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Big relief for Amazon; Supreme Court upholds plea against RIL-Future deal

Big relief for Amazon; Supreme Court upholds plea against RIL-Future deal

Amazon vs RIL-Future: The court said that the Emergency Arbitrator Order is enforceable by Indian laws

SC upholds Amazon's plea against RIL-Future deal SC upholds Amazon's plea against RIL-Future deal

The Supreme Court upheld e-commerce giant Amazon’s plea seeking to put a hold on the Rs 24,731 crore deal between Reliance Retail and Future Retail. The court said that the Emergency Arbitrator Order is enforceable by Indian laws. The Supreme Court bench asked if emergency award order is covered within Section 17 (1) and can be enforced under Section 17(2) of the Arbitration Act.

A two-judge bench of Justices RF Nariman and BR Gavai said that the Singaporean arbitrator’s decision that stalled the deal between the two retail giants holds merit and Amazon’s objections are valid as well as applicable in the country. Amazon had argued that the arbitrator’s order is binding, while Future had argued it was not. Both sides agreed to use the Singapore arbitrator in case of disputes when they entered into a $200-million deal in 2019.

After extensive arguments from Senior Counsel Harish Salve and Gopal Subramanium appearing for Future and Amazon respectively, the bench framed two main questions for consideration:

1. Whether Section 17(1) of the Arbitration and Conciliation Act, 1996 covers an Emergency Arbitrator's awards

2. Whether the same can be enforced under Section 17(2) of the Act?

The court answered both questions in the affirmative today and said “The Emergency arbitrator’s award under Section 17(1) holds good and can be enforced under Section 17(2). The Single judge’s order is upheld.”

Jeff Bezos’ Amazon and Mukesh Ambani’s Reliance Industries have been involved in a tussle since the latter signed a deal to acquire Future’s assets. Amazon has accused Future of violating pre-existing clauses that give them the right of first refusal. Future has denied wrongdoing.

Shares in Future Retail fell 6% after the order while those in Reliance Industries were down 1.3%.

Amazon had first filed a plea before the high court for enforcement of the October 2020 EA award by the Singapore International Arbitration Centre (SIAC) restraining Future’s deal with Reliance Retail.

Around 1,300 of Future's more than 1,700 retail outlets in 400 cities sell groceries. That makes Future a prized asset for both Reliance and Amazon.

 

Also read: Singapore's emergency arbitrator held Future Retail investment 'legal': Amazon in SC