Delhi HC Dismisses Future Group's Plea to End Arbitration With Amazon

In a setback to the Future Group, the Delhi High Court on Tuesday dismissed its pleas seeking a direction to a Singapore tribunal to deal with its termination application in connection with deal with Amazon.

(Image: The Quint/Shruti Mathur)

In a setback to the Future Group, the Delhi High Court on Tuesday, 4 January, dismissed its pleas seeking a direction to a Singapore tribunal to deal with its termination application in connection with deal with Amazon.

Justice Amit Bansal had reserved the orders on Monday after hearing on pleas filed by Future Retail Ltd (FRL) and Future Coupons Ltd (FCRL).

The Future Group moved the high court seeking direction for the Singapore tribunal to hear termination application ahead of the scheduled hearings in the arbitration case.

In December last year, the Competition Commission of India (CCI) had imposed a penalty of Rs 202 crore on Amazon and suspended its approval for the e-tailer's deal with Future Coupons, a promoter firm of the group's public listed company Future Retail Ltd, seeking more information.

The Singapore tribunal had held that it could not accommodate its termination application ahead of the scheduled hearings on the main case.

Amazon Vs Future Group

Citing the CCI order, the Future Group argued the agreement which provided for the arbitration proceedings itself is rendered invalid and as such, the ongoing proceedings, too, would be irrelevant. Amazon opposed it, saying that arbitration and the underlying contract are independent of each other, and also cited legal options, such as appeals, available against the CCI order.

The CCI said that Amazon ought to have notified the combination and Future Retail (FRL) shareholding agreement for the purpose of acquisition of strategic rights over FRL through FCPL shareholders' agreement (SHA), and commercial agreements between Amazon and Future groups, for the purpose of establishing strategic alignment and partnership between Amazon Group and FRL as well as have a 'foot-in-the-door' in the India retail sector.

The CCI's order further added that given that the combination is between players who are known in the online marketplace and offline retailing, and they have contemplated strategic alignment between their businesses, the Commission considers it necessary to examine the combination afresh based on a notice to be given with true, correct and complete information, as required therein.

In 2020, Amazon invoked arbitration after Future Retail announced its asset sale deal with Reliance Industries Ltd's wholly-owned subsidiary, Reliance Retail.