Amazon vs Future: Delhi High Court prima facie finds Emergency Award enforceable, orders status quo on FRL-Reliance deal [READ ORDER]

In a big relief for Amazon, the Delhi High Court today directed Future Retail Ltd to maintain status quo in relation to its with deal with Reliance (Amazon.com NV Investment Holdings LLC v. Future Coupons Pvt Ltd & Ors)..While reserving its order in Amazon's interim plea to stop Kishore Biyani's Future Group companies and officials from relying on approvals given by statutory authorities in relation to the deal, a Single Judge Bench of Justice JR Midha said, ."...immediate orders are necessary to protect the rights of the petitioner till the pronouncement of the reserved order.".The Court accordingly ordered that till the pronouncement of the order, FRL and other respondent parties cannot proceed any further with the deal with Reliance. .In that view of the matter, the respondents are directed to maintain status quo as on today at 04.50 P.M. till the pronouncement of the reserved order.Delhi High Court.The Court also clarified that all authorities shall maintain status quo in all matters that are in violation of the Emergency Award passed in Amazon-Future dispute and file a status report in this regard within 10 days. .Additionally, FRL has been directed to state all steps and actions taken by it after the date of the Emergency Award i.e. October 25, 2020, in connection with the deal with Reliance..The Court further gave a prima facie finding that the Emergency Arbitrator rightly proceeded against FRL, that the Emergency Award was not a nullity, and that it was enforceable under Section 17(2) of the Arbitration Act. .It also prima facie opined that the Emergency Award was appealable under Section 37 Arbitration Act. .Amazon had moved the Delhi High Court last month for enforcement of the Emergency Award passed under Section 17(2) of the Arbitration & Conciliation Act. .It alleged that Future Group, Kishore Biyani as well as other promoters and directors were “deliberately and maliciously” disobeying the Emergency Award in spite of their participation in the arbitration proceedings..Amazon asserted that Future Coupons Pvt Ltd, a shareholder in FRL and in which it holds 49% stake, could not have given its consent to the FRL-Reliance deal in the absence of its approval. .The e-commerce giant told the Court that had it not been for the assurance given by Future Group promoters and FCPL that the retail assets of FRL would be protected, there would have been no investment in FCPL by the American e-commerce company. .Amazon thus stated that it had "protective rights" in FRL and not "controlling rights" in FRL and the same were being breached by the sale of FRL assets to a restricted entity i.e. Reliance. .FRL, on the other hand, argued that Emergency Award was a nullity. .Relying on the prima facie view given by the Single Judge in FRL suit against Amzaon, FRL contended that there was no arbitration agreement or privity of contract between Amazon and FRL. .It was also pointed out that the Single Judge had already prima facie opined that the Board Resolution approving the transaction with Reliance was valid..FRL also argued that the Emergency Award was not enforceable under Section 17(2). .Senior Advocates Gopal Subramaniam, Rajiv Nayar, Gourab Banerji, Nakul Dewan and Amit Sibal, briefed by P&A Law Offices and AZB & Partners, appeared for Amazon..Senior Advocates Harish Salve, Vikram Nankani, and Darius Khambata appeared for FRL and other respondents..Read the Order:.Read the entire account of today's hearing here:.Delhi High Court directs Future Retail to maintain status quo in relation to deal with Reliance [LIVE UPDATES]

Amazon vs Future: Delhi High Court prima facie finds Emergency Award enforceable, orders status quo on FRL-Reliance deal [READ ORDER]

Aditi

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