The court of Chief Justice of Delhi High Court will today hear appeals filed by Future Retail and its promoters against a decision by a single judge bench yesterday that refused to issue directions to a Singapore arbitration panel.
Yesterday, a Delhi High Court bench comprising Justice Amit Bansal had refused to accept arguments by Future Retail and its promoters that the Singapore arbitration body did not have any right to go ahead with the arbitration proceedings after India’s Competition Commission withdrew an earlier approval given to Amazon to invest in Future Retail’s promoter.
In 2019, Amazon had invested Rs 1,430 cr in Future Coupon Pvt Ltd — one of the promoters of Future Retail.
Later, when Future Coupons and other promoters wanted to sell their stake in Future Retail to Reliance Industries, Amazon approached the Singapore International Arbitration Centre claiming that the move was against the deal it had struck with Future Coupons.
The arbitration proceedings, which are continuing in Singapore, have therefore thrown a wrench in Reliance Group’s attempt to buy Future Retail — one of India’s largest modern retailer.
Before approaching the Delhi High Court, Future Retail had first approached the arbitration panel with an application seeking an expedited termination of the arbitration proceedings, claiming that India’s Competition Commission has now withdrawn the permission it had given in 2019 for the Amazon-Future Coupons deal.
However, the arbitration panel refused to hear the termination plea on priority, and said it would continue regular proceedings while also hearing the termination plea in due course.
Aggrieved by this, Future Retail approached the Delhi High Court seeking its intervention in the matter, and urging it to direct the arbitration body to take up the termination plea first.
This was dismissed yesterday by Justice Amit Bansal. Today, an appeal against Justice Bansal’s order will be heard by the Chief Justice’ court today at around 2:30 PM.
However, it remains to be seen whether an Indian court can, and will, issue directions to an international arbitration body on how to conduct its proceedings, and even if it does, whether the international body will abide by it.
If Amazon wins the arbitration, it can try to implement the award within and outside India.
Reliance Industries’ retail arm is today India’s largest chain of organized retail stores, and is hoping to consolidate its leadership by acquiring the No.2 Future Group.
Future Group, which runs chains such as Big Bazaar, Central and Brand Factory, has been facing financial troubles for several years related to lack of adequate returns from its investments.