Citing CCI's Order on Amazon, Future Retail Moves HC To Declare Arbitration Proceedings Illegal
IANS 03 January 2022
In a new development in the Future Retail and Amazon legal battle, Future has moved the Delhi High Court (HC) seeking a direction to declare the ongoing arbitration proceedings by a Singapore panel with Amazon as illegal. In December last year, the Competition Commission of India (CCI) had imposed a penalty of Rs202 crore on Amazon and suspended its approval for the e-tailer's deal with Future Coupons, seeking more information.
Future has cited this CCI's order and argued the 2019 deal, which Amazon used to assert its rights over Future, has been suspended. Citing this deal, Amazon has blocked Future's attempt to sell retail assets to a rival, alleging breach of certain contracts. According to a source familiar with the development, Future's plea has been filed in the HC and counsel are trying to list the matter for an early hearing this week. Both, Amazon and Future Retail, are fighting cases to either enforce or overrule certain decisions taken by the arbitrator.
In December, CCI said that Amazon ought to have notified the combination and Future Retail (FRL) shareholding agreement for the purpose of acquisition of strategic rights over FRL through FCPL shareholders' agreement (SHA); and commercial agreements between Amazon and Future groups, for the purpose of establishing strategic alignment and partnership between Amazon group and FRL as well as have a 'foot-in-the-door' in the India retail sector.
In the latest filing, Future Retail contended that the 2019 deal could not get the CCI's approval, therefore it has no legal existence in the country, and the continuation of the entire arbitration proceedings is a perpetuation of illegality.
Amazon failed to notify FRL SHA and the commercial arrangements, as part of the combination between the parties, and suppressed the actual purpose and particulars of the combination, as discussed above, in contravention of the obligation contained in sub-section (2) of Section 6 of the Companies Act read with Regulation 5 and sub-regulations (4) and (5) of Regulation 9 of the Combination Regulations, the CCI said.
The CCI's order further added that, given that the combination is between players who are known in the online marketplace and offline retailing, and they have contemplated strategic alignment between their businesses, the Commission considers it necessary to examine the combination afresh based on a notice to be given with true, correct and complete information, as required therein.
On 9th September , the Supreme Court had stayed all proceedings before the Delhi High Court on Amazon's petition seeking enforcement of Singapore emergency arbitrator's (EA) award, which restrained the Future group from going ahead with its Rs24,731-crore merger with Reliance Retail.
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5 months ago
it is clear Future is playing regulatory games
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