Setback for Future as Delhi HC rejects pleas to quash Amazon arbitration

Dismisses its plea seeking a direction to SIAC to decide on its application

The Delhi High Court on Tuesday dismissed Future Group’s petitions seeking a direction to the Singapore International Arbitration Centre (SIAC) -- adjudicating Amazon's objections against Future's deal with Reliance -- to decide on its application for terminating the arbitration proceedings.

“The arbitral tribunal is not bound by the procedure of the Code of Civil Procedure, 1908, or the Indian Evidence Act, 1872. This flexibility would also vest the discretion in the arbitral tribunal to decide the manner in which the proceedings are to be conducted, including the order in which the applications filed by the parties are to be considered,” the high court stated in its order.

“For this court to interfere in the aforesaid issues would be violative of the autonomy vested in the arbitral tribunal,” it added.

According to legal sources, in dismissing Future’s petitions so promptly, the high court has given paramount importance to the arbitration process and      faster remedy. It also indicates that Amazon's case for seeking remedy for the default of contractual obligations is genuine, they said.

The cash-strapped Future Group is likely to approach a higher forum to seek remedy, sources said.  

An email sent to Amazon did not elicit any response.  

Ashish Kumar Singh, managing partner at Capstone Legal, told Business Standard that the high court had clearly stated that procedural matters related to the working of an arbitral tribunal were not amenable to the jurisdiction of the court under Article 227 of the Constitution of India. “The window to interfere with an arbitration proceeding is very limited and the court cannot dictate the proceedings to an independently constituted tribunal,” Singh said.

In December 2021, the Competition Commission of India (CCI) suspended Amazon’s 2019 deal with Future Coupons for its alleged deliberate design to suppress information about the scope and purpose of the deal.

In its order, the competition watchdog said it considered necessary to examine the combination afresh, given that the two players were known in the online marketplace and offline retailing and had contemplated strategic alignment between their businesses. The antitrust regulator also imposed a penalty of Rs 200 crore on Amazon to be paid within 60 days of receipt of the order.

Amazon approached the SIAC in October 2020 after Future Group’s deal with Reliance Retail as it cited a non-compete agreement with the Kishore Biyani-led chain. The deal specified any disputes would be arbitrated under the SIAC rules. The same month, Amazon got a favourable ruling for its plea in the SIAC against the deal.

In November 2020, Future Group moved the Delhi High Court against Amazon, alleging interference by the US firm in the deal. Since then, Amazon has been fighting a legal battle with FRL to stop Future's $3.4-billion deal with Reliance.

In August 2021, the Supreme Court (SC) had ruled in favour of Amazon, upholding the Singapore emergency arbitrator award against the Future-Reliance deal as enforceable in India. But in a major relief to Future Group, the SC stayed proceedings before the Delhi HC in September, ordering no coercive action. The court also directed the National Company Law Tribunal, CCI, and the Securities and Exchange Board of India to not pass any final order in relation to the dispute for four weeks.