Amazon asks SEBI, stock exchanges not to grant no-objection to Future Retail deal

New Delhi, Amazon has written to SEBI Chairman Ajay Tyagi informing that the regulator should not give no-objection to the Future Retail transaction with Reliance as the Singapore International Arbitration Centre (SIAC) has constituted an arbitral tribunal.

In a letter to Tyagi, Amazon.com NV Investment Holdings said, "We write to inform you that the Singapore International Arbitration Centre (SIAC) has constituted the arbitral tribunal in the arbitration proceedings initiated by Amazon against inter alia FRL, Kishore Biyani and Rakesh Biyani.

"We wish to highlight that in view of the constitution of the arbitral tribunal, the interim award passed by the EA stands automatically extended for the duration of the arbitration proceedings unless it is reconsidered/modified/vacated by the arbitral tribunal."

"We wish to highlight Rule 10, Schedule I to the rules of the SIAC, 2016 (SIAC Rules) in this regard, which provides that: 'The Emergency Arbitrator shall have no power to act after the Tribunal is constituted. The Tribunal may reconsider, modify or vacate any interim order or Award issued by the Emergency Arbitrator, including a ruling on his own jurisdiction. The Tribunal is not bound by the reasons given by the Emergency Arbitrator. Any interim order or Award issued by the Emergency Arbitrator shall, in any event, cease to be binding if the Tribunal is not constituted within 90 days of such order or Award or when the Tribunal makes a final Award or if the claim is withdrawn'," Amazon said.

Future Retail stands injuncted from proceedings with the transaction with Reliance and restrained by the award.

"We reiterate that FRL continues to be expressly injuncted and restrained by the interim award from taking any steps in furtherance of or in aid of the impugned transaction, including filing or pursuing any application before any person, including SEBI or agencies in India. As the interim award is deemed to be an order of the court and now stands automatically extended pursuant to the SIAC Rules, FRL continues to suffer from a fatal disability to pursue its application for issuance of observation letter/no-objection letter before any regulatory authority," Amazon said.

The impugned transaction as per the letter is the purported resolution dated August 29, 2020 (Impugned Board Resolution) passed by the board of directors of FRL approving the amalgamation of FRL, along with other group companies, with Future Enterprises Limited (FEL) and the subsequent transfer and vesting of the 'retail and wholesale undertaking' from FEL as a going concern on a slump sale basis to the Mukesh Dhirubhai Ambani (Reliance Industries) Group.

In view of Section 17(2) of the Arbitration and Conciliation Act, 1996, the interim award passed by the EA is deemed to be an order of a court under the Code of Civil Procedure, 1908, and continues to be in force, it said.

"We extract Section 17(2) for your convenience: '(2) Subject to any orders passed in an appeal under section 37, any order issued by the arbitral tribunal under this section shall be deemed to be an order of the court for all purposes and shall be enforceable under the Code of Civil Procedure, 1908 (5 of 1908), in the same manner as if it were an order of the Court'," it added.

It is a matter of record that no appeal under Section 37 of the Arbitration and Conciliation Act, 1996 has been filed against the interim award.

"In view of the directions in the operative part of the interim award and the above, we request your good offices to take action by inter alia: (a) suspending review of the impugned transaction as well as the scheme involving the impugned transaction, and not granting any no-objection in relation to the same; and (b) directing the Indian stock exchanges not to issue any no-objection/approval letter to FRL," Amazon said.