Earlier this week, SIAC (Singapore International Arbitration Centre) had rejected the Future Group’s contention that Future Retail, which is to engage in a proposed divestment deal with the Reliance Group’s retailing arm, be excluded from the arbitration.
The matter has been triggered after Amazon objected to the divestment deal. The SIAC dismissed the jurisdictional objections raised by the Future Group on a prima facie basis. The SIAC decided to proceed accordingly. A tribunal will be constituted in this matter for both Future Retail and Future Coupons, in which Amazon has a 49 percent stake.
In October 2020, a single-judge bench of V K Rajah had granted an interim arbitration award, barring Future Retail Ltd (FRL) from taking any step to dispose of or encumber its assets or issuing any securities to secure any funding from a restricted party. In August 2019, Amazon bought a 49 percent stake in one of Kishore Biyani-led Future Group's unlisted firms “Future Coupons Ltd (FCL)” with the right to buy into the listed flagship FRL after a few years, if the government were to undo its bar on foreign ownership of multi-brand retailers. Due to the Nationwide lockdown imposed to curb the COVID-19 outbreak, FRL soon ran into a severe cash crunch. Therefore, FRL decided to sell assets for Rs 24,713 crore to Reliance Industries Ltd (RIL). Then, Amazon dragged FRL to arbitration at SIAC claiming that its contract with the unlisted FCL barred a transaction with a number of persons and companies, including Reliance. Amazon has also written to markets regulator SEBI and Stock Exchanges, urging them to take into consideration the Singapore arbitrator's interim judgment that has put on hold the Rs 24,713-crore deal between Future group and RIL while reviewing the proposed transaction. Last week, the Competition Commission of India has also approved the Rs 24,713- crore divestment deal between Future Retail and Reliance. FRL has dragged the e-commerce giant to Delhi High Court for disrupting its transaction with Reliance Group. FRL seeks "reliefs" against Amazon from "interfering" with its RIL deal and alleged that the e-commerce giant was "misusing" an interim order passed by a Singapore arbitrator. Last week, the Delhi High Court reserved its order on the application.
“In international arbitration, submissions and pleadings that contesting parties make are most time-consuming. However, once the arbitration starts, the endeavor is to complete in a time-bound schedule,” said Nishit Dhruva, managing partner of law firm MDP & Partners. “Once the final award comes, the parties can come to India for its enforcement.”
In the latest development to the arbitration proceedings, Amazon has suggested Brussels-based Albert Jan van den Berg, a founding partner of law firm Hanotiau & van den Berg, while the Future Group has nominated Swedish arbitration veteran and founding partner of Three Crowns LLP, Jan Paulsson for the matter.