This article gives an overview of the Amazon.com NV Investment Holdings LLC v. Future Retail Limited case
In a significant win for web-based business behemoth Amazon, the Supreme Court
bench consisted of Justices RF Nariman and BR Gavai on Friday, 6 August 2021,
said that arbitration limiting Future Group's arrangement with Reliance
Industries was legitimate and enforceable under Indian laws. Amazon v. Future
Retail 2021 became one of the landmark judgments in the field of Arbitration
laws. There was clarity to a certain extent gained concerning the interim orders
issued by Emergency Arbitrators in arbitration centres outside of India. It also
brought the two-year-long tussle between the two giants to an end.
Background of the Amazon vs Future Retail CaseThe deal between Amazon and Future Retail
Amazon NV Investment Holdings purchased a 49% equity position in Future Coupons
Limited and the transaction was worth Rs 2000 crores. Future Coupons owned 7.3%
of Future Retail, implying that Amazon would indirectly own 3.5% of the company
as a consequence of the acquisition.
granted Amazon the right to purchase all or a portion of the assets
of marketing business Future Retail and also gained credibility because of the
same. According to the reports, the arrangement included a list of companies
with which Future Retail could not conduct business, and Reliance Retail is one
The deal between Future Retail and Reliance
Future Ventures is formed through the merger of listed firms of several
companies which includes Future Retail Ltd, Future Lifestyle Fashions Ltd,
Future Consumer Ltd, Future Supply Chain Solutions Ltd, and Future Market
The deal between the two entities was that Future Enterprises would sell its
retail, wholesale, and warehousing businesses to Reliance Retail and Fashion
In the deal, Reliance Retail and Fashion Lifestyle was to contribute Rs 1200
crore in a preferential stock offering and Rs 400 crore in Future Enterprises
Future Group was in desperate times where it had lost Rs 7000 crore in the first
few months of the pandemic and the sale of the company as a consequence of the
revenue lost during the global pandemic.
Before the arrangement could be closed, Amazon protested it, asserting that the
agreement that it had with Future Coupons, which is the advertiser firm of
Future Retail, had been breached.
Amazon also claimed that the agreement with Future Coupons had given it the
'call option' which authorised it to exercise the option of acquiring all or
part of Future Retail's shareholding in the company, within three to ten years
of the agreement and this right was disturbed by their deal.
Subsequently, Amazon resorted to taking Future Retail into emergency arbitration
before the Singapore International Arbitration Centre in October 2020.
Why did the future group sell its stake?
Credit rating agency ICRA had said that the debt of Future group's six listed
firms increased to Rs.12778 crores as of September 2019.
Future Retail has tried every way possible to avoid a loan default over the last
few months. In January, the company raised $500 million through dollar bonds. It
also pruned its fixed costs across corporate overheads, operations, people
costs, and marketing costs. Then, it shut down 177 small-format stores, which
were in a mix of new low-density clusters or bottom of the tail stores.
In addition, Biyani sold a 49% stake in Future coupons for Rs. 1500 crores to
Amazon and Samara. He has earlier sold the Pantaloons retail chain to Aditya
Birla group in 2012. A senior executive from the group said despite these
measures, the coronavirus pandemic and the overall economic slowdown have made
Kishore Biyani, Group CEO, Future Group said," As a result of this
reorganisation and transaction, Future group will achieve a holistic solution to
the challenges that have been caused by covid and the macroeconomic environment.
This transaction takes into account the interest of all its stakeholders
including lenders, shareholders, creditors, suppliers and employees giving
continuity to all its business."
Role Singapore International Arbitration Centre (SIAC)
In the SIAC, the emergency arbitrator barred Future Retail from continuing with
the deal and decided in Amazon's favor by issuing an interim injunction,
suspending the deal for 90 days but was later extended.
Delhi High Court judgement
Single Judge Bench and his decision
The Single Judge Bench confirmed the Singapore arbitrator's decision and
observed that an emergency arbitrator is an arbitrator under Section 17(1) of
the Arbitration and Conciliation Act,1996.
Division Bench's Decision
By challenging the decision of the Single Judge Bench, the Future group received
a desirable order from the Division Bench. The Division Bench overturned the
Single judge bench, Justice Midha's orders which had stayed the Future-Reliance
deal. The Division Bench issued an interim decision by recognizing that Future
Retail was not a participant in the arbitration agreement with Amazon and Future
Coupons. Therefore, allowing them to continue with the deal with Reliance.
