E-commerce giant Amazon has again sent a letter to the Securities and Exchange Board of India (Sebi), informing the markets regulator of the formation of the arbitration tribunal at the Singapore International Arbitration Centre (SIAC), while urging it to suspend the review of Future Group’s $3.4-billion deal with Mukesh Ambani-owned Reliance Industries (RIL), revealed sources.
The letter addressed to Sebi Chairman Ajay Tyagi said since the emergency arbitrator of SIAC had passed on order restricting the deal between Future Retail (FRL) and RIL, and the high court (HC) had accepted the justification of the emergency award (EA), any decision taken would have to be in cognisance of the same, said sources.
The letter, dated January 5, informed Sebi that the SIAC had constituted the arbitral tribunal in the arbitration proceedings initiated by Amazon against inter alia FRL, Kishore Biyani and Rakesh Biyani. A copy of the communication received from the SIAC, dated January 5, had also been enclosed with this letter.
The letter highlighted that in view of the constitution of the arbitral tribunal, the interim award passed by the EA stands automatically extended for the duration of the arbitration proceedings unless it is reconsidered/modified/vacated by the arbitral tribunal.
It reiterated that FRL continues to be expressly injuncted and restrained by the interim award from taking any steps in furtherance of or in aid of the impugned transaction. This includes filing or pursuing any application before any person, including Sebi or agencies in India. Since the interim award is deemed to be an order of the court and now stands automatically extended pursuant to the SIAC rules, the letter said FRL continues to suffer from a fatal disability to pursue its application for issuance of observation letter/no-objection letter before any regulatory authority.
The letter said that in view of Section 17(2) of the Arbitration and Conciliation Act, 1996 (A&C Act), the interim award passed by the EA is deemed to be an order of a court under the Code of Civil Procedure, 1908, and continues to be in force. The letter said it is a matter of record that no appeal under Section 37 of the A&C Act has been filed against the interim award.
The next phase of arbitration proceedings between Jeff Bezos-led Amazon and Kishore Biyani-headed Future Group is expected to begin soon in Singapore.
Singaporean barrister Michael Hwang has joined the three-member arbitration tribunal at the SIAC that is looking into the Amazon and Future Group dispute over the latter’s $3.4-billion deal with RIL, according to sources. The other two members of the tribunal include Albert van den Berg and Jan Paulsson — they were proposed by Amazon and Future, respectively.
The development of the constitution of the tribunal comes at a time when the Delhi HC in December 2020 refused to restrain Amazon from interfering in FRL’s deal with Reliance Retail by writing to statutory authorities. The order was pronounced by a single judge Bench of Justice Mukta Gupta in the suit by FRL after an emergency arbitrator of the SIAC restrained Future Group from taking any steps in furtherance of the transaction with Reliance Retail.
The Delhi HC, prima facie, found that the suit filed by FRL was maintainable, the EA was valid, and that FRL’s resolution approving the transaction with Reliance was also valid. The court opined that it was ‘a matter of trial’ to determine whether Amazon’s case outweighed FRL’s claim and for now, it was for the statutory authorities (or) regulators to come to their own right conclusion.
In August 2020, Future Group struck a $3.4-billion asset sale deal with RIL. Amazon then sent a legal notice to Future, alleging the retailer’s deal breached an agreement with the American e-commerce giant.-Business Standard