Delhi HC admits Amazon plea against Future Retail

Our Bureau Mumbai | Updated on January 13, 2021 Published on January 13, 2021

The Delhi High Court admitted Amazon’s plea against Future Retail on Wednesday and will hear the case on February 12. The two-judge bench maintained that the FRL-Reliance Industries Limited deal was maintainable, and the decision was to be taken by SEBI on the same.

However, the bench has also directed the Kishore Biyani-owned Future Retail to file a response in the matter of Amazon challenging prima facie observations, by a single judge, in Amazon’s attempt to control FRL was violative of FEMA and FDI rules.

The bench, consisting of chief justice DN Patel and justice Jyoti Singh heard the appeal and maintained that whether to pass the Future Retail-Reliance deal remains in the hands of SEBI. FRL has to respond to the prima facie observations made by Justice Mukta Gupta on December 21.

“Under Indian law, when there is an arbitration agreement between the parties, disputes arising under the contract have to be settled through arbitration. If parties have prescribed institutional arbitration, it will be decided under the aegis of that institution. If a party raises a dispute which is arbitrable, then under Section 8 of the Act, on an application, the court has the power to refer the subject to arbitration and can play a supportive and facultative role, in line with the contractually agreed dispute resolution mechanism,” said Gopal Jain, Senior Advocate, Supreme Court of India. “The High Court agreeing to hear the matter is a positive step for the Indian Arbitration Act. The ruling in this matter will play a role in enforcing belief in arbitration as a chosen mode of redressal,” said K Narasimhan, Advocate, Madras High Court.

Also read: Deal with Reliance Industries: Won’t pay compensation, Future Group tells Amazon

Amazon, in its appeal, sought clarity on these observations as they have a bearing on its case in arbitration proceedings initiated before Singapore International Arbitration Centre.

It has further said that the observations are inconsistent with the findings in the SIAC emergency arbitral order of Oct. 25, 2020 against FRL’s asset sale under a Rs ₹24,713 crore deal with Reliance.

Earlier this month, BusinessLine had reported that in a letter addressed to Amazon, the Future Group has told Amazon that it is not liable to pay any compensation as there has been no breach of contract. The person said that this appeal could be a response to this letter in order to seek compensations from the Kishore Biyani-led company.

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Published on January 13, 2021
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