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Delhi High Court seeks response from Future Retail, Reliance Retail on Amazon’s Appeal

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Umamageswar Maruthappan

The Delhi High Court issued a notice to the Future Retail and Reliance Retail Industries, on 13th January 2021, on Amazon’s appeal against the Single-Judge order.

The Bench comprised Chief Justice D N Patel and Justice Jyoti Singh.

Amazon filed an appeal challenging the order of a Single-judge bench comprising Justice Mukta Gupta and the same was accepted by the Delhi High Court.

The appeal was listed for hearing on 13th January 2021 and post hearing, the Court asked the FRL and Reliance Retail to submit their responses on the contentions of Amazon.

The Future Retail and Amazon are in a fall out following the former’s resolution to have dealings with Reliance Retail.

The two adversaries had an agreement in 2019 which prohibits the Future Group from selling its retail assets to anyone stated on a “restricted persons” list which included Reliance.

The Future Group, however, had a setback in business and the COVID-19 lockdown seemed to have worsened the same.

Ostensibly, FRL had discussed and informed about its position to Amazon and the negotiable talks between them did not end up successfully.

After due considerations, the Future Group decided to engage in dealings with the Ambani led Reliance Retail.

The Amazon Group took the matter to Singapore International Arbitration Centre (SIAC) and the same had passed an interim order against the FRL.

The American e-commerce Giant also wrote to the Securities and Exchange Board of India (SEBI), the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) to restrain the dealing between FRL and Reliance Retail.

Following this, the FRL filed a case in the Delhi High Court alleging that the order of SIAC is of no importance as they are not recognised by the Indian Law.

However, crushing the same, the Single-judge Bench comprising Justice Gupta held the order of SIAC to be legal.

It stated that “the parties are allowed to choose a different procedural law and the only thing to be considered is whether the said law is repugnant or conflicting to the concerned Indian law or not”.

The Court, on 21st December 2020, validated the Emergency Award of the Singapore International Arbitration Centre (SIAC), thereby, empowering Amazon to interfere in the dealings between the Future Retail (FRL) and the Reliance Retail by writing to the statutory authorities.

However, it also held that the Board Resolution dated 29th August 2020 of the FRL regarding its transaction with Reliance Retail was valid.

The Court further had left it to the regulating authorities to examine the impugned dealing.

The Court also held that the Future Retail was subject to control by Amazon is violative of the FEMA Rules.

Since, the Court had validated the applicability of the SIAC rules, the arguments but forth by Amazon become stronger so far that they have appealed against the observations of Justice Mukta Gupta alleging that the order validating the transaction would give way FRL “to bypass the Emergency Award (EA) order made by SIAC” to which the parties are binding because they have willfully adopted its rules.

The matter has been listed for further reading on 12th February 2021.