Amazon dispute: HC rejects Future plea to quash arbitration
In a major setback for Future group companies, the Delhi High Court on Tuesday dismissed their plea seeking to quash the ongoing arbitration proceedings in Singapore with Amazon relating to the Rs 24,500-crore merger deal with Reliance Retail.
With this order, the arbitration proceedings initiated by Amazon against Future Retail over the merger deal will proceed as per schedule on January 5.
Dismissing the plea filed by Future Retail and Future Coupons (FCPL), the court said mere fixation of tight timelines or denial of requests for adjournment or deciding the order in which the pleas filed by the parties will be taken up cannot be reason enough to contend that the orders of the tribunal are perverse or lacking in inherent jurisdiction.
In his order Justice Amit Bansal said “no grounds are made out for interference in the present petitions” and the arbitrators have far greater flexibility in adopting procedure to conduct the arbitration proceedings as compared to a civil court.
Stating that it’s not for the court to interfere with the scheduling of the arbitration proceedings as sought by Future, the HC said the arbitral tribunal has the sole discretion to decide whether the termination applications should be heard before or after the hearings of the expert witnesses. It also noted that the tribunal had been accommodating towards all parties as it had cut short the scheduled four days’ hearing of the expert witnesses to three days and the fourth day, that is, January 8 has been fixed for hearing the termination applications filed by FRL.
Future Retail and FCPL had moved the Delhi HC after the December 17 order of the Competition Commission of India, which suspended its clearance given to Amazon’s 2019 deal with Future.
Based on the CCI’s order of suspension, FRL had first filed an application for termination of the arbitration proceedings before the Singapore International Arbitration Centre (SIAC). However, the tribunal had on December 30 refused to consider the request before starting the final hearing on January 5. This had prompted FRL to move the Delhi HC.
The Future companies had argued that the 2019 deal by which the e-commerce firm acquired a 49% stake in Future Coupons, and which formed the basis for it to assert its rights over Future Retail, had been kept in abeyance by the antitrust regulator, and hence, Amazon could no longer object to its merger deal with Reliance Retail. Future Retail said “the continuation of the entire arbitration proceedings is a perpetuation of illegality in allowing Amazon to assert rights contrary to Indian law”.
The judge said there is nothing to suggest that the arbitral tribunal has denied equal opportunity to the parties or has not been accommodating towards requests of the Future Group. “Therefore, no exceptional circumstances or perversity have been demonstrated/made out in the petitions or during the hearing to warrant the exercise of jurisdiction by this court…” the HC said in its 21-page order.
Observing that the arbitral tribunal is the sole master of the procedures under the Arbitration and Conciliation Act, the HC said that there is no infirmity in the decision of the tribunal in not postponing the hearings of the expert witnesses scheduled in January. “…acceding to such a request for adjournment, is bound to derail the arbitration proceedings as it would be very inconvenient and cumbersome to schedule fresh dates for the arbitration proceedings, taking into account the availability of all arbitrators as well as the experts,” the judge said.
Lawyers of the Future group having tested positive for Covid-19 cannot be a ground for postponement of hearings, the dates of which were fixed a long time ago, the judge said, adding that the pandemic being an unfortunate reality, the business community at large as well as professionals, including lawyers/law firms, would have to learn to live with this and continue with their regular professional and business activities.
However, the HC said that Future Group is free to challenge the violation of any provisions of the statute as well as the arbitration being conducted in violation of the agreement under Section 34 of the Arbitration Act.
The two sides have been embroiled in a legal battle for more than a year now over Future Retail’s move to sell its retail assets to Reliance Retail for Rs 24,500 crore.
Meanwhile, FRL recently missed the due date for payment of Rs 3,494.56 crore to banks and lenders as it could not sell assets due to its ongoing litigation with Amazon, impacting its monetisation plans. The company had last year entered into a one-time restructuring (OTR) scheme for Covid-19 hit companies with a consortium of banks and lenders and was to discharge “an aggregate amount of Rs 3,494.56 crore” on or before December 31, 2021.
Check the source here –Source, Financial Express.