Delhi HC stays Future-Reliance deal

What is the News?

Delhi High Court has provided interim relief to e-commerce major Amazon. It directed Future Retail Limited(FRL) to maintain the status quo with regard to the transfer of its retail assets to Reliance Retail.

What are the issues in the Future-Reliance deal?

1. What is the Future-Reliance deal? In 2020, Biyani’s Future Group has entered into an agreement with Reliance Retail. Under this deal, Future was to sell its retail, wholesale, logistics and warehousing to Reliance.
2. Why has Amazon objected to the deal? In 2019, Amazon had acquired a stake in Future Coupons in an agreement. As per Amazon, under this agreement, it has the first right of refusal in any stake sale in future retail.
3. Why did Amazon approach Singapore International Arbitration Centre(SIAC)? Amazon and Future Group have under their agreement agreed to refer their disputes to SIAC. Hence, Amazon approached SIAC to appoint an emergency arbitrator to get urgent interim relief.
4. SIAC ruling: SIAC emergency arbitrator had ruled in Amazon’s favour. It put the Future-Reliance deal on hold.

What is the issue now?

1. Enforcement of Ruling: Currently under Indian law, there is no mechanism for the enforcement of the orders of the Emergency Arbitrator. However, a party can move the Indian High Court under Arbitration & Conciliation Act,1996 to get similar reliefs as granted by the Emergency Arbitrator.
2. What has the Delhi High Court said? It ruled that the order of the SIAC was enforceable in India the same manner as an order of this court. This provision is covered under Section 17(2) of Arbitration and Conciliation Act.

Source: The Hindu