Supreme Court's Judgement
Amazon challenged the decision of the Division Bench overturning the Single
Judge's status quo order by appealing to the Apex Court. The Supreme Court only
issued an interim order urging the NCLT (National Tribunal Council) not to
approve the acquisition deal and also allowed for the investigation of the case.
The Supreme Court had postponed the hearing date as it had to attend to more
Contentions of the parties:
Contentions of the Future Retail Ltd.
- It was contended by Ld. Counsel of the Future Retail that the Covid-19 pandemic
altogether affects Indian organisations, especially the retail area, in which
Future Retail Limited continues its business and hence the exchange among Future
Retail limited and Reliance is to safeguard the interest of the relative
multitude of partners of FRL through huge implantation of assets and obtaining
of liabilities of Future Retail Limited's business by Reliance.
- They look for an order against Amazon for unlawfully impeding the exhibition of
the exchange between FRL [Future Retail Limited] and Reliance to rebuild and
transfer a part of the Future Retail Limited business to Reliance to raise
reserves promptly expected by the between Alia to meet its obligation
instalments. Since Amazon is turning to measures that establish tortious
obstruction with legitimate agreements being entered into between Future Retail
Limited and Reliance, by endeavouring to prohibit the presentation of the
exchange, Future Retail Limited has been compelled to move toward this Court. In
spite of Amazon not being separated from the FRL SHA and Future Retail Limited
not being the party to the FCPL SHA and FCPL SSA, Amazon claims contradiction of
its authoritative privileges in light of the FCPL SHA.
- It is presently the situation of Amazon that the Future Retail Ltd shareholders
, Future Coupon Pvt. Ltd. Shareholders Agreement, and Future coupons private
limited share subscription agreement (SSA dated 22nd August 2019 executed
between Amazon, FCPL(Future coupons private limited) and persons listed in
Schedule-I being Biyanis, FCRPL, and AEFPL) establish a "Single Integrated
Bargain" to which Amazon, Future Coupon Pvt. Ltd. ,and the Promoters are all
- The stand of Amazon in view of the merge of FRL SHA (Future Retail Ltd
shareholders agreement) and FCPL SHA(Future coupons private limited share
subscription agreement) adds up to wrongdoing as it brings about the production
of command over FRL(Future Retail Ltd.) for Amazon abusing firstly the Foreign
Exchange Management (Non-Debt Instruments) Rules, 2019 (in short "FEMA FDI
Rules") as it also disregards the arrangements of the Companies Act, 2013 since
it adds up to invest in the power that lives in the Board of Directors of FRL,
in an unfamiliar organisation, even without even a trace of such arrangement in
the articles of FRL and in disgracing of the guardian obligation of the
Directors of FRL(Future Retail Ltd) including free Directors to act in light of
a legitimate concern for FRL. Further Amazon with investment in FCPL likewise
doesn't acquire if FRL loses its worth.
- Since Amazon is unlawfully disrupting the legitimate exchange between FRL(Future
Retail Limited) and Reliance by impersonating the EA(Emergency Arbitrator)
request to be an order under Section 17(2) of the A&C Act, it is also causing
unlawful resistance with the exchange and is in opposition to the business and
monetary interests of FRL. Consequently, FRL is qualified to look for a
directive against Amazon on the standards overseeing the misdeed of unlawful
- The presence of the FRL (Future Retail Ltd) before the Emergency Arbitrator was
subject to its objection with respect to the jurisdiction and the said complaint
can't be waived. As indicated by learned Senior Counsel, FRL appearance before
the Emergency Arbitrator without bias to the objection that an Emergency
Arbitrator isn't perceived under Part-1 of the A&C Act as is apparent from the
letters of FRL dated 6th October 2010 and 7th October 2020 to SIAC and the
response dated 12th October 2020. Thus Amazon‟s contention that FRL waived the
objection to the jurisdiction of the Emergency Arbitrator is false and
- Further, since the Emergency Arbitrator needs lawful status under Part-I of the
A&C Act, the parties by assent couldn't present jurisdiction on the Emergency
Arbitrator. Regardless of the way that the request for an Emergency Arbitrator
isn't perceived under Part-I of the A&C Act, Amazon has addressed the EA request
to be restricted on FRL in its letters dated 28th October 2020 and 8th November
2020 addressed to SEBI and the Stock Exchanges separately.
