New Delhi: In a setback to the US e-commerce giant Amazon.com Inc, the division bench of Delhi High Court on Wednesday, put on hold its arbitration proceedings with Kishore Biyani led Future Group in light of an India's competition watchdog suspending the 2019 deal between the two sides.
Amazon so far successfully used the terms of its 2019 investment in a Future Retail's parent firm to block the Indian retailer's attempt to sell assets to rival Reliance Industries for $3.4 billion, alleging breach of contract.
The Division Bench of the Delhi High Court has also halted the single judge order which had dismissed Future Group’s petition seeking to terminate the Singapore arbitration process with Amazon.
According to reports, the Bench, led by Chief Justice D N Patel, issued notice on two appeals filed by Future Retail and Future Coupons impugning the single judge order.
Future Retail and its promoters moved before the Division Bench of the high court on Wednesday challenging the order passed on Tuesday that dismissed the group’s petitions for termination of the Amazon arbitration.
After hearing the submissions made by the counsels for FRL and FCPL, the Delhi High Court has issued notice and adjourned the matter to February 1, 2022, for hearing.
The Singapore International Arbitration Center (SIAC) is adjudicating Amazon's objections against Future Group's Rs 24,713 crore deal with Reliance Retail Ventures Ltd, a subsidiary of Reliance Industries Ltd.
When asked for comments, Ashish K Singh, managing partner at Capstone Legal told ABP News, "Interim stay is a big setback to Amazon because this means that Regulators in India will be able to take a call on the veracity of the deal between Future and Reliance. However, staying of Arbitration proceedings is not the general rule but happens only in exceptional cases."
Amazon and Future have been locked in a bitter legal tussle after the US e-commerce giant dragged Future Group to arbitration at the Singapore International Arbitration Centre (SIAC) in October 2020, arguing that FRL had violated their contract by entering into a deal for the sale of its assets to billionaire Mukesh Ambani's Reliance Retail on a slump sale basis for Rs 24,500 crore.
In December, the Competition Commission of India (CCI) suspended its over-two-year-old approval for Amazon's deal to acquire a 49-per cent stake in Future Coupons Pvt Ltd (FCPL), FRL's promoter, and also slapped a penalty of Rs 202 crore on the e-commerce major.
Amazon is objecting to the sell-off plans, accusing Future Group of breaching its 2019 investment pact. Future Coupons was founded in 2008, and is engaged in the business of marketing and distribution of gift cards, loyalty cards and other reward programmes to corporate customers.
Several issues arising from the Amazon-Future legal battle are pending before the Supreme Court.
Reliance Retail Ventures, had for the second time - extended the timeline for completing its Rs 24,713 crore deal with Future group to March 31, 2022 as it still awaits regulatory and judicial clearances.