All eyes are now on the next steps of Kishore Biyani’s Future group after the retailer hinted it may challenge the award of the Singapore-based arbitration centre before Indian legal forums.
One of the options being speculated is that it may file an objection to the award in the country under Section 34 of the Arbitration and Conciliation Act, 1996. Amazon had won an interim award against the Rs 24,713-crore deal between Reliance Industries and the Future group after a Singapore-based single judge arbitration panel put the transaction on hold.
The global retail giant had alleged that the asset sale violated a contractual agreement.
Subsequently, Future Retail Ltd (FRL) had said that it has been legally advised that actions taken by its board, which are in full compliance of the relevant agreements and in the interest of all stakeholders, cannot be held back in arbitration proceedings initiated under an agreement to which it is not a party.
More importantly, the company added that according to the advice received by it, all relevant agreements are governed by Indian law and provisions of Indian Arbitration Act for all intents and purposes
It is felt that FRL could look at invoking Section 34 of the Arbitration and Conciliation Act, and challenge the award in an Indian court.
However, the section only pertains to the setting aside of an arbitral award and is silent on such emergency interim orders.
On the other hand, it also remains to be seen if Amazon approaches the Indian courts to enforce the award.
A CNBC TV-18 report said that one option available to the Future group is to challenge the award in Singapore for which it will have to wait for the setting up of an arbitration tribunal. However, this process could take time.
Last year, Amazon had bought a 49 per cent stake in one of Future’s unlisted firms, Future Coupons Ltd, with the right to buy into flagship FRL after a period between 3 years and 10 years. Future Coupons owns a 7.3 per cent stake in Future Retail.
In the interim order that was passed in favour of Amazon, V.K. Rajah — the sole arbitrator — had asked the Future group to put the deal on hold and said that the deal cannot go through until it finally decides the matter.
