Amazon, Future agree to SC call for out-of-court settlement

The Supreme Court has asked Amazon and Future Retail to work out a “gentleman’s understanding” in their ongoing legal dispute over the ownership of Future Retail. During the hearing, Amazon called for withholding of orders in proceedings to initiate an informal dialogue, while Future objected to the plea as the discussions will take time. At the end, both parties agreed to hold out-of-court negotiations to end their disagreement.

The CJI bench of the court has adjourned the matter for 10 days, and will pass orders if the parties fail to reach a solution. The matter is to be listed next on March 15.

The development came as the three-judge bench, led by chief justice of India N.V. Ramana and comprising justices A.S. Bopanna and Hima Kohli, was hearing Amazon’s challenge to the Delhi High Court order staying proceedings before an arbitration tribunal in Singapore regarding its 2019 deal with Future Coupon. The U.S.-based retail giant had disputed the sale of Future Retail to Reliance Industries on the basis of this deal, before it was nullified by the Indian competition watchdog.

Senior advocate Gopal Subramanium, appearing for Amazon, requested for the arbitration process to continue, or “at least have a conversation” between the two parties.

In response, senior counsel Harish Salve, representing Future Retail, retorted, “What stops Amazon to call Mr Kishore Biyani and discuss. Let me assure you no one is winning in this battle. Amazon God has to come to the ground and speak to lesser mortals like us.”

Salve then suggested that the involved parties are three large business houses – Amazon, Future Group and Reliance Industries – and will not need a mediator for holding discussions on the tiff, which has put the Kishore Biyani-led conglomerate in a financially precarious position.

After hearing both sides, CJI Ramana noted, “We will simply adjourn the matter for 10 days and we don’t say anything on record. Meanwhile, work out by gentleman’s understanding. It will be better in the interest of business. If you can find out some solution, tell us, or we will hear and pass orders.”

In the meantime, the CJI ruled, Delhi High Court and National Company Law Appellate Tribunal will not pass orders in the matter. Proceedings where CCI is challenged can proceed, he further said.

A tribunal of the Singapore International Arbitration Centre (SIAC) has been hearing Amazon’s case against Future Group, related to their deal involving Future Coupons in 2019. The tribunal had passed an interim order halting the sale of Future Retail assets to Reliance Retail. Future Retail has Future Coupons as a stakeholder, and on this basis, Amazon claims first refusal rights for acquisition of its assets.

Future Retail had pleaded before the tribunal that continuing arbitration proceedings would be illegal since Competition Commission of India (CCI) has suspended its clearance for the 2019 deal. The fair-trade regulator had ruled that Amazon withheld its intentions to acquire stake in Future Retail while signing the deal with Future Coupons. It had also imposed a ₹202 crore penalty on Amazon. The order is under challenge in NCLAT.

After the tribunal refused to consider the request, Future had moved Delhi High Court. A divisional bench of the high court had stayed the arbitration proceedings between Amazon and Future, as well as the order of the single-judge bench which refused to intervene in the matter and dismissed the pleas by two subsidiaries of the latter company. Amazon had then moved the Supreme Court against this order.