- The intention of the Amazon is to curtail the competition in the Indian Retail
market and it is evident from the Schedule Containing the list of "Restricted
Person" which is hampering the Transaction. If in the case that statutory
authorities are restricted from the acting on the laws and procedure established
by the Constitution of India, an irreversible prejudiced would be caused to the
FRL and no prejudiced would becaused to the Amazon because the sanction of the
arrangement by the NCLT is safeguarding the interest of the Amazon.
Contentions of the Reliance
- Reliance argued that the EA (Emergency Arbitrator) request is a nullity in law
and unequipped for implementation under Part-I of the A&C Act. The procedures
before the Emergency Arbitrator are void as it is Coram non judice(without
judgement). A plain analysis of Clause 25 of the FCPL SHA accommodating
arbitration obviously noticed that the considerable law of discretion is the
Indian Arbitration and Conciliation Act, 1996 and the SIAC Rules just recommend
the system for the intervention procedures.
- In the event of contention with Indian meaningful regulation, the provisions of
the Arbitration & Conciliation Act 1996 will win and apply mutatis mutandis. The
seat of arbitration being New Delhi, the arbitration procedures are administered
by Part-I of the Arbitration & Conciliation Act 1996. Under Part-I of the A&C
Act, an interim order must be passed under Section 9 or 17 of the Arbitration &
Conciliation Act 1996. The Emergency Arbitrator being an impermanent animal
under the SIAC Rules isn't the Arbitral Tribunal and has no jurisdiction to pass
orders under Section 17 of the Arbitration & Conciliation Act 1996.
- Under Section 17 (2) of the A&C Act, an interim order of an Arbitral Tribunal is
enforceable as a request for the Court, in any case, an interim order of an
Emergency Arbitrator under the SIAC Rules is transitory in nature and stops to
be restricting naturally on the off chance that the Arbitral Tribunal isn't
comprised inside 90 days. Further Rule 12 of the Schedule-I of the SIAC Rules
indicates to block the parties from engaging against an order for the Emergency
Arbitrator, in spite of the way that Section 37(2) (b) of the A&C Act presents
the legal right of appeal against an interim order passed by the Arbitral
Tribunal under Section 17 of the A&C Act.
- The UNCITRAL Model Law also doesn't contain any provisions pertaining to an
Emergency Arbitrator. Since India's Arbitration and Conciliation 1996 depends on
the UNCITRAL Model Law, it doesn't reflect over the arrangement of an Emergency
Arbitrator whose position of the law is insisted by the Supreme Court in the
choice revealed as Firm Ashok Traders and Anr. versus Gurumukh Das Saluja and
Contentions of the Amazon
- The Ld. Counsel for the benefit of the Amazon contended that the current suit is
the maltreatment of the course of the Court for the explanation being, FRL has
taken an interest in the arbitration procedures that initiated on 5th October
2020 and in the wake appearing before the Emergency Arbitrator recorded
different entries incorporating those brought up in the current suit. FRL keeps
on taking an interest in the arbitration procedures and has documented a
reaction to Amazon‟s notice of arbitration on 21st November 2020. In this
manner, FRL perceives that the FRL recognizes that the proper forum for raising
its objection is in the arbitration proceedings.
- In the current suit, the EA request has not been challenged and can't be tested.
In spite of the reality, there is no test to the EA orders in the current suit,
FRL and different litigants throughout contentions have made an undertaking to
show that EA request is unlawful and henceforth can't be followed upon. Without
testing the EA request, FRL tries to guarantee it to be a nullity in the current
procedures. This is impermissible as an insurance challenge can't be kept up
with under Indian Law.
- As far as Rule 12 of the SIAC Rules, the EA request is restricted to FRL and the
equivalent can be tested distinctly in fitting procedures. The EA request is a
broken measure passed by an Arbitral Tribunal under Section 17(1) of the A&C Act
and hence enforceable under Section 17(2) of the A&C Act. The EA request can't
be treated as a simple waste paper, particularly when parties have concurred
that it would be restricting on them.
