The Supreme Court on Friday ruled in favour of e-commerce giant Amazon in its legal battle against the proposed Rs 24,713-crore merger deal between Future Retail Limited and Reliance Retail, Live Law reported.
One of the main questions raised in the case was about the validity and enforceability of a Singapore-based single-judge arbitration panel’s decision to restrain Future Retail Limited from going ahead with its deal with Reliance Retail, under the Indian laws.
Justice RF Nariman said that the Emergency Arbitrator’s decision could be enforced in India. “Emergency arbitrator’s award holds good under Section 17(1) of the Arbitration and Conciliation Act and single judge’s order for such award cannot be appealed under Section 37(2),” he added.
The court noted that the Act confers autonomy to parties to arbitration proceedings to decide disputes in accordance with institutional rules, including through emergency arbitrators passing interim orders.
“Such orders are an important step in aid of decongesting the civil courts and affording expeditious interim relief to the parties,” the judgement noted.
The verdict took a toll on the Reliance Industries stock. The conglomerate’s shares closed at Rs 2,089.05 apiece, down 2.07%.
Various stocks of the Future Group fell too after the apex court’s judgement. At the end of the day’s trading, shares of Future Consumer, Future Lifestyle, Future Enterprises, Future Retail and Future Supply Chain were down to the tune of 10%.
Future Retail Limited stated in a regulatory filing that it intends to pursue “all possible avenues” to conclude the deal with Reliance Industries. The company added that the verdict addresses two limited points related to the enforceability of the [Emergency Arbitrator’s] order and not the merits of the disputes.
The case so far
The matter sparked off in August last year after Future Group, led by Kishore Biyani, had agreed to enter the deal with Mukesh Ambani’s Reliance Retail, under which it would sell its wholesale, logistics, retail, and warehouse businesses. Amazon objected to the deal, arguing that according to a separate agreement it signed with a unit of Future Group in 2019, it could not sell its retail assets to a list of companies, including Reliance.
Following the development, Amazon had written to the market regulator Securities and Exchanges Board of India and the Competition Commission of India, urging them to take into consideration the Singapore arbitrator’s decision as it was a binding order and not allow the deal to go through.
Future Retail had then approached the Delhi High Court, seeking that Amazon should not interfere with the deal. Then on February 2, a single-judge bench of the High Court directed the statutory authorities to maintain status quo on the proceedings of the deal, effectively blocking it from coming to fruition.
However, the decision was overturned on February 8 by a two-judge bench of the High Court, which held that bodies like the National Company Law Tribunal, CCI and SEBI, cannot be restrained from proceeding in accordance to law with regard to the deal.
After this, Amazon had approached the Supreme Court challenging the Delhi High Court’s last order, saying it was illegal and arbitrary.