SINGAPORE ARBITRATION: AMAZON WINS RELIEF AS HC STAYS FUTURE-RELIANCE DEAL

• Be N By IAS, Delhi
• 02, Feb 2021

For: GS-3: Indian Economy, E-Commerce, Arbitration

CONTEXT:

‘Order of Singapore arbitration centre enforceable in India’

The Delhi High Court on Tuesday provided interim relief to e-commerce major Amazon by directing Future Retail Limited (FRL) to maintain status quo with regard to transfer of its retail assets to Reliance Retail.

Delhi Court’s Judgement:

TWO JUDGE BENCH:

• Jurisdiction of Arbitration: Justice J.R. Midha also said he was of the prima facie view that an order of the emergency arbitrator (EA) at the Singapore International Arbitration Centre (SIAC) restraining FRL from taking any steps to transfer its retail assets was enforceable in India.
• “This court is of the prima facie view that the emergency arbitrator has rightly proceeded against respondent number 2 (FRL). The order dated October 25 is enforceable under Section 17(2) under the Arbitration and Conciliation Act, the same manner as an order of this court,” Justice Midha said in an interim order.

SINGLE JUDGE BENCH:

• On 21 December, a single-judge bench of the Delhi high court allowed the deal to go through, subject to regulatory approvals.
• The order upheld the Singapore ruling and declined Future’s plea to stop Amazon from approaching regulators to bar the Reliance-Future deal.
• The basis of the interim award of the emergency arbitrator has been superseded by the judgement dated 21 December, passed by the learned single judge, Justice Mukta Gupta.

AMAZON V. FUTURE INDUSTRIES:

• Reliance & Future Deal v. Amazon: In its petition, Amazon alleged that the ₹24,713 crore deal with Reliance Industries violates its investment agreement with Future Group.
  • It barred the company from selling its assets to Mukesh Ambani’s conglomerate among other specified entities.
• Amazon Petition: Amazon had approached the Delhi court on 25 January with a plea seeking detention of Future Group founders, including its promoter Kishore Biyani, and seizure of their assets for violating the tribunal order.
• Significant victory for Amazon: The court’s observation that the Singapore tribunal order is enforceable in India is a significant victory for the American e-commerce giant, controlled by billionaire Jeff Bezos.
• Singapore tribunal order: The tribunal passed an interim order favouring Amazon in October, barring Future Retail from taking any steps to sell or encumber its assets.
• Biyani’s Future Group: It needs to complete the deal without delay to prevent a possible bankruptcy, has been caught in the fight between two of the world’s wealthiest men.

INDIA’S RETAIL & E-COMMERCE MARKET:

• At stake is India’s retail market: At stake is control of India’s retail market, estimated to reach $1.3 trillion by 2025, amid a surge in online shopping.
• Amazon and Walmart-owned Flipkart together control over 80% of the Indian e-commerce market and have been competing to make inroads into the traditional retail market in India.

OTHER REGULATORS IN THE SCENE:

• The Competition Commission of India had approved the deal in November, and the Securities Exchange Board of India gave its conditional nod last month.
• Future Retail has already approached the National Company Law Tribunal, Mumbai, for approval of the deal.

SINGAPORE INTERNATIONAL ARBITRATION CENTRE:

• It is a not-for-profit international arbitration organisation.
• Based: In Singapore
• Function: It administers arbitrations under
  • its own rules of arbitration and
  • the United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules.

THE SINGAPORE CONVENTION ON MEDIATION

Context:

• Recently, The Singapore Convention on Mediation came into force.
• The convention will provide a more effective way of enforcing mediated settlements of corporate disputes involving
• businesses in India and other countries that are signatories to the Convention.

About the convention:

• The convention is also known as the United Nations Convention on International Settlement Agreements Resulting from Mediation.
• This is the first UN treaty to be named after Singapore.
• Singapore had worked with the UN Commission on International Trade Law, other UN member states, and nongovernmental organizations for the Convention.
• As on September 1, the Convention has 53 signatories, including India, China, and the U.S.

Source: The Hindu, Livemint

Q. Singapore international arbitration centre is a not-for-profit international arbitration organisation. It administers arbitrations under

• a) Its own rules of arbitration
• b) United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules.
• c) Both a and b
• d) None of the above

ANS: C