Recent Apex Court Order
The Supreme Court ruled in favour of Amazon in its tussle with Future Retail
Limited. The Supreme Court held that the Emergency Award passed by the SIAC
stalling the Future Retail and Reliance deal can be held enforceable in India.
The Court has framed 2 issues to be dealt with in court. The first is whether
the Emergency arbitrator's award holds good under Section 17(1) of the
Arbitration and Conciliation Act and the second is whether the single judge's
order for upholding the order of the SIAC can be appealed.
While dealing with the first issue, the Supreme Court has approved the
enforcement of the Singapore Emergency Arbitrator award, which restrained the Rs
24,731 crore amalgamation deal between the Future Retail and Reliance Industries
Group. Further, it also upheld the order of the Single Judge Bench of the Delhi
High Court which had ruled in favour of the enforcement of the Emergency Award.
The Supreme Court observed that as per Section 37(2) of the Arbitration and
Conciliation Act, the Single judge bench order was not appealable to the
division bench of the High Court. When these provisions are coupled with there
being no bar against Emergency Arbitrator, then it can be noted that Emergency
Arbitrator's orders if covered under institutional rules would be covered by the
- Whether the Emergency arbitrator's award holds good under Section 17(1) of the
Arbitration and Conciliation Act
In this issue, Justice Nariman noted that the Arbitration Act does not consist
of any express or implied bar against the Emergency Arbitration. The Court
firstly observes the concept of full party autonomy given under Section 2(8) and
Section 19(2). Full party autonomy is given by the Arbitration Act by which they
are free to agree upon the procedure which should govern them in arbitration
proceedings. It allows for a dispute to be decided with institutional rules
which can include Emergency Arbitrators delivering interim orders. Such orders
play a major role in decongesting the civil courts and allowing speedy interim
relief to the parties. Such orders are referable and are made under Section
17(1) of the Arbitration Act. In addition to this, since the words "arbitral
proceedings" are not limited to any definition and include proceedings before an
Emergency Arbitration, they will be included in the ambit of Section 17(1).
In the present case, parties had agreed to comply with the Singapore
International Arbitration Centre Rules. Under these rules, the date of receipt
of the complete Notice of Arbitration by the Registrar of SIAC will be known to
be the date of commencement of the arbitration. Since Section 17(1) uses the
expression "during the arbitral proceedings", it is elastic enough to include
emergency arbitration proceedings which only commences after receiving the
notice of arbitration by the Registrar under the Rule of the SIAC Rules.
- Whether the single judge's order under Section 17(2) for upholding the order of
the SIAC is appealable.
In order to answer the second issue, the Court held that the orders passed for
the enforcement of interim directions under Section 17 (1) of the Arbitration
Act are not covered by the appeal provision under Section 37 of the Arbitration
Act. Since Section 37 is a complete code in itself, the Court observed that the
enforcement orders do not fall within its scope.
In addition to this, the opening words of Section 17(2) states "subject to any
orders passed in appeal under Section 37…", this demonstrates that orders that
are passed in an appeal under Section 37 are relatable only to Section 17 (1)
and not to Section 17 (2).
Hence, the Court held that no appeal lies under Section 37 of the Arbitration
Act against an order of enforcement of an Emergency Arbitrator's order.
Analysis of the Judgement & effectiveness of EA decisions going forward in the
The basic concern before the honourable Supreme Court was whether an Emergency
Arbitrator decision constituted an order for tribunal under the act and second
issue whether an order passed under section 17(2) (interim relief before the
arbitrator) of the Act for enforcement of the award by an arbitrator was
appealable or not under the act. The Supreme Court held that the award passed by
the Emergency Arbitrator was well within the definition of the arbitral tribunal
and also justified under Arbitration and Conciliation Act 1996.
The Apex Court
accentuated the importance of the party autonomy, for which arbitration is
known, incorporating the EA to solve the dispute that arises between the
parties. It also pointed out that Emergency Arbitrator has all the power vested
in an arbitral tribunal under SIAC Rules. The Supreme Court noted that
Parliament had not implemented the recommendation of the 246th Law Commission
Report in which it is being courted the implementation of the decision of the
Emergency Arbitrator in India.
