23 Feb 2022 6:59 AM GMT
The Supreme Court on Friday adjourned to next week Amazon's challenge to Delhi High Court's stay on the Singapore arbitration proceedings against Future Group, to await the outcome of the appeal filed by Amazon in the National Company Law Tribunal against the Competition Commission of India revoking its sanction for the deal with Future Retail.The Court adjourned the hearing on being told...
The Supreme Court on Friday adjourned to next week Amazon's challenge to Delhi High Court's stay on the Singapore arbitration proceedings against Future Group, to await the outcome of the appeal filed by Amazon in the National Company Law Tribunal against the Competition Commission of India revoking its sanction for the deal with Future Retail.
The Court adjourned the hearing on being told that the NCLAT is hearing the appeal day after tomorrow and that the High Court's stay order was based on the CCI's action.
"The present SLP is in one way connected to the outcome of the order challenged before the NCLAT. We direct parties to request NCLAT to decide the case. List on March 9", the bench led by the Chief Justice of India said in the order.
The bench comprising CJI NV Ramana, Justice AS Bopanna and Hima Kohli was hearing a special leave petition filed by Amazon against Delhi High Court's order staying further arbitration proceedings before the Singapore Tribunal against Future Group.
The Bench had earlier issued notice to respondents Future Retail Ltd and Future Coupons Private Ltd.
Arguments in court today
Senior Advocate Gopal Subramanium, appearing for Amazon, submitted that the High Court's order has been passed in a "non-maintainable appeal". He argued that the single bench's order was passed in exercise of Article 227 of the Constitution and hence an intra-court appeal before division bench was not maintainable. He pointed out that Future Retail Ltd had approached the High Court seeking a direction that the Singapore Tribunal must hear its plea to terminate the proceedings first before final hearing on merits. When the single bench refused relief, they approached the division bench. Subramanium argued that the appeal before the division bench was not maintainable.
The senior counsel further emphasised that the settled principle is that the objections to the jurisdiction should be raised before the Tribunal, including the issues relating to invalidity of the agreement. He referred to Section 16 of the Arbitration and Conciliation Act, which gives Tribunal competence to rule on its jurisdiction. Reference was made to the Supreme Court judgment in Vidya Drolia case.
The senior counsel pointed out that the division bench stayed the proceedings by saying that the Competition Commission of India has revoked approval for Amazon- Future deal. The appeal against the CCI order is pending before the National Company Law Appellate Tribunal.
He urged that staying an international arbitration proceedings is extremely rare.
"It is after 29 years that an international arbitration proceedings have been suspended. My lord the Chief Justice has said on many occasions that best practices of arbitration internationally is embedded in Indian system. So to suspend this proceeding now will render a blow to this policy", he submitted.
Senior Advocate Ranjit Kumar, supplementing Subramanium, submitted that having decided to approach the Tribunal with a termination application under Section 32(c) of the Arbitration Act, Future Group cannot take recourse to writ proceedings.
The bench asked why can't this point be raised in the pending appeal before the division bench.
Agreement unenforceable after revocation of CCI approval : FCPL
Senior Advocate Mukul Rohatgi, appearing for Future Coupons Private Ltd, argued that after the CCI revoking the approval for the Amazon's deal on the grounds of future and misrepresentation, the agreement, which contains the arbitration clause, can't be enforced. Senior Advocate Harish Salve, appearing for Future Retail Ltd, supported the arguments of Rohatgi.
On being informed that the appeal in the NCLAT is listed day after tomorrow, the bench suggested that it can keep the present SLP pending to await the outcome of the NCLAT proceedings.
The impunged order of the division bench also stayed the Single Judge order which had dismissed Future Group's plea challenging the two orders passed by the Singapore Arbitration Tribunal which deferred the hearing in Future's plea seeking termination of the arbitration proceedings instituted by Amazon.
The High Court had also issued notice on the two appeals filed by Future Retail Ltd. and Future Coupons Pvt. Ltd. impugning the said Single Judge order and made it returnable on February 1, 2022.
Before the High Court, Future Group in its plea had placed reliance on an order passed by the Competition Commission of India on December 17, 2021, which had kept the approval granted for Amazon's deal with Future Group in abeyance.
Before the Supreme Court, Amazon has argued that the impugned interim order injuncting an ongoing international commercial arbitration seated in New Delhi under SIAC Rules presided over by a distinguished Arbitral Tribunal and involving parties and experts from across the world is strikingly contrary to the provisions, intent and purpose of the Arbitration and Conciliation Act which emphasises party autonomy and minimum judicial interference.
Amazon has submitted before Supreme Court that the sole reason given in the Impugned Interim Common Order is certain observations made in the CCI Order. Further, the CCI Order itself was a subject matter of consideration before the Arbitral Tribunal in the Termination Applications, to which replies had already been filed and the matter was scheduled for hearing on 07.01.2022 and 08.01.2022. In any event, the CCI Order is subject to an appeal before the National Company Law Appellate Tribunal, New Delhi, which is being pursued by the Petitioner.
According to Amazon, the observation of the Division Bench that the Termination Applications should have been taken up on priority and before recording evidence is a direct interference in the procedural autonomy of the Arbitral Tribunal and wholly uncalled for, given that the said Termination Applications were listed for hearing just two days later, on 07.01.2022.
Amazon has stated that though , in the Impugned order, lip service has been paid to the requirement of balance of convenience and irreparable injury, both were overwhelmingly in favour of continuance of the Arbitration Proceedings, which were fixed and ongoing.
On receipt of the CCI order, an application was moved before the Singapore Tribunal seeking closure of arbitration proceedings stating that any assertion of contractual rights against Future Group by Amazon would be in direct contravention of the CCI order.
Single Judge's Observations
The Court was of the view that just because the hearing of the termination application was scheduled for a date after the hearing of the expert witnesses, it did not mean that the Arbitral Tribunal was not willing to consider the said applications on merits or was discounting the merits of the said applications.
The Court further noted that prima facie, there was nothing to suggest that the Arbitral Tribunal denied equal opportunity to the parties or that the Arbitral Tribunal was not accommodating towards requests made by the Future Group.
Case Title: Amazon.com NV InvestmentHoldings LLC vs Future Coupons Private Limited & Ors, Amazon.com NV Investment Holdings LLC vs Future Retail Ltd & Ors
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