New Delhi Aug 6(ILNS): The Supreme Court today upheld the Delhi High Court Single-Judge order on Amazon’s petition against the Future-Reliance deal and held that Singapore’s Emergency Arbitrator Award, restraining Future Retail from going ahead with its merger deal with Reliance Retail, is valid under Indian law and can be enforced.
A Divisional Bench comprising of Justice R.F. Nariman and Justice B.R. Gavai stated, “The emergency arbitrator’s award under section 17(1) and the single judge’s order is upheld.”
Amazon had moved the top court against the Delhi High Court’s Division Bench order, which paved the way for the Reliance-FRL deal. Amazon’s plea stated, “The group had earlier unequivocally stated that they will continue to take steps to complete the impugned transaction. The greater the progress made towards the completion of the transaction, the harder it will be to unravel it. Over time, the interests of additional third parties may also become entwined with the impugned transaction and be subsequently compromised. Further, irreparable harm will be caused to the petitioner.”
The apex court bench had raised two crucial issues with regards to the matter:
1. Whether section 17(1) of the Arbitration and Conciliation Act, 1996 covers an Emergency Arbitrator’s award, and
2. Whether the same can be enforced under section 17(2)
A division bench of the High Court presided by Chief Justice D.N. Patel and Justice Jyoti Singh while passing the order had observed that since Future Retail Limited (FRL) is not a party to Arbitration Agreement, prima facie, group of companies doctrine can’t be invoked. The High Court further noted that in preliminary findings there was no reason to seek a status quo order from a single judge. “Statutory authorities like SEBI cannot be restrained from proceeding in accordance with the law,” the bench said. The division bench had also stated that the observations made by it are only prima facie and the single judge shall not be influenced by it while passing its order.
On the last date on hearing, Senior Advocate Gopal Subramanium appearing for Amazon submitted, “the Biyanis of Future Group had negotiated with it to enter into certain agreements and are bound by Singapore’s Emergency Arbitrator award restraining FRL from going ahead with its merger deal with Reliance Retail. It reiterated that EA’s Award was enforceable.”
Whereas, Senior Advocate Harish Salve appearing for FRL submitted, “There was no provision for EA under the Indian Law” and “it cannot be done by the process of construction” while referring to the single judge order of the Delhi High Court which had held the award of the EA to be valid./ILNS/GM/SV/SNG