Udayavni Special

Future Retail files caveat before Delhi High Court against any early move by Amazon

PTI, Nov 3, 2020, 3:16 PM IST

New Delhi: Kishore Biyani led-Future Group has filed a caveat before the Delhi High Court requesting it to be heard if any plea is filed by e-commerce major Amazon over its Rs 24,713 crore deal with Mukesh Ambani-led RIL.

Anticipating a move by Amazon, which had got an interim arbitration award in its favour, putting the announced deal on hold, the Future Group firm has moved the Delhi High Court.

“Let no order of any kind be passed of any kind… or any other petition and application, which may be filed by the petitioners/caveatee (Amazon.com NV Investment Holdings LLC) against the respondent/caveator – Future Retail Ltd, without due notice under section 148A of the code of civil procedure,” the Future Group firm stated in its urgent caveat petition.

A caveat is filed by a litigant in high courts and in the Supreme Court to ensure that no adverse order is passed against the party without it being heard.

The Future group firm has already served a copy of the caveat petition to Amazon, it said.

“You are requested to give at least 48 hours notice before moving any petition under section 9 of the Arbitration & Conciliation Act or any other application against the proposed respondent/caveator,” the Future Group firm said while sending a copy of caveat to Amazon.

Amazon declined to comment on the development.

On October 25, Singapore International’s Arbitration Centre (SIAC) passed an interim award in favour of Amazon, with a single-judge bench of V K Rajah barring FRL from taking any step to dispose of or encumber its assets or issuing any securities to secure any funding from a restricted party.

However, on Sunday, in a regulatory filing Future Retail Ltd (FRL) said Singapore arbitrator’s interim order against its Rs 24,713 crore deal with RIL is “not binding”, any attempt to enforce it will be “resisted”.

Questioning the validity of the order, it said that order was passed in arbitration proceedings initiated by Amazon by invoking an arbitration clause in a contract to which FRL is not a party. “The EA Order is not enforceable under the provisions of the Arbitration and Conciliation Act, 1996 and is not binding on FRL. Any attempt on the part of Amazon to enforce the EA Order shall be resisted by FRL to the fullest extent available under Indian law. FRL is also in the process of taking appropriate legal action to protect its rights,” it said.

As per SIAC order, a three-member arbitration panel, with one judge each would be appointed by Future and Amazon – and a third neutral judge would preside, would decide on the issue in 90 days.

In its Sunday filing, FRL had said that it has been advised that “an Emergency Arbitrator (EA) has no legal status” under Part I of the Indian Arbitration and Conciliation Act 1996 and therefore, the proceedings are “void and Coram non‐judice”.

The EA Order having been passed by an authority without jurisdiction is a “nullity under Indian law”, it added.

Last week Amazon had written to markets regulator Sebi and stock exchanges urging them to take into consideration the Singapore arbitrator’s interim judgement.

Over allegation by Amazon that public shareholders of FRL are being misled, the Future group contended, “It is a bit rich for such an argument to be made from someone who is not even a shareholder in FRL. “Evidently, Amazon’s letter is motivated by other considerations… Amazon’s claims are a contractual dispute between Amazon and the promoters of FRL, and Amazon has already initiated arbitration for the same,” it said.

FRL said it has complied with all SEBI requirement, and “EA Order cannot and does not in any manner restrict SEBI or the stock exchanges from considering and approving the Scheme” with RIL.

“It is humbly submitted that BSE and NSE ought not to take cognizance of Amazon’s letter or the EA Order… It is submitted that SEBI and the stock exchanges should consider the Scheme independently on its merits, and as per SEBI regulations,” said FRL in the filing. On August 29, Future Group had announced merging certain companies carrying on the retail and wholesale business and the logistics and warehousing business into Future Enterprises Limited (FEL), which would be transferred to Reliance Retail Ventures Ltd (RRVL), a subsidiary of RIL.

Amazon in August last year acquired a 49 per cent stake in FCPL, the promoter entity which owns a 7.3 per cent interest in FRL that operates more than 1,500 stores across India, including grocery chain Big Bazaar.

Amazon’s investment in Future Group came with contractual rights that include a right of first refusal and a non-compete-like pact. Also, the deal came with the right to buy into their flagship, Future Retail, after a period of between 3 and 10 years.

Amazon, Reliance and Walmart Inc’s Flipkart are in a battle to gain market share in India, where millions of middle-class customers are newly adopting online purchases of food and groceries due to the COVID-19 pandemic.

The booming e-commerce market in the country will be worth USD 86 billion by 2024, according to research firm Forrester. The stakes are particularly high for Amazon, which believes India is a big growth market after shutting its online store in China last year.

The oil-to-telecom conglomerate Reliance has since September 9, sold an 8.48 per cent stake in its retail unit to investors such as Silver Lake, KKR and Mubadala for Rs 37,710 crore to expand its so-called new commerce venture, which uses neighbourhood stores for online deliveries of groceries, apparel and electronics. The firm, whose retail operations already runs close to 12,000 stores, is looking to dislodge Amazon and Flipkart, which together control about 70 per cent of the online market in India.

Udayavani is now on Telegram. Click here to join our channel and stay updated with the latest news.

Top News

26/11: Ratan Tata calls for unity, act of sensitivity to continue in future

PM says ‘One Nation, One Election’ need of India

Economic recovery stronger than expected, need to be watchful of demand sustainability: Das

Restrictions on international passenger flights extended till Dec 31

Ahmed Patel laid to rest; Rahul Gandhi attends funeral

Absolutely wrong to prevent farmers from holding peaceful demonstrations: Kejriwal

“Delhi Chalo”: Cops use tear gas shells, water cannon against protesting farmers

Related Articles More

Economic recovery stronger than expected, need to be watchful of demand sustainability: Das

Operations at PSU banks partially hit due to trade union strike

Centre approves amalgamation of Lakshmi Vilas Bank with DBS Bank India Ltd

Sensex plunges 695 pts on profit-booking; Nifty drops below 12,900

Fee on money transfers for US, doesn’t apply to India: Google Pay


Centuries-old Tuluva ritual of ‘Bhoomipuje Gaddekori’ still performed at Palthadi Village in Puttur

A bike rider dies in a lorry crash : The scene of the accident was captured on CCTV

Moodbidri: Four people drowned in Shambhavi river

1348 new vented dams in K’taka’s coastal districts: J.C. Madhu Swamy

Karavali gets introduced to Japanese ‘kokedama’ art

Latest Additions

26/11: Ratan Tata calls for unity, act of sensitivity to continue in future

Soft quarantine over, Indian team checks into new hotel on eve of first ODI

What is eVIN and how will it be used for distributing Covid-19 vaccines?

PM says ‘One Nation, One Election’ need of India

Fight against caste discrimination: K’taka to set-up govt-run salons

Thanks for visiting Udayavani

You seem to have an Ad Blocker on.
To continue reading, please turn it off or whitelist Udayavani.