Amazon tells Supreme Court it intends to help Future Retail

Amazon tells Supreme Court it intends to help Future Retail

It urges to consider imposing a condition for the arbitral tribunal's order to be obeyed

In the Future Retail Limited (FRL)-Amazon dispute, the American e-commerce giant has argued before the Supreme Court that FRL and Future Coupons Private Ltd (FCPL) have repeatedly violated the injunction orders passed by the Emergency Arbitrator (EA). Hence, they cannot seek relief from the court.

Appearing on behalf of Amazon, senior advocate Gopal Subramaniam argued that the process adopted by the Future Group undermined and defeated the proceedings of the arbitration. It urged the court to consider imposing a condition on the Future Group to obey the tribunal's order.

Subramanium responded to Future Group's submissions that FRL would sink with 30,000 employees losing their jobs if the deal with Reliance did not come through. He submitted that Amazon was willing to assist them with the financial issue and had maintained its stand before the EA and the Enforcement Court.

"Why would we not be interested in the survival of this entity when we have the rights under the agreement," he stated.

Earlier, a bench comprising Chief Justice of India NV Ramana, Justice AS Bopanna and Justice Hima Kohli reserved its orders in two pleas.

The EA through its 2020 order had restricted FRL from going forward with its deal with Reliance and injuncted it from taking steps in furtherance of the Scheme of Arrangement with Reliance. The arbitral tribunal constituted to hear the Future-Amazon dispute reinforced the EA's order and dismissed FRL's plea to vacate the order.

Subramanium submitted that FRL acted in breach of the interim prohibitory order passed by the EA and because of that Amazon filed an enforcement application. He added that the Supreme Court's order in August 2021 took a view that EA is a validly constituted tribunal for purpose of the Arbitration and Conciliation Act and such orders were capable of effective enforcement.

He said that regarding the directions of imposing penalties like imprisonment, Amazon was not interested in penalizing the Future Group.

He argued that the arbitral tribunal pronounced its order in October 2021, rejecting FRL's application for vacation of EA's order. Therefore, the order must be complied with.

In response to the court's suggestion that FRL's appeal against the order of the tribunal might be heard by the High Court, the advocate submitted that FRL was entitled to an appeal under the Arbitration Act and Amazon had no issue with it.

Subramanium maintained that Amazon had always wanted a resolution, but it must take place in a fair manner. FRL must obey an order and not file a suit for an anti-arbitration injunction.

The advocate added that Amazon was not seeking penal directions against the Future Group. He suggested the court could delete the penal directions in the impugned order while maintaining the effectiveness of the EA's order.

Appearing for Amazon, another senior advocate Aspi Chinoy submitted that the process adopted by the Future Group was to undermine and defeat the proceedings of the arbitration. It had disregarded the order and proceeded with the scheme. FRL filed collateral suits in the Delhi High Court stating that they were not a party to the agreement between Amazon and FCPL.

He argued that the High Court's order was only to refuse the injunction. The rest were just observations, which surely did not give them a license that they were not bound by the EA's order and flagrantly disregard it.

Earlier, in March 2021, a single-judge bench of Justice J R Midha had directed for attachment of property of Future Group and their promoters including Kishore Biyani. He also directed them to file additional affidavits indicating the details of their assets and property for violation of the emergency award.

The single-judge bench had also imposed a fine of Rs.20 lakhs on FRL for raising an untenable plea of nullity against the award. The court directed the fine to be deposited in the Prime Minister Cares Fund (for Covid) to be used for the vaccination of senior citizens belonging to the below poverty line (BPL) group.