Future Retail's Appeal Against Emergency Award Not Maintainable, Amazon Argues In Supreme Court

"Award delivered by the Emergency Arbitrator is valid, and Future Retail Ltd.'s interference is uncalled for", submitted Senior Advocate Gopal Subramanian, appearing for Amazon.com NV Investment Holdings LLC, to the Supreme Court in the appeal filed by Amazon pertaining to the Reliance-Future deal.

A Bench headed by Justice Rohinton F. Nariman was hearing Amazon's challenge to an order dated March 22 passed by a Division Bench of the Delhi High Court staying a Single-Judge order which had upheld the Emergency Award passed by a Singapore Tribunal halting the Reliance-Future deal worth Rs. 24,713 crores.

Subramanian informed the Supreme Court that the Singapore Arbitration Tribunal Rules allowed for the appointment of an Emergency Arbitrator, and for this purpose, Mr. VK Rajah, the former Attorney-General of Singapore was appointed. This had been objected to by Future on the grounds that the Arbitration and Conciliation Act, 1996, did not account for an Emergency Arbitrator, and that there were jurisdictional issues.

"The Emergency Arbitrator passed an injunction order, but they kept saying that it was a nullity and that it was not binding on FRL. That Order was entitled the status of the Order of a Court. Then they filed a suit in the Delhi High Court, which was dismissed by the Single-Judge who held that concept of Emergency Arbitrator was not foreign to India", argued Subramanian.

Noting that the Single-Judge's order was stayed by the Division Bench, Subramanian submitted to the Top Court that there was no provision in the 1996 Act which prohibited the appointment of an Emergency Arbitrator (EA) and that all international chambers of commerce had provisions for the same. Further, an Order of the EA constituted as an interim measure and could be enforced under Section 17 of the Act.

"Single-Judge had said that all actions of FRL were brazenly contravening Orders passed by EA. If you adopt the SIAT Rules and that provides a certain framework, no party can claim to have the authority to self-style the same as nullity and disobey the Order", submitted Subramanian.

He further raised the issue of the maintainability of the appeal filed by FRL before the Division Bench of the High Court. He stated, "Section 37 provides for an appeal against an Order under Section 17(2) of the 1996 Act. This is an incompetent appeal."

The hearing will continue on July 22.

WHAT HAS HAPPENED TILL NOW?

Amazon has moved the Supreme Court challenging an order dated March 22 passed by a Division Bench of the Delhi High Court staying a single-judge order which had directed upheld the Emergency Award passed by a Singapore Tribunal halting the Reliance-Future deal.

On April 19, the Supreme Court said that it will stay the proceedings in the High Court and will hear the matter.

A Single-Judge Bench of Justice Midha of the Delhi High Court had earlier allowed the Application field by Amazon to enforce the emergency award against the Future-Reliance deal.

The Judge had 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 Section 17 (2) of the Act.

It was also held that the Respondent Future Group has raised a vague plea of nullity without substantiating the same. Moreover, the Court went ahead to state 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 Cares Fund of COVID-19 to be used for 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.

On March 22, a Division Bench comprising Chief Justice DN Patel and Justice Jasmeet Singh stayed the single bench order on appeal by Future Group.

Amazon had earlier moved the Supreme Court against an interim order of the Delhi High Court Division Bench which had stayed the status quo ordered by the single bench in December last year on Future-Reliance deal.

In that case, a Bench headed by Justice RF Nariman of Supreme Court had barred the NCLT from sanctioning scheme of merger of Reliance-Future companies, while allowing the continuation of the proceedings before the Tribunal.