E-commerce giant Amazon has again sent a letter to the Securities and Exchange Board of India (Sebi) informing the market regulator of the formation of the arbitration tribunal at the Singapore International Arbitration Centre (SIAC) while urging it to suspend the review of the Future Group’s $3.4 billion deal with Mukesh Ambani-owned Reliance Industries, according to sources.
The letter addressed to Sebi chairman Ajay Tyagi said that since Emergency Arbitrator of SIAC has passed an order restricting the deal between Future Retail Limited (FRL) and Reliance and the High Court has accepted justification of the emergency award (EA), any decision he takes has to be in cognisance of the same, according to sources.
“In view of the directions in the operative part of the Interim Award and the above, we request your good offices to take action by inter alia: (a) suspending review of the Impugned Transaction as well as the scheme involving the Impugned Transaction, and not granting any no-objection in relation to the same; and (b) directing the Indian Stock Exchanges not to issue any no objection/approval letter to FRL,” said the letter, seen by Business Standard.
“In case you require any further information/documents, we will be pleased to submit the same. This letter is issued without prejudice to our rights.”
The letter dated January 5, 2021, informed SEBI that the Singapore International Arbitration Centre (SIAC) has 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, 2021, 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 other agencies in India. As 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 Reliance Industries, according to sources. The other two members of the tribunal include Albert van den Berg and Jan Paulsson which were proposed by Amazon and Future respectively.
The development of the constitution of the tribunal comes at a time when the Delhi High Court in December 2020 refused to restrain Amazon from interfering in Future Retail’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 Future Retail Ltd after an Emergency Arbitrator of the SIAC restrained Future Group from taking any steps in furtherance of the transaction with Reliance Retail.
The Delhi High Court, prima facie, found that the suit filed by Future Retail was maintainable, the Emergency Award was valid, and that Future Retail'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 (Future Retail) 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 Reliance Industries Ltd (RIL). Amazon then sent a legal notice to Future, alleging the retailer’s deal breached an agreement with the American e-commerce giant.
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