The Delhi High Court on Friday issued notice to Future Coupons Private Limited (FCPL) and others over the petition filed by e-retail giant Amazon seeking the enforcement of the Emergency Award, restraining Future Group from going ahead with its deal with Reliance.
A single judge bench of the high court presided over by Justice J.R. Midha after holding a detailed hearing through video conferencing sought response from FCPL, Future Retail Limited (FRL), Kishore Biyani and other respondents and kept the matter for further argument on Monday.
During the course of the hearing, senior advocate Darius Khambata representing FRL argued before the bench that an order under section 17(2) of Arbitration Act can’t extend beyond Arbitral Tribunal. “As per the Singapore International Arbitration Centre (SIAC) Rules, the Emergency Arbitrator is not an Arbitral tribunal,” said Khambata.
He further stated that the note submitted by Amazon’s counsel senior advocate Gopal Subramanium does not mention that the single judge had said that the Emergency Award was under section 17. “In fact, she had said that it was under section 9,” he said while adding that the Future Group had to file a suit as Amazon was writing to Regulators on the basis of the Emergency Award.
Khambata reiterated that Single Judge held that Emergency Award had legal status but not under the terms of Section 17. “Even after the court asked them if there is some judgment to support their claim that the Emergency Award is an order of the Arbitral Tribunal but they didn’t show anything,” he argued. “The present petition has been filed for collateral purposes. It’s nothing more than a desperate attempt to get something,” he added.
As Khambata concluded his arguments, senior advocate Harish Salve while appearing for FRL told the court that the Single judge order clearly stated that since the matter is before a statutory authorities, it would be decided in accordance with law and not Emergency Arbitrator Award.”Pandemic hit FRL badly, when all shops were shut, the revenues flunked to zero. We can’t stop the banks from invoking the pledge. According to the agreement, unless FCPL permits, I will not sell,” Salve argued. “I already have permission from FCPL. But they believe that FRL needs Amazon’s permission. If I need this permission from an American company, that would mean that it has management rights over me,” he added.
Salve also argued that the company and jobs have to be saved. “Reliance said it will keep all the jobs and business. If this transaction cancels, the shops will close,” Salve said. Since the arguments were taking time and it was already 4:30 p.m. Salve urged the bench to hear further arguments on Monday. The bench agreed and the matter will now be taken up on February 1.
The court was hearing a petition filed by e-retail giant seeking the enforcement of the Emergency Award, restraining Future Group from going ahead with its deal with Reliance stating the order passed by the Emergency Arbitrator “shall be deemed to be an order of the Court for all purposes and shall be enforceable under the Code of Civil Procedure.”
The petition has been moved by Amazon.Com NV Investment Holdings LLC against Future Coupons Private Limited, Future Retail Limited, & Ors, to restrain it from alienating, disposing, transferring its assets. Amazon has also sought directions to detain Kishore Biyani, Ashni K Biyani, Rakesh Biyani and others, including directors of Future Coupons and Future Retail, in civil prison.
In its petition, under section 17(2) of the Arbitration and Conciliation Act, 1996, the Amazon, seeks direction to enforce the award passed by the Emergency Arbitrator under the Rules of the Singapore International Arbitration Centre (SIAC) against its partner Future’s Rs 24,713 crore deal with Reliance.
On the previous date of hearing, Subramanium urged the single judge to grant an injuction barring FRL and other respondents and to halt the deal with Reliance. He also requested the court for disposing Future’s retail assets. “The Emergency Arbitrator has already heard all the parties and interim orders have been passed,” Subramaniam said.
“According to the Singapore International Arbitration (SIAC) Rules, the Emergency Arbitrator can decide its jurisdiction,” he said. Subramanium then took the court through the directions passed during the emergency award. “None of the respondents have taken any action to reverse or modify the award,” Subramaniam said. He added that the respondents including FRL chose not file an appeal.