US-based e-commerce giant Amazon.com NV Investment Holdings LLC, and FRL have been embroiled during a bitter legal fight over FRL’s Rs 24,713 crore merger affect Reliance Retail.
We will decide whether the EA award falls under section 17 (1) (which deals with the interim award by arbitral tribunal) of the Arbitration and Conciliation Act. And if yes, then whether it is often enforced under section 17 (2) (of the Act), said a bench comprising justices R F Nariman and B R Gavai.
The provisions of the Act affect the interim measures ordered by an arbitral tribunal and section 17 (1) says: Unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a celebration, order a celebration to require any interim measure of protection because the arbitral tribunal may consider necessary in respect of the subject-matter of the dispute.
Section 17 (2) provides that the arbitral tribunal may require a celebration to supply appropriate security in reference to an interim measure ordered.
The apex court’s observations came when senior advocate Harish Salve, appearing for FRL, mentioned judgments on validity and therefore the enforceability of arbitral awards and said that there was no notion of EA under the Indian law on arbitration and conciliation and, in any case, there was no arbitration agreement to the present effect.
Assailing the single-judge order which had given relief to Amazon by holding that EA’s award was enforceable, Salve said it amounted to amending the Arbitration and Conciliation Act by construction.
We will decide the matter of maintainability (of EA award) and whether the EA order is enforceable, the bench said.
There can’t be arbitral proceedings until a tribunal has been constituted with the facility to pass a gift, Salve said.
All arbitral awards need to be enforced under the Civil Procedure Code and not under the Arbitration law and hence, it can’t be said that FRL cannot take recourse to CPC in appealing against the EA’s award and its legality, he said.
The hearing within the case would resume on Wednesday.
Earlier, Amazon had told the bench that the Biryanis of Future Group had negotiated with it to enter into certain agreements and are bound by Singapore’s EA award restraining FRL from going ahead with its merger affect Reliance Retail. It reiterated that EA’s award was enforceable.
Kishore Biyani and 15 others including FRL and Future Coupon Pvt Ltd (FCPL) are made parties by Amazon during a batch of pleas challenging the Delhi supreme court order of the division bench which paved the way for the deal.
On Washington’s Birthday, in its interim order, the apex court had asked the National Company Law Tribunal (NCLT) to not pass the ultimate order-related regulatory approvals for the amalgamation.
Amazon moved the highest court against the order of the Delhi supreme court division bench which paved the way for the Reliance-FRL deal.
On February 8, the division bench had stayed the single-judge direction to FRL and various statutory authorities to take care of the established order on the mega-deal.
The interim direction was passed on FRL’s appeal challenging the Groundhog Day order of the only judge.
In August last year, the longer-term group had reached an agreement to sell its retail, wholesale, logistics, and warehousing units to Reliance.
Subsequently, Amazon took FRL into EA before the SIAC over alleged breach of contract by the longer-term group.
Amazon had first filed a plea before the supreme court (single judge) for enforcement of the October 25, 2020, EA award by Singapore International Arbitration Centre (SIAC) restraining FRL from going ahead with the effect of Reliance Retail.
The supreme court division bench had however said that it had been staying the single-judge order as FRL wasn’t a celebration to the share subscription agreement (SSA) between Amazon and FCPL and therefore the US firm wasn’t a celebration to the FRL-Reliance deal.
FRL, in its appeal, had claimed that if the Groundhog Day order didn’t stay it might be an absolute disaster for it because the proceedings before the NCLT for approving the amalgamation scheme are placed on hold.
It had contended that the only judge’s established order will effectively derail the whole scheme which has been approved by statutory authorities in accordance with the law.
In its suit before the only judge for enforcing the EA award, Amazon has sought to restrain FRL from taking any steps to finish the transaction with entities that are a part of the Mukesh Dhirubhai Ambani (MDA) Group.
Amazon has also sought detention of the Biryanis, directors of FCPL and FRL, and other related parties in civil prison and attaching of their properties for alleged willful disobedience of the EA order.
After the SIAC’s EA order, Amazon wrote to the Securities and Exchange Board of India (Sebi), stock exchanges, and CCI, urging them to require into consideration the arbitrator’s interim decision because it may be a binding order.
FRL thereafter moved the supreme court to restrain Amazon from writing to Sebi, CCI, and other regulators about SIAC’s order, saying it amounts to interfering with the agreement with Reliance.
A single judge on December 21 last year had on FRL’s plea passed an interim order allowing Amazon to write down to the statutory authorities, but also observed that clear it appeared the US e-commerce giant’s plan to control Future Retail was violative of FEMA and FDI rules.
Against the observation, Amazon moved an appeal before a division bench and through its pendency, it filed the suit for the enforcement of the EA award.