SIAC Stay On Sale Of Future Group’s Assets Binding In India: Amazon Tells Delhi HC

Amazon dug in its heels in the Delhi high court arguing its case saying that the injunction awarded by a Singapore-based arbitration center staying the sale of Future Group’s assets to Reliance Retail is binding and enforceable in India. 

“They have breached a number of their contractual obligations,” senior lawyer Gopal Subramanium representing Amazon said in a hearing in the Delhi court. He was referring to a 2019 shareholders agreement between Amazon and Future Retail’s promoter company Future Coupons.

On Tuesday, during the first day of the hearing, lawyers for Future Retail argued that the SIAC order is not binding and enforceable in India.

Future Group’s lawyer Harish Salve urged the high court to restrain the US-based ecommerce major from writing to SEBI, CCI and other regulators about SIAC’s order, saying it amounts to interfering with the agreement with RIL. 

However, on Wednesday, Amazon’s lawyer Subramanium justified Amazon’s move to write to the CCI and SEBI and said the US giant is just trying to bring it to the notice of the regulatory authorities that there is an award in favour of the American retail giant. “I am going to the statutory authorities because there is an award in my favour. And FRL is bound by that unless they take steps to get that set-aside,” Subramanium argued. 

The standoff between Amazon and Future Group took a fresh turn when the US-based ecommerce giant wrote to SEBI asking the regulator to investigate Future Retail for insider trading.  

In a letter written on November 8, accessed exclusively by Reuters, Amazon argued that in 2019, it signed an agreement with Future Group which prevents the retail assets from being sold to certain parties including Reliance Industries.  

Earlier, Amazon had written to SEBI, BSE and National Stock Exchange (NSE), urging them to take into consideration the Singapore arbitrator’s interim judgment that has put the deal on hold.

On Tuesday, the Delhi high court had sought Amazon’s response on a plea by Future Retail Ltd (FRL) alleging that the ecommerce major was interfering in the deal.

Salve, appearing for FRL, told the court that his client was not challenging the award by the Emergency Arbitrator (EA), under the SIAC rules, as it was not recognised under Indian laws.

Future Group, which operates supermarkets and high-end food stores and has more than 1,500 outlets across India, has argued it entered into the deal to sell retail assets to Reliance because its business was severely hit by the pandemic and it was critical to protect all its stakeholders.

Earlier this month, Amazon had asked Future Group to pay INR 1,431 Cr plus interest which is the same amount that the etailer had in Future Coupons.

The court’s decision of the case will definitely have a bearing on the competition among the retail giants in India. 

Reliance Retail is seen as a direct competition to Amazon in the ecommerce sector with the launch of JioMart.