However, this non-implementation of the Report of
246th Law Commission Report would not lead to an inference that EA is not
enforceable in India on an interpretation of the Act. The Supreme Court referred
to the Srikrishna Committee Report which considered that it is possible to
interpret the provision of the act so as to enforce the EA decision in India.
The Supreme Court also contended that the parties would be stopped after
agreeing to the institutional rules providing for Emergency Arbitrator provision
and participating in it, subsequently from the reasoning of non-binding of the
Emergency Clause Enforceability
A Single Judge of the Delhi High Court restrained the Future Retails Group from
implementing the impugned transaction. It was held that the EA Award was
enforceable under Section 17(1) of the Act, but later a division bench of the
Delhi High Court stayed the order of the Single Judge. Consequently, Special
Leave Petitions were filed before the Supreme Court challenging the Division
Bench order of the Delhi High Court.
The first issue dealt with by the Court was whether the EA decision constituted
an order of an " arbitral tribunal" under Section 17(1) of the Act. The Apex
Court in its judgement held that the order by the Emergency Arbitrator would be
covered under Section 17(1) of the Arbitration and Conciliation Act and that it
can be enforced under Section 17(2).
- The interim order that was passed by the Emergency Arbitrators under the rules
of a permanent arbitral institution was included within the ambit of Section
17(1), as the word "arbitral proceedings" is not restricted by any definition
and thus covers proceedings before the Emergency Arbitration including interim
awards that are passed by emergency arbitrators.
- The conjoint reading and interpretation of Section 2(6), 2(8), 19(2), and 21 of
the Arbitration Act give that the parties are free to agree on the procedure to
be followed by an arbitral tribunal in conducting its proceedings, this is the
concept on full party autonomy. The Court, by applying these sections together,
held that the Act disallows contracting parties from agreeing to a provision for
an award by an emergency arbitrator.
- Section 9(2) and Section 9(3) was introduced to decongest the court system.
Likewise, the emergency arbitrator's order would be an order which fulfils this
objective, including interim orders that are passed by emergency arbitrators.
- In addition to this Justice Nariman based his judgement on the principle of
estoppel. He held that a party would be stopped, as it had agreed to the
institutional rules providing for Emergency arbitration and also to participate
in EA proceedings. The decision of the Supreme Court was also based on reasons
of public policy. The Court observed that the EA orders play an important role
in decongesting the civil courts and providing speedy interim relief to the
- When Reliance was placed on the Law Commission Reports by Future Retail, the
Supreme Court held that merely because recommendations in a Law Commission
Report were not followed by Parliament, it would not compulsorily lead to the
conclusion that what has been omitted does not form part of a statute when
Therefore, taking into account all these reasons, the Supreme Court held that
the Emergency arbitrator's award holds good under Section 17(1) of the
Arbitration and Conciliation Act.
Almost now it's been almost 3 years since the dispute started. To summarise all
the events, a timeline is needed.
List Of Time Period And Events
||It was the month of August when Amazon came
into an agreement with Future Retail, a group of Future entities to buy
a stake of 49% worth Rs.1500. Future Coupon, another entity of the
Future promoter group, holds 7.3% of the stake in Future Retail, giving
3.58% of the stake to Amazon indirectly.
||Future Coupons received Rs.1500 crore from
|August 29, 2020
||Faced with debt, the board of future retail
approved the Future Retail and Reliance Retail deal. The deal contained
that Reliance Retail will buy Future Group's retail, wholesale, and
logistics worth Rs.24,713 crore by way of slump sales.
|October 9, 2020
||Amazon approached Singapore International
Arbitration Centre (SIAC) to look into the matter of the Future-Reliance
|October 25, 2020
||Singapore Arbitration ruled in the favour of
Amazon and barred Future-Reliance Retail by passing an interim award.
