The Singapore International Arbitration Centre (SIAC) has reportedly turned down Future Retail’s plea that it be excluded from being a party to the Amazon-Future Coupons arbitration proceedings. SIAC has ordered that the arbitration process shall continue.
In October, SIAC had ordered a stay on the sale of Kishore Biyani-owned Future Group’s retail, wholesale, logistics and warehousing businesses to Reliance Retail, in a deal reported to be worth INR 24,713 Cr.
SIAC’s decision had come in response to arbitration proceedings initiated by Amazon, which has a 49% stake in Future Coupons, the promoter-entity of Future Retail.
Future Retail Limited (FRL) had approached SIAC with the plea that the arbitration proceedings were part of a contract between Amazon and Future Coupons, to which FRL is not a party. The company had pleaded that it be excluded from being a party on account of jurisdiction objection.
However, according to TOI, which first reported the development, SIAC has decided that the arbitration proceedings will proceed and a tribunal will be constituted in the matter.
Last week, Inc42 reported that the Delhi High Court had reserved its order on Future Retail’s suit related to its deal with Reliance Retail.
During the court proceedings, senior advocate Harish Salve, appearing for Future Retail, had kept up the practice of comparing US-based retail giant Amazon to the East India Company.
Salve’s arguments to the court seemed to be focused on the fact that Amazon has a 49% stake in Future Coupons, the promoter-entity of Future Retail. And while Amazon also has a 3.58% stake in Future Retail, it is not a controlling stake.
“Amazon has an agreement with FCPL (Future Coupons Private Limited). Then he says controllers are common. The obligation of the promoter to Amazon cannot be attributed to the company. I am not bound by the commitment made by the promoter to the third party,” Salve had said in court on Friday.
“So Biyani must jump when we ask him to but we have no control.. that is what was argued. This native has to act as per the East India Company,” he quipped while referring to Future Group founder and CEO Kishore Biyani and equating Amazon to the East India Company.
What Happened Before The Case Came To Delhi HC?
In October, Amazon had served a legal notice to Kishore Biyani-owned Future Group, over the latter’s alleged breach of a non-compete contract with the sale of its retail, wholesale, logistics and warehousing businesses to Reliance Retail in August this year.
Amazon, which had last year bought a 49% stake in FCPL, the promoter-entity of Future Retail, has contended that according to its contract with Future, the sale of the business to certain companies, including Reliance is barred.
In August, Reliance Retail had entered into a deal to acquire the retail, wholesale, logistics, and warehousing businesses of the Future Group for around INR 24K Cr. According to the deal, Biyani’s Future Enterprises Ltd (FEL) would have retained the manufacturing and distribution of FMCG goods, integrated fashion sourcing and manufacturing businesses, its insurance joint venture with Generali, and a joint venture with NTC Mills.