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Current Affairs

Supreme Court decision on Future Retail Vs Amazon

Date: 09 August 2021 Tags: Miscellaneous

Issue

The Future Group’s deal with Reliance Industries Limited has been put on hold by the Supreme Court of India by upholding decision of Singapore International Arbitration Centre.

 

Background

Amazon India had approached the Singapore International Arbitration Centre regarding selling of stakes of Future Group’s retail to Reliance Industries.

 

Details

  • The retail and wholesale business of the supermarket chain Big Bazaar was sold by Future Retail to reliance Industries through slump sale.

  • Amazon had opposed the deal citing a contract it had with Future Coupons, the promoter of Future Retail.

  • The deal had also given Amazon a call option to buy all stakes of Future Retail’s shareholding company in next 3 to 10 years.

  • After Future group declined to abort its deal with Reliance, Amazon approached Singapore International Arbitration Centre, which gave a stay.

 

The Supreme Court decision

  • Supreme Court tried to answer two questions. First, whether the Singapore International Arbitration Centre (SIAC) has authority to adjudicate in the matter under the Arbitration Act. 

  • The second was, whether the appeal filed by Future group in Division Bench of Delhi High court could be maintained.

  • The Court said that arbitration by SIAC was valid as it would decongest courts from company disputes and issues.

  • The court also said that judgment of single bench could not be appealed in Division Bench under Section 37(2) of the Arbitration Act.

 

Consequences

The upholding of SIAC would mean that Future-Reliance deal will end. It will now be upto Future Coupons and Amazon to resolve the dispute.