HC rejects FRL plea to stay arbitration order, seeks Amazon's response

The Delhi High Court Friday declined Future Group's plea for stay on an arbitration tribunal order refusing to interfere with the Emergency Award (EA) which restrained it from going ahead with the Rs 24,731 crore merger deal with Reliance Retail.

Justice Suresh Kumar Kait sought response from US-based e-commerce giant Amazon which had challenged the merger before the Singapore arbitration tribunal under SIAC, and listed the appeals by Future Coupons Pvt Ltd (FCPL) and Future Retail Ltd (FRL) for further hearing on January 4.

Senior counsel Harish Salve, appearing for FRL, urged the court to pass an interim order clarifying that an earlier order passed by the Supreme Court which stayed all proceedings in relation to the enforcement of the EA would remain in force despite the subsequent order passed by the duly constituted arbitration tribunal.

I want the court to clarify which order will prevail. That (Supreme Court order) was a consent order. This order is in place today. After this, the tribunal order was passed. What is the interim order that I'm seeking? That the Supreme Court order will continue to operate... I don't want to be told that the tribunal order is in force, he submitted.

Senior counsel Parag P Tripathi, representing FCPL, also urged the high court to reiterate the order of the Supreme Court.

Kishore Biyani and 15 others including FRL and FCPL have been embroiled in a series of litigations with Amazon, an investor in FCPL, over the deal with Reliance. Following the EA, subsequently, a three-member arbitral tribunal was constituted to decide the issues arising from the deal.

During the hearing, the court observed that in view of the pendency of related appeals before the apex court, it would need a clearance to proceed with the fresh appeals.

How can you expect interim order to be passed by this court? Supreme Court order says proceedings stayed... Let us get clearance from Supreme Court that this is the position now (that) this subsequent order was passed, the judge said.

The court further observed that the order passed by another judge of the high court earlier this year, which had upheld the EA, was yet to be set aside and only enforcement proceedings had been stayed.

In both the appeals, issue notice... Application for ad-interim relief is dismissed, the judge ordered.

Senior advocates Gopal Subramanium and Rajiv Nayar appeared for Amazon and said that the Future group was bound by the EA.

In its plea, FRL has challenged the order of the arbitration tribunal on the ground that it is deeply flawed and is liable to set aside on fact and in law as there is no arbitration agreement between FRL and Amazon.

Senior lawyer for FRL stated that the deal with REL was time-sensitive and not only the company but thousands of employees would suffer if it does not go through.

On September 9, the apex court had stayed for four weeks all proceedings before the high court in relation to the implementation of the EA and also directed statutory authorities like National Company Law Tribunal (NCLT), Competition Commission of India (CCI) and Securities and Exchange Board of India (Sebi) not to pass any final order related to the merger deal in the meantime.

Subsequently, the arbitration tribunal under the Singapore International Arbitration Centre (SIAC), on October 21, rejected the plea of FRL to lift the interim stay granted by its EA on October 25 last year, observing that "the Award were correctly granted".

Amazon had dragged Future Group to arbitration at Singapore International Arbitration Centre (SIAC) in October last year, arguing that FRL had violated their contract by entering into the deal with rival Reliance.

The FRL and FCPL had moved the top court against the high court order of August 17 which said that it would implement the earlier order by its single-judge restraining FRL from going ahead with the deal in pursuance of the EA's award.

The high court had said that in the absence of a stay, it would have to enforce the order passed by its single judge, Justice J R Midha, on March 18.

On March 18, besides restraining FRL from going ahead with its deal with Reliance Retail, the court had imposed costs of Rs 20 lakh on the Future Group and others associated with it and ordered attachment of their properties.

On August 6, the Supreme Court gave the verdict in favour of Amazon and held that EA award, restraining the Rs 24,731 crore FRL-Reliance Retail merger deal, is valid and enforceable under Indian arbitration laws.

The apex court had also set aside the two orders of February 8 and March 22 of the division bench of the Delhi High Court order which had lifted the single-judge's orders staying the FRL-RRL merger.

A bench headed by Justice R F Nariman, since retired, had dealt with the larger question and held that an award of an EA of a foreign country is enforceable under the Indian Arbitration and Conciliation Act.