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Delhi High Court Issues Notice On Amazon's Plea Against FRL - Reliance Rs. 25000 Cr Stake Sale
Shreya Agarwal
29 Jan 2021 3:33 PM GMT
The Delhi High Court today issued notice on Amazon's plea seeking interim injunction against Future Retail Ltd (FRL) and Reliance Industries Ltd's deal worth nearly Rs. 25000 crores. Refusing to grant any interim relief to Amazon at this stage, the court has listed the case for further arguments on Monday. Seeking clarity on the factual position of all parties involved, the bench of Justice...
The Delhi High Court today issued notice on Amazon's plea seeking interim injunction against Future Retail Ltd (FRL) and Reliance Industries Ltd's deal worth nearly Rs. 25000 crores. Refusing to grant any interim relief to Amazon at this stage, the court has listed the case for further arguments on Monday. Seeking clarity on the factual position of all parties involved, the bench of Justice Midha has also directed the parties to submit a note on their factual positions by tomorrow afternoon.
The hearing began with Sr. Adv. Darius Khambata, appearing for FRL, reiterating his previous submission that even under the SIAC Rules, which govern the arbitration agreement between the parties, the Emergency Arbitrator is not the tribunal; and further submitted that the Single Judge Bench order of Justice Mukta Gupta too, has not held anywhere that the Emergency Arbitrator's award it to be treated as an order under Section 17 of the Arbitration and Conciliation Act.
The section, which was the fulcrum around which the hearing today revolved, reads as:
"17. Interim measures ordered by arbitral tribunal.—
(1) Unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a party, order a party to take any interim measure of protection as the arbitral tribunal may consider necessary in respect of the subject-matter of the dispute.
(2) The arbitral tribunal may require a party to provide appropriate security in connection with a measure ordered under sub-section (1)."
Khambata pressed vehemently, that the award by the Emergency Arbitrator did not qualify as an interim order under Section 17 of the Act.
He further argued that, While Justice Gupta had held that the Emergency Arbitrator was not a coram non judice but his order had not been held to be under Section 17 but infact under Section 9 of the Act, which provides for permitted interim measures which "a party may, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with section 36, apply to a court," for.
"My learned friend may repeat ad nauseum that everything has been argued and settled but nowhere is it said that the Emergency Arbitrator's order is under S.17," he said.
He further stated that the mere fact that there is a rule under an Indian institution providing for Emergency Arbitrators doesn't mean that the Emergency Arbitrator in the present case ipso facto becomes an arbitral tribunal whose award is recognized as an order under S.17 and said that even when an arbitral tribunal has passed an award, one has to either file a suit or come under S.9 for enforcement.
He said it was the first time that someone was trying to enforce an EA's award directly. Referring to Justice Gupta's order he highlighted that she had already noted in her order, that the EA process was an alternative to Section 9, and not covered under Section 17.
Alleging Amazon of having a "dog in the manger" approach, the Khambata said that Amazon had merely come here desperately now, as it was aware that FRL had approached the NCLT for an approval, and Amazon knew it would go through.
Adding on to Khambata's stand, Sr. Adv. Harish Salve for FRL stated that, "If an interim relief is refused by an Emergency Arbitrator, one has to go under Section 9 of the Act and not Section 17.
He argued that the Emergency Arbitrator, as the name suggested, was "only for a quick fire solution," and that "S.17(2) has come now, but in the old S.17, the tribunal always had the power to grant interim relief."
Propositioning that the Emergency Arbitrator had the same status as under the old Section 17 of the Act, wherein if the tribunal had given an interim order under S.17(1) but the party refused to obey it, the relief lay under Section 9, Salve pressed that the Emergency Arbitrator's status was similar to that in the "old Section 17", whereas an order by a regular Arbitral Tribunal is considered an order under the existing Section 17.
Salve continued that when India opened, there was a reason why multi-brand retail investment was not allowed, because it would affect the common shopkeeper.
"Today if Marks & Spencer wants to come, they can, but if a giant like Walmart wants to come, they can't, because the giants will end up leading to local shopkeepers closing shop."
He stated that Amazon had no right in FRL and that as held by the Single Judge, the FRL - FCPL agreement and the FCPL - Amazon agreement can't be read together, so there is no arbitration agreement also.
"They went to a Division Bench, which didn't grant them a stay. Now they have come to your Lordship, seeking enforcement under Section 17", this, he said was a complete abuse of process.
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