If Amazon Wins, It Will Get Rs 1400 Crores, But 26,000 Employees Of Future Retail Might Lose Jobs : Salve In Supreme Court

"This matter is about 1,400 crores invested by Amazon versus 26,000 employees losing their jobs and 8-10,000 crores of banks going bust. If Amazon wins, it will get its 1,400 crores, but one of our terms with Reliance is that not even a single employee will lose his job and the banks will be paid", Senior Advocate Harish Salve, for Future Retail, told the Supreme Court on Tuesday.The Bench of Justices Rohinton Nariman and B. R. Gavai 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. Amazon contends that it had invested Rs.1431 Crore in Future Coupons based on certain special, material protective/negative rights available to FCPL in FRL (namely, that the Retail Assets of FRL would not be alienated without Amazon's prior written consent, and never to a Restricted Person, and that FRL would remain the sole vehicle for conduct of its retail business), and the entire investment was invested by FCPL into FRL.Mr. Salve took the bench through the aforesaid order of the Single Judge, Justice J. S. Midha,arguing how it was erroneous in law."When I am saying that the order of the Emergency Arbitrator is null and void for two reasons – one, that there is no notion of any emergency arbitrator under Indian law, and two, that there is no arbitration agreement in any case between Amazon and myself, the executing court cannot blindly say because the Emergency Arbitrator has said something, I will execute it! The Single Judge heard all our arguments and then says you have not argued nullity?! This is what happens when we rush execution! It should be expeditious, but not at others' cost!", advanced the Senior Advocate.Mr. Salve indicated the decision of another Single Bench, Justice Mukta Gupta, of the Delhi High Court in a suit filed by FRL on the ground that Amazon was interfering with a lawful transaction between FRL and Mukesh Dhirubhai Ambani group, where FRL also sought interim relief seeking to restrain Amazon from writing to regulators. He advanced that it has been his client's case all along that they have no privity of contract, forget arbitration agreement, with Amazon. "Amazon did not tell then what they are telling the court today that I paid 1400 crores basically to prevent the Biyanis (promoters of FRL) from doing business. You can't pay money to block a company! But we argued before the Single Judge and the suit was that I have no contract with you. I have a contract with FCPL under which, for certain transactions, I need their written consent, which I have obtained! And Amazon is representing before statutory authorities like the CCI, SEBI that I am acting in breach of the contract? Amazon trying to prevent my entering into an agreement with Reliance suffered from a tort of unlawful interference! The Single Judge took the view that it cannot be said that the order of the emergency arbitrator is void, but opined that prima facie, in making those representations, Amazon was indeed acting in breach, but said that on the balance of convenience, I will not grant injunction. The Single Judge asked us to make a representation and to file replies and let the authorities decide. That order continues to be in force!"He continued to advance that section 16 of the 1996 Arbitration Act provides that once the arbitrator decides that it has the jurisdiction, the respondent who challenges that has 2 options- he can join proceedings and fight the case and then take to section 34(1) of the Act for setting aside the award on the ground that there was no jurisdiction, or he can stay outside the arbitration. "When the award comes for execution, surely I can argue before the Indian court that it was without jurisdiction. I cannot argue that the Emergency Arbitrator's order is wrong, that the finding that I have breached the contract is wrong, I cannot argue on the construction of the contract, I cannot argue on the relief granted, but what I can say is that this order is not worth the paper it is written on! This is a plea which is always open in execution!", argued Mr. Salve.He submitted that he had assisted Justice Midha on the provisions of the Arbitration Act and a lot of time was spent on arguing that an EA is not a tribunal as recognised in the Act, but the fundamental point of section 17(2) of the Act not being applicable to the EA was ignored.Further, Mr. Salve indicated that Amazon had initiated the arbitration proceedings on the basis of the arbitration agreement contained in Clause 25.2.1 of the 'FCPL-Shareholders Agreement' which provides for resolution of disputes between the parties according to the Rules of Singapore International Arbitration Centre (SIAC). Clause 25.1 provides that the agreement shall be governed by and construed in accordance with Laws of India. "My submission before Justice Midha was...

If Amazon Wins, It Will Get Rs 1400 Crores, But 26,000 Employees Of Future Retail Might Lose Jobs : Salve In Supreme Court

Mehal Jain

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