The Delhi High Court will tomorrow pronounce its interim order in Amazon’s plea seeking enforcement of the Emergency Award passed against the Future Group (Amazon.com NV Investment Holdings LLC v. Future Coupons Pvt Ltd & Ors).
As interim relief, Amazon has prayed for a direction to stop Kishore Biyani’s Future Group companies and officials from relying on approvals given by statutory authorities to the deal with Reliance.
Last month, a Single Judge Bench of Justice JR Midha had ordered maintenance of status quo in relation to the Future Retail-Reliance deal till the pronouncement of this order.
The status quo direction was subsequently stayed by a Division Bench of the High Court.
Amazon’s appeal against the stay order on status quo is presently pending before the Supreme Court.
While passing the status quo order, Justice Midha had also given prima facie finding that the Emergency Arbitrator rightly proceeded against Future Retail Ltd (FRL), that the Emergency Award was not a nullity, and that it was enforceable under Section 17(2) of the Arbitration Act.
He also prima facie opined that the Emergency Award was appealable under Section 37 Arbitration Act.
Before Justice Midha, Amazon had argued that Future Group, Kishore Biyani as well as other promoters and directors were “deliberately and maliciously” disobeying the Emergency Award despite their participation in the arbitration proceedings.
The Emergency Award had injuncted Future Retail and Future Coupons from taking any steps in furtherance to the Board Resolution of August 29, 2020 in relation to the transaction with Reliance.
Amazon asserted that Future Coupons Pvt Ltd, a shareholder in FRL and in which it holds 49% stake, could not have given its consent to the FRL-Reliance deal in the absence of its approval.
The e-commerce giant has maintained that had it not been for the assurance given by Future Group promoters and FCPL that the retail assets of FRL would be protected, there would have been no investment in FCPL by the American e-commerce company.
Amazon thus stated that it had “protective rights” in FRL and not “controlling rights” in FRL and the same were being breached by the sale of FRL assets to a restricted entity i.e. Reliance.
FRL, on the other hand, has argued that Emergency Award was a nullity.
Relying on the prima facie view given by the Single Judge in FRL suit against Amzaon, FRL contended that there was no arbitration agreement or privity of contract between Amazon and FRL.
It was also pointed out that the Single Judge had already prima facie opined that the Board Resolution approving the transaction with Reliance was valid.
FRL also argued that the Emergency Award was not enforceable under Section 17(2).