Last month, the high court had rejected FRL’s plea to stop Amazon from intervening in the transaction with Reliance but also observed that the deal was lawful. It also noted that the arbitration agreement was between promoter entity Future Coupons Pvt. Ltd (FCPL) and Amazon, and not with FRL and conflating this to encompass all Future Group retail assets would violate foreign exchange rules.
The Singapore International Arbitration Centre (SIAC) had said in November last year that the Future-Reliance transaction should be put on hold until it gave a final ruling on the plea filed by Amazon.
Amazon fears that the Delhi High Court’s observation could have a bearing on arbitration proceedings in Singapore. The US retailer also said in its latest suit that the dispute cannot be taken up by civil courts in India and should be referred to the Singapore arbitration panel.
“The learned single judge erroneously observed the suit to be maintainable and while declining to interfere with the merits of the emergency arbitration (EA) order and upholding its legal validity, the judge made certain prima facie observations on the very same issues which were adjudicated in the EA order,” Amazon said in its petition, a copy of which ET has seen. These observations were being used by FRL to challenge the EA order, it said.
The division bench of the Delhi High Court, headed by Chief Justice DN Patel and Justice Jyoti Singh will hear the matter on Wednesday.
Amazon had approached the Securities and Exchange Board of India and stock exchanges asking them to review the Future-Reliance transaction, saying that that Delhi High Court had ruled in its favour and the deal should therefore be halted. Amazon had also accused FRL of misrepresenting the high court order by stating that the basis of the SIAC stay had been vitiated.
Amazon owns about 5% of FRL—which houses all food and grocery chains such as Big Bazaar and Easyday—through a 49% stake it acquired in FCPL for ₹1,500 crore in 2019. After Future Group agreed to sell all retail assets to Reliance for ₹25,000 crore in August 2020, Amazon accused Future of breaching their contract, which barred it from selling out to rivals including Reliance.
Experts questioned whether Amazon would be able to use a portion of the order while challenging the rest of the ruling.
“If there is a challenge to a mere observation, then the proper course is to file a review application or application for rectification before the same court which passed the order in question,” said Ashish K Singh, managing partner of law firm Capstone Legal. “An appeal in which a substantive portion of the order has not been challenged is unlikely to succeed.”