Amazon v Reliance: When parties to the contract are not objecting, who is Amazon to jump? Salve argues for Future Retail before Delhi High Court

The Delhi High Court today issued summons in Future Retail's suit concerning its deal with Reliance, which was recently stalled by an Emergency Arbitrator of the Singapore International Arbitration Centre (SIAC) in favour of Amazon [Future Retail v. Amazon]..The matter was heard at length by a Single Judge Bench of Justice Mukta Gupta on the point of issuance of an ad-interim injunction against Amazon. .Earlier this year, Kishore Biyani-owned entity Future Retail, which runs Big Bazaar and other retail outlets, had announced its deal with Mukesh Ambani-owned Reliance Retail Ventures Limited. .Subsequently, Amazon, an investor in one of the shareholders of Future Retail, moved the Emergency Arbitrator on the ground that Reliance fell in the negative list of 30 entities with which Future Group could not transact..The Emergency Arbitrator had then passed an interim award injuncting Future Group from taking any steps in furtherance of the transaction with Reliance..[Breaking] Reliance - Future Group Deal: Amazon gets relief as Singapore Emergency Arbitrator stalls the sale of Future Group.Clarifying that Future Retail was not challenging the award at this moment, Senior Advocate Harish Salve argued for issuance of directions barring Amazon from interfering with its contract with Reliance..Contending that Amazon has no say in the transaction between Future Retail and Reliance, Salve said,."Amazon invested in a company called Future Coupons Pvt Ltd (FCPL). FCPL and Biyani had a shareholders agreement qua me i.e Future Retail (FRL). Amazon is not a part of the agreement. Amazon is not my shareholder.".Salve stated that in view of the financial distress, a resolution was passed in August by FRL, which proposed a scheme for transfer of its assets to Reliance, and that Amazon was aware of the same. ."When parties to the contract are not objecting to the transaction with a restricted person, who is Amazon to jump?", he argued. ."I've brought an action for unlawful interference..The primary tort is interference in performance of a lawful contract (with Reliance)."Senior Advocate Harish Salve.He added, "I have a lawful contract with Reliance which will run its course. You have your remedy, get a regular (arbitral) tribunal constituted. I have no relation with Amazon because if I do, I've violated (FDI) law...Amazon cannot invest in multi-brand retail. Court may please see the balance of convenience which is in my favour. If Amazon manages to derail my transaction, it will be the end of the road for me. Let them (Amazon) sue the Biyanis if they want to. They have their defence.".Salve also submitted that the emergency award was not binding or recognised under Indian law..Reliance, as well as the Future promoters Kishore Biyani and others, sided with Future Retail and argued that the scheme proposed by the FRL Board must be allowed to take its course. .Senior Advocate Mukul Rohatgi, appearing for the promoters, argued that the transaction with Reliance, after sanctions from statutory regulators, would ultimately go before the National Company Law Tribunal (NCLT) for approval. Thus, currently, the emergency award should be ignored, he said.."The Court must order that Amazon has no right to interfere with the transaction", Rohatgi argued as he pointed out as per the arbitration agreement between FCPL and Amazon, the venue and seat of arbitration was Delhi and the substantive law was Indian law. .Senior Advocate Vikram Nankani appeared along with Rohatgi. .Senior Advocate Abhishek Manu Singhvi appeared for Reliance. he argued that the present transaction has to go through four statutory schemes under the Companies Act, its Rules, the NCLT proceedings and the SEBI Listing Rules.."I'm re-enforcing Mr Salve. It (Emergency Award) has the effect of completely stopping the statutory discretion...An arbitral award cannot stop statutory proceedings", he said. .Singhvi also argued that the concept of "Emergency Arbitration" was alien to Indian courts, especially when any arbitration by Amazon had to be India-based.."Emergency Arbitration is the most important point of law. It is a creature unknown to Indian law and should not be looked at...it may have whatever status in Singapore.".He added that the SIAC Rules, under which the Emergency Arbitration was held, were applicable to intra-arbitration procedure and as per the Indian law..Singhvi also accused Amazon of taking contrary stands before the Competition Commission of India and the Securities and Exchange Board of India (SEBI) with regard to its relationship with the Future Group entities. ."This is a mischief being played. Object is to be a dog in the manger and delay it."Senior Advocate Abhishek Manu Singhvi.Senior Advocate Gopal Subramanium appeared for Amazon today. He contended that there were three relevant agreements - the FRL Shareholding Agreement (SHA), the FCPL SHA and the Share Subscription Agreement, and that all were "at the heels of each other". ."We have the FRL SHA and FCPL SHA. Both are controlled by same promoters ie the Biyanis", he said as he asserted that both SHAs had similar clauses, including the restricted persons list..Subramanium further contended that all the contentions raised before the Court were heard and decided by the Emergency Arbitrator in detail after considering the Indian law. ."All these arguments were tried and rejected and now they have a suit here."Senior Advocate Gopal Subramanium."Under Rule 30 of SIAC Rules, Emergency Arbitrator was appointed, who gave a reasoned order...It is a very detailed award because the Emergency Arbitrator wanted to be fair to all parties...There is no injunction against statutory bodies", Subramanium further pointed out. .Amazon also justified the Emergency Arbitration on the ground that by virtue of Section 2(8) of Arbitration Act, SIAC Rules were embedded in the arbitration agreement..Subramanium also argued that as an investor, Amazon had certain protective rights, but was not in control of FCPL or FRL. .Amazon also objected to the maintainability of the present suit. .During the course of the hearing, the Court questioned the parties on the law pertaining to the concept of non-signatories to an arbitration agreement. .The hearing in the case will continue tomorrow. .Read the entire account of the hearing here: