Amazon-Future Disputes: Delhi High Court Adjourns Hearing To February 11; Seeks Clarity On Inter-Connectedness Of Matters

The Delhi High Court on Tuesday adjourned hearing in a bunch of pleas pertaining to disputes between Amazon and Future Group, over the latter's deal with Reliance Retail.Stating that the matter has gone back and forth making the case complex, Justice C. Hari Shankar asked both the parties to file short submissions. The Court also sought the parties to identify the priority of the issues involved."A short note not exceeding 4 pages explaining the controversy in the matter and the inter-connectedness therewith to be furnished by the parties on the next date," the Bench ordered while fixing the case for hearing on February 11.The Court was hearing a petition filed by Amazon Wholesale India Pvt. Ltd., challenging the jurisdiction of the Directorate of Enforcement to investigate matters beyond the scope of powers prescribed under the Foreign Exchange Management Act (FEMA).The dispute involves Amazon Wholesale India Pvt. Ltd, Amazon.com NV Investment Holdings LLC, Future Coupons Private Limited, Future Retail Ltd. and the Enforcement Directorate of India. Last week, the Supreme Court had directed the High Court to hear the matter afresh, on merits. It had also set aside two High Court orders directing initiation of coercive steps against Future group for alleged violation of the Emergency Award passed by the Singapore Tribunal on the application filed Amazon. Calling it a fishing and roving investigation, Amazon had claimed that ED had issued various summons to its employees for a transaction that is entirely unconnected. It was further stated that the ED had sought the legal advice and privileged legal opinions that have been received from time to time by Indian subsidiaries of Amazon.com, Inc in India. Referring to the dispute between Amazon NV and Future Group, the plea stated that a directive was received by Amazon India from the ED seeking information about the Arbitration and matters which were already being investigated by the Bangalore Regional Office of ED. The petitioner's case is that 10 out of the 16 documents sought in the directive pertained to the transaction with the Future Group and Amazon NV and not Amazon India and Amazon Seller Services Private Limited. Accordingly, it was submitted that the said directive was addressed to and received by Amazon India, who had nothing to do, directly or indirectly, with the Future Group or Amazon NV's investment in the Future Group. "As stated in the summons, while the investigation relates only to the the "Future Group," the ED is seeking data regarding legal fees spent in the past 10 years from a number of entities not connected with the Future transaction. In this regard, it may be noted that the Future Group transaction with Amazon NV only took place in 2019. These questions raised along with other documents sought by ED point towards a fishing and roving inquiry," the plea reads. Accordingly, the plea prays for canceling the Directive dated February 19 2021 and all other proceedings commenced by ED in the matter. It also prayed for directions on ED not to conduct a fishing and roving inquiry in matters covered by legal privilege and seek information falling outside the purview of FEMA. Connected Cases Details: 1. FUTURE COUPONS PRIVATE LIMITED & ORS. V. AMAZON.COM NV INVESTMENT HOLDINGS LLC & ANR; ARB. A. (COMM.) 63/2021 2. FUTURE RETAIL LTD V. AMAZON.COM NV INVESTMENT HOLDINGS LLC & ORS; ARB. A. (COMM.) 64/2021 3. AMAZON.COM NV INVESTMENT HOLDINGS LLC V. FUTURE COUPONS PRIVATE LIMITED & ORS.; OMP (ENF.) (COMM.) 17/2021 4. AMAZON WHOLESALE INDIA PVT LTD & ANR. V. THE DIRECTORATE OF ENFORCEMENT & ORS.; W.P.(C) 14967/2021 Coram: Justice C. Hari Singh

Amazon-Future Disputes: Delhi High Court Adjourns Hearing To February 11; Seeks Clarity On Inter-Connectedness Of Matters

Prateek Chakraverty

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