Starting a new chapter in the Amazon v. Future Group legal battle, the Supreme Court recently stayed proceedings before Delhi High Court.
The matter came before a bench comprising of Justices Rohinton Fali Nariman, B.R. Gavai and Hrishikesh Roy as a Special Leave Petition filed by Amazon.Com, NV Investment Holdings LLC.
The American e-commerce giant has a 49% stake in Future Group’s unlisted firms. The contract between the retailers had a clause that granted Amazon the option to buy the stakes of the listed flagship firm of Future Group, Future Retail Ltd. But the transaction never materialised and the Future group suffered major setbacks in its business during the Covid lockdowns last year. Indian Billionaire Mukesh Ambani led Reliance Retail came forward to acquire the ailing competitor back in October 2020.
Aggrieved by the proposed deal, Amazon invoked the arbitration clause in its contract with Future Group to approach a Singapore Arbitrator. The Arbitrator ordered an interim stay on the sale of assets. However, Future Retail and Reliance Retail believed that the arbitral award was not binding as the contract was between the unlisted firms in the Future Group and that the listed Future Retail is not a party to the agreement.
Armed with the interim stay order Amazon approached a Single-bench of Delhi High Court in January 2021 for its enforcement. Though the Single-bench approved the stay order its verdict was overturned by a Division-bench of the same High Court within days.
Amazon has challenged the order of the Division-bench in the Special Leave Petition before the Supreme Court.
The Supreme Court granted leave to appeal and ordered that:
“Having heard learned senior counsel appearing for all parties, further proceedings before the single Judge as well as the Division Bench of the High Court shall remain stayed.”
The Court allowed two weeks for the Respondents to file a counter-affidavit.
The case attains significance as Future Group contends that the deal with Reliance is the only way to save the company from bankruptcy while on the other hand, Amazon asserts that if the arbitration award is not enforced it will demonstrate an anti-investment stance of the Indian economy.
The matter is posted for further hearing on 4th May 2021.