Supreme Court rules in favour of Amazon in case against Future-Reliance deal

09 Aug 2021


The Supreme Court today ruled in favour of e-commerce giant Amazon by holding that Singapore's Emergency Arbitrator (EA) award, restraining the Rs24,731 crore merger deal of Future Retail Ltd (FRL) with Reliance Retail, was valid and enforceable under Indian laws. 

The bench of Justice R F Nariman stayed the division bench order of Delhi High Court, which had allowed the Future Retail-Reliance Retail deal to progress and upheld the single judge bench order, which had directed attachment of assets of Biyani and Future Retail directors.
The bench dealt with the larger question and held that an award of an EA of a foreign country is enforceable under the Indian Arbitration and Conciliation Act despite the fact that the term EA is not used in arbitration laws here.
The SC ruling is confined to the enforceability of Emergency Arbitrator order and does not deal with the merits of the Future Retail-Amazon dispute.
The Amazon-Future case has been among the most closely tracked case in the retail space recently. As the saga potentially sees a close, tracks how the case has unfolded in the last 1-2 years.
“We welcome the verdict of the Hon’ble Supreme Court of India upholding the Emergency Arbitrator’s award. We hope that this will hasten a resolution of this dispute with Future Group,” an Amazon spokesperson said.
In 2019, Amazon bought a 49 per cent stake in Future Coupons. Future Retail was a step-down subsidiary of Future Coupons.
In August 2020, the board of FRL approved a Rs25,000-crore deal under which the company’s retail and wholesale business was acquired by Reliance Retail.
In October 2020, the Singapore-based Emergency Arbitrator passed an interim orders restraining FRL from proceeding with the deal.
In December 2020, Future Retail moved a suit in the Delhi High Court and sought to restrain Amazon from writing to regulators.
In December 2020, a single judge Bench of Justice Mukta Gupta held that prima facie Amazon's conduct was that of tortious interference, that FRL board resolution was valid, that Amazon was potentially in violation of FEMA. Amazon appealed against this order, which is still pending before division bench of the high court.
In January 2021, Amazon moved the Delhi High Court seeking enforcement of the Singapore-based Emergency Order staying the Future Retail Deal.
On 2 February 2021, a single judge bench of Justice Midha issued interim directions for "status quo" on Future Retail deal to "protect" Amazom. On the very next day, Future Retail moved the division bench of Delhi High Court to reverse the interim status quo order.
On 8 February 2021, a division bench of the high court overturned the interim order of Justice Midha granting "status quo" on the deal and granted relief to FRL.
On 11 February, Amazon moved the Supreme Court against the division bench order of Delhi High Court, lifting the interim status quo.
On 22 February, the Supreme Court allowed FRL to proceed with a plea for a nod before NCLT, but restrained NCLT from finalising orders sanctioning the deal.
On 18 March, the Justice Midha led bench of the Delhi High Court passed final orders, confirming the interim order that EA order needs to be complied with. Further, the order stated that Future Retail and Biyani wilfully disobeyed the EA order and must face consequences. The high court directed attachment of assets of Biyani and other Future promoter directors. It also asked Biyani and other promoter directors to show cause why they should not be placed in civil jail for 3 months.
On 22 March, a division bench of the HC stayed the operation of the order of the single judge bench and lifted stay on FRL deal, allowing the deal to proceed. 
On 17 April, Amazon moved SC, challenging lifting of the stay on FRL-RIL deal, by the Delhi HC.
This SC verdict comes nearly a year after Reliance Retail announced that it will be buying Future Group's retail, wholesale and the logistics and warehousing business by way of a slump sale for Rs24,713 crore in August 2020. 

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