New Delhi: Kishore Biyani-led Future Retail Ltd said Sunday that Singapore arbitrator’s interim order against its Rs 24,713 crore deal with Mukesh Ambani – led RIL is ‘not binding’. Any attempt to enforce the interim order it will be ‘resisted’.
Future Retail Ltd (FRL), in a regulatory filing, noted that as an alternative to its claim and injunctive reliefs against the scheme, Amazon has sought Rs 1,431 crore damages along with interest, the amount invested by the US e-commerce major into Future Coupons Pvt Ltd (FCPL).
“If such claim is approved by the Arbitration or at any other judicial forum, the same would be payable by Promoters and there would not be any financial impact on the company (FRL),” FRL said in a six-page long regulatory filing.
Questioning the validity of the order, FRL said that the order was passed in arbitration proceedings initiated by Amazon by invoking an arbitration clause in a contract to which FRL is not a party.
“The EA Order is not enforceable under the provisions of the Arbitration and Conciliation Act, 1996 and is not binding on FRL. Any attempt on the part of Amazon to enforce the EA Order shall be resisted by FRL to the fullest extent available under Indian law. FRL is also in the process of taking appropriate legal action to protect its rights,” the company said.
Emails sent to Amazon remained unanswered till the filing of the story.
The Singapore International’s Arbitration Centre (SIAC) had passed October 25 an interim award in favour of Amazon, with a single-judge bench of VK Rajah barring FRL from taking any step to dispose of or encumber its assets or issuing any securities to secure any funding from a restricted party.
As per the order, a three-member arbitration panel, with one judge each would be appointed by Future and Amazon – and a third neutral judge would preside, would decide on the issue in 90 days.
In its Sunday filing, FRL said that it has been advised that ‘an Emergency Arbitrator (EA) has no legal status’ under Part I of the Indian Arbitration and Conciliation Act 1996 and therefore, the proceedings are ‘void and Coram non-judice’. It said the EA Order having been passed by an authority without jurisdiction is a ‘nullity under Indian law’.
Last week Amazon had written to markets regulator Sebi and stock exchanges urging them to take into consideration the Singapore arbitrator’s interim judgement.
Over allegation by Amazon that public shareholders of FRL are being misled, the Future group contended that ‘it is a bit rich for such an argument to be made from someone who is not even a shareholder in FRL’.
“Evidently, Amazon’s letter is motivated by other considerations… Amazon’s claims are a contractual dispute between Amazon and the promoters of FRL, and Amazon has already initiated arbitration for the same,” FRL said.
FRL said it has complied with all SEBI requirement, and ‘EA Ordercannot and does not in any manner restrict SEBI or the stock exchanges from considering and approving the Scheme’ with RIL.
“It is humbly submitted that BSE and NSE ought not to take cognizance of Amazon’s letter or the EA Order. It is submitted that SEBI and the stock exchanges should consider the Scheme independently on its merits, and as per SEBI regulations,” said FRL in the filing adding.
A similar filing was also made by another Future group firm, Future Lifetstyle Fashions Ltd.
Future Group had announced August 29 merging certain companies carrying on the retail and wholesale business and the logistics and warehousing business into Future Enterprises Limited (FEL), which would be transferred to Reliance Retail Ventures Ltd (RRVL), subsidiary of RIL.
In August last year, Amazon had acquired 49 per cent stake in FCPL, the promoter entity which owns a 7.3 per cent interest in FRL that operates more than 1,500 stores across India including grocery chain Big Bazaar.