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Biyanis Induced Amazon Into Deal With Future Retail; They Are Bound By Arbitration : Amazon In Supreme Court

Srishti Ojha
22 July 2021 3:44 PM GMT
Biyanis Induced Amazon Into Deal With Future Retail; They Are Bound By Arbitration : Amazon In Supreme Court
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Amazon through its Counsel Senior Advocate Aspi Chinoy on Thursday submitted before the Supreme Court that even though Amazon- Reliance- FRL dispute seems to play out as one of Corporate entities, the promoters of FRL Kishore and Rakesh Biyani are the focus of the matter, being both the driving force of transaction initially and its breach subsequently.

"In the clash of corporates one must not loose sight of real dramatis personae who determined both contractual rights and contractual breeches as that's where really the driving force comes from." Mr Chinoy said.

A Bench headed by Justice Rohinton F. Nariman was hearing Amazon's challenge to an order dated March 22 passed by a Division Bench of the Delhi High Court staying a Single-Judge order which had upheld the Emergency Award passed by a Singapore Tribunal halting the Reliance-Future deal worth Rs. 24,713 crores.

"It was the Biyanis who negotiated and induced Amazon to enter into these multiple agreements. It's not as if they are not part of the scene. They are parties to both SHA" Chinoy said.

Chinoy submitted that the Biyanis, including Mr Kishore Biyani, Executive Chairman and group CEO of FRL and Mr Rakesh Biyani, Managing Director of FRL gave solemn covenance in both agreements that they'll ensure compliance and ensure by their votes that nothing contrary would be allowed to be done as to what was in these documents. It was on that basis that these series of documents were entered into and Amazon 1,430 crores into FCPL which immediately and contractually went to FRL.

"Interestingly, enough after covenanting that they will ensure compliance they deliberately and wilfully proceeded to breach their obligations. They are clearly bound by arbitration agreement." Chinoy argued

He further submitted that right through the proceedings before Emergency Arbitrator, in the enforcement court, at all stages they refused to be drawn into any defence on merits. Instead of that, the Biyanis advanced hair splitting arguments on legality, that they are only 2 on the Board of 7 or they can't have control on what FRL did.

"There is dishonest and commercial immorality in this case. You induce People to enter into agreement showing you are promoters in control. And you join in those agreements covenanting that you'll ensure compliance. You drive a breach of those agreements. When it comes to the EA, You plead I'm only an individual Director and shareholder how do I control these companies and I can't to anything in the matter" Chinoy said.

Chinoy submitted that the record before the top court establishes that action of Biyanis is clearly wilful and mala fide, their breach is ex facie. Their only answer is tenuous and untenable distancing from company on basis of corporate personality.

Chinoy further said "I'd request lordships to resolve the epiphany which has struck the Biyanis at later stage of their contractual conduct and resolutely establish that such behaviour can't be heard to totally stultify Arbitral process by these grounds of EA not being contemplated or contrary to the Act".

Read the rebuttal arguments of FRL here.

WHAT HAS HAPPENED TILL NOW?


Amazon has moved the Supreme Court challenging an order dated March 22 passed by a Division Bench of the Delhi High Court staying a single-judge order which had directed upheld the Emergency Award passed by a Singapore Tribunal halting the Reliance-Future deal.

On April 19, the Supreme Court said that it will stay the proceedings in the High Court and will hear the matter.

A Single-Judge Bench of Justice Midha of the Delhi High Court had earlier allowed the Application field by Amazon to enforce the emergency award against the Future-Reliance deal.

The Judge had held that the Emergency Arbitrator is an arbitrator for all the intents and purposes under Section 17(1) of Arbitration and Conciliation Act and an order passed by such an emergency arbitrator is enforceable under Section 17 (2) of the Act.

It was also held that the Respondent Future Group has raised a vague plea of nullity without substantiating the same. Moreover, the Court went ahead to state that the Petitioner's (Amazon.com) investment does not violate any law. In view of this, the Court rejected the contentions of the Future Retail Group with a cost of Rs. 20 lakhs to be deposited in PM Cares Fund of COVID-19 to be used for vaccination of senior citizens belonging to the Below Poverty Line group. The Court ordered the same to be deposited within 2 weeks and the same shall be put on record within 1 week thereafter.

On March 22, a Division Bench comprising Chief Justice DN Patel and Justice Jasmeet Singh stayed the single bench order on appeal by Future Group.

Amazon had earlier moved the Supreme Court against an interim order of the Delhi High Court Division Bench which had stayed the status quo ordered by the single bench in December last year on Future-Reliance deal.

In that case, a Bench headed by Justice RF Nariman of Supreme Court had barred the NCLT from sanctioning scheme of merger of Reliance-Future companies, while allowing the continuation of the proceedings before the Tribunal.






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