The Supreme Court made it clear on Thursday it will not allow stalling of the arbitral proceedings pending before the Singapore International Arbitration Centre (SIAC) pertaining to the ongoing legal tussle between US e-commerce major Amazon and the Future Group, saying the sanctity of such proceedings needed to be maintained.
“You (Future group and others) cannot keep stultifying the proceeding before the arbitral tribunal and this is just a ploy to delay the proceeding. These are all ploys by well-heeled parties to delay the arbitration proceeding. Your client is trying to be too clever by half,” a bench comprising Chief Justice D Y Chandrachud and Justices Hima Kohli and J B Pardiwala said.
Justice Chandrachud said he was “concerned” as the CJI due to the claim made that there was “rule of law” prevailing in the country. “You can in any case challenge the final award to be passed in the arbitral proceedings,” the bench said, making clear “we will make sure that the arbitral proceedings go on.” The Delhi High Court had recently reserved its verdict on a batch of pleas on the ongoing legal tussle between Amazon and the Future Group over Future Retail Ltd's (FRL) Rs 24,731 crore merger deal with Reliance Retail. The top court was hearing the submissions of senior advocate Gopal Subramanium, appearing for the US e-commerce major, seeking urgent hearing of the plea filed against the Delhi High Court order of November 3.
The Delhi High Court had then extended by 10 days the time which was originally granted by the Arbitral Tribunal to Future Coupons Private Ltd (FCPL) for filing its response to the amended arbitration petition of Amazon.
“The petitioner (FCPL) would, therefore, file a response to the amended SOC, on maintainability as well as on merits on or before 17th November 2022 without prejudice to the rights and contentions of both parties and subject to outcome of these proceedings,” the high court said.
Subramanium said this order has been challenged as Amazon does not want the arbitral proceedings to be stalled.
The senior lawyer said it was agreed between the parties that they would take part in the arbitral proceedings before the SIAC. The court was told the tribunal had dismissed an application for termination of the arbitration preferred by the FCPL and decided to continue with the proceedings. The FCPL then moved the Delhi High Court challenging the decision of the arbitral tribunal.
The high court has reserved its verdict on the fresh plea of FCPL and the US firm apprehended that it may delay the arbitration proceedings which are in the final stage, the lawyer for Amazon said.
"We will not let the arbitration process be stultified. We will list the matter for next Friday and order accordingly," the top court said and listed the plea of Amazon for hearing.
The high court has reserved its order after hearing both the parties, senior advocate K V Vishwanathan, appearing for FCPL, said, adding high courts are empowered to take up such challenges under writ jurisdictions.
"If the high court holds it is not maintainable, arbitration cannot go on, but if you fail before high court you have to go before the tribunal," the top court said, adding the order of the Supreme Court on arbitration cannot be rendered “a nullity”.
FCPL has filed the petition before the Delhi High Court challenging the decision of the arbitral tribunal not to terminate the ongoing arbitration proceedings.
On February 1, the Supreme Court had set aside three high court orders including the attachment of properties of Future Group and its directors and the refusal to grant a stay on the final arbitral award which had restrained FRL from going ahead with its deal with Reliance while ordering fresh adjudication.
The top court had said that Future Coupons Private Ltd (FCPL) and FRL were not provided sufficient opportunities while dealing with the pleas of Amazon against the merger deal and requested the Chief Justice of the Delhi High Court to set up a bench for speedy disposal of the case.
The Supreme Court had set aside the high court's order of February 2 last year, by which it had directed FRL to maintain status quo concerning the merger deal.
The March 18, 2021 order of the high court, upholding the Emergency Arbitral award, imposing a cost of Rs 20 lakh on FRL as well as its directors and attaching their properties, was also set aside by the top court which remanded the pleas of the Future group firms relating to arbitral award on the merger deal with Reliance Retail back to the Delhi High Court.
The 28-page judgement of the apex court had also quashed the October 29, 2021 order of the high court declining a stay on an arbitration tribunal decision refusing to interfere with the Emergency Award (EA) of the Singapore International Arbitration Centre (SIAC). The EA restrained FRL from going ahead with the merger deal.
Kishore Biyani and 15 others including FRL and FCPL have been embroiled in a series of litigations with Amazon, an investor in FCPL, over the deal with Reliance. Following the EA, a three-member arbitral tribunal was constituted to decide the issues arising from the deal.