This basically means that Future Group was restricted to proceed with
the share seal deal with Reliance Retail.
|November 7, 2020
||Future Retail moved to Delhi High Court
against an American company, Amazon alleging interference.
|November 20, 2020
||Later in the month, CCI approved the Reliance
Retail- Future deal.
|December 21, 2020
||In the month of December 2020, a single-judge
bench of the Delhi High Court refused to stay on the Future- Retail deal
and upheld the FRL board resolution. It also upheld the claim of FRL
against Amazon tortious interference. But allowed Amazon to write to the
||SIAC made a panel to pass the final award on
the Future- Reliance Retail. Meanwhile here in India, Amazon filed a
petition against the Delhi High Court Order seeking the Enforcement of
SIAC Emergency Arbitrator award under section 17(1) of the Arbitration
and Conciliation Act. The Delhi High Court's division bench issued
notice to Future Retail over the plea of Amazon. Meanwhile, SEBI gave
the approval to the Future- Reliance Retail deal subject to the court
||First the single-judge bench of Delhi High
Court ruled in the favour of US-based company, Amazon and ordered it to
maintain the status quo on the Future- Reliance deal, then the Future
Retail contested it before the two-judge bench and this bench uplifted
the status quo order of the single bench. Later on, in the same month,
Amazon moved to the Supreme Court against this two-judge bench order. In
the meantime, these two companies i.e Amazon and Future Retail were
confronted in NCLT( National Company Law Tribunal) in which NCLT
reserved its order in the plea from Future Retail seeking approval of
the deal with Amazon. The Supreme Court also allowed for the hearing by
NCLT but barred it from finalising the orders. The apex court issued
notice to FRL on the plea of Amazon seeking status quo.
||A Delhi High Court single-judge bench headed
by Justice Midha passed the final order restraining FRL- Reliance deal
and said that Kishore Biyani, CEO of Future Group deliberately and with
wrong intentions disobeyed the orders and asked that assets of Kishore
Biyoni also be complied with SIAC order. However, the division bench of
the Delhi High Court stayed the order.
||Future Retail group decided to make a
resolution plan to restructure the Financial debt as per RBI's
Resolution Framework for Civil related stress.
||Since NCLT reserved the order for May month,
Future Retail moved to NCLT seeking a meeting with shareholders but
again NCLT reserved the order for a shareholder meeting.
||The Supreme Court resumed the final hearing
on the Amazon plea. Justice RF Nariman and Justice BR Gavai heard the
||The two-judge bench of the Apex Court headed
by Justice RF Nariman ruled in the favour of Amazon, upholding the SIAC
Emergency Arbitrator Award under section 17(1) of Arbitration and
Conciliation Act 1996.
||The Competition Commission of India(CCI)
suspended the approval of the 2019 deal between Amazon and Future Retail
and imposed the penalty of 200 crores citing the company's alleged
deliberate design to suppress information about the scope and purpose of
the deal. The antitrust regulator had imposed a penalty of Rs 200 crore
on Amazon to be paid within 60 days of receipt of the order. In January
2022, the Supreme Court will hear the Future group's plea against the
Delhi High Court order, which declined to stay the SIAC's EA award.
||The bench of Chief Justice of India NV Ramana,
Justice AS Bopanna, and Justice Hima Kohli remanded the whole matter to
the Delhi High Court to be considered afresh without adhering to
observations made therein.
The bench clearly declined the decision of the arbitration tribunal and
refused to intervene with the emergency award (EA) of the Singapore
The judgement of the Supreme Court has attained the title of a landmark
judgement as it has not only re-emphasized 'party autonomy as a guiding
principle of the Act but has also brought to the fore the option of 'Emergency
Arbitrations' which, concerning the judgement, are now recognized remedies for
interim relief and are enforceable under Indian law.
The result of the tussle including two of the world's most extravagant men,
Amazon's Jeff Bezos and Reliance's Mukesh Ambani, could reshape India's
pandemic-hit shopping area and choose if Amazon can dull Reliance's strength of
the country's almost trillion-dollar retail market. After the Supreme Court
decided in favour of US-based internet business goliath Amazon in the ₹24,731
crore consolidation arrangement of Future Retail Ltd (FRL) with Reliance Retail,
FRL expressed that it will practice the accessible cures in law.
Avitel Post Studioz Ltd. and Ors. v. HSBC PI Holdings (Mauritius) Ltd, 2014
SCC OnLine Bom 929.
- Amazon.com NV Investment Holdings LLC v Future Retail Limited case, LL
2021 SC 357.
- Harsh Shrivastasv, Students of Lloyd Law College, Greater Noida and
- Parul Chaudhary, Students of Lloyd Law College, Greater Noida.
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