Two people directly familiar with Tuesday’s development at SIAC confirmed this.
SIAC, on October 25, had approved a provisional order in favor of Amazon, preventing Future Group from continuing with the agreement.
Amazon has also asked the Indian market regulator to prevent Future Group from merging six of its companies, which is a key part of the deal with RIL.
SIAC’s arbitration panel is meant to render the final verdict whether Future Group can go ahead with its mega-deal with RIL or not.
“The SIAC Registry has informed the parties that the arbitral tribunal has been constituted,” said Alexander Kwiatkowski, Amazon spokesman for Asia Pacific.
Amazon, on October 5, had filed an arbitration case against Future Group for deciding to forge an alliance with RIL to sell Future Group’s retail, wholesale and logistics business without Amazon’s consent, which was required under an agreement signed between Future Group and Amazon in August 2019.
“Veteran attorney Michael Hwang has been appointed as a court judge in the Amazon-Future case,” said the first person who learned of the incident.
There will be two members on the arbitration panel when the case goes to a hearing in the next few weeks, according to the first person.
Albert Jan van den Berg, founding partner of the law firm Hanotiau and Van de Berg and Jan Paulsson, veteran of Swedish arbitration and founding partner of Three Crowns Llp. They are the two members of the arbitration panel.
“Albert Jan Van Den Berg has been appointed by Amazon, while Paulsson has been shortlisted by Future Group as members of the tribunal,” said the first person.
Hwang is a former judicial commissioner of the Supreme Court of Singapore.
SIAC’s final verdict will be key to the RIL-Future deal, as the Delhi Court recently ruled that Future Group and Amazon should approach regulators or competent authorities and follow their judgment.
While an interim order from SIAC prevented Future Group from taking any step towards the proposed settlement with RIL, the SIAC court may dismiss this interim order and judge in favor of Future Group, as the Delhi High Court has mentioned in its order that Amazon would be in breach of India’s FDI rules if it intervenes in the agreement between Future Retail Ltd. and RIL, as Amazon does not have control of FRL and has not taken government approval to control FRL.
India’s FDI rules allow a 51% stake by a foreign entity in a multi-brand retail company like FRL, but Amazon did not accept the government’s permission to acquire control of FRL. However, the agreement between Amazon and Future Group, which was signed in August 2019, states that Future Group cannot forge an alliance in the retail space with RIL without the prior consent of Amazon.
Amazon and Future Group are embroiled in a bitter legal battle that is rapidly escalating in the wake of increased competition between some of the world’s largest retailers to capture market share in India’s thriving retail and e-commerce space.
And therefore, the final SIAC ruling will be crucial for Amazon.
A favorable verdict will help Amazon continue to serve its Indian retail customers smoothly, as Future Group will have to continue to provide customer-ordered products in Amazon’s marketplace through digital applications.
A ruling against Amazon will make the e-commerce battle difficult for Amazon as it will have to compete with an already developed Indian retail giant RIL.
In fact, to stop the RIL-Futuro deal, Amazon has written five letters to the Sebi India Securities and Exchange Board.
In its latest letter of December 21, Amazon has asked Sebi to halt the merger of the Future Group companies, for which both BSE and NSE have recently awarded NOCs.
The Delhi High Court, on December 21, approved an order, rejecting Future Group’s request for an interim injunction to prevent Amazon from approaching regulators about the RIL-Future deal.
FRL has argued in court that SIAC’s ruling is not legally enforceable in India.
Future Retail Ltd. had prayed in the Delhi High Court for an interim injunction preventing Amazon from interfering with the RIL-Future deal. The Court has refused to grant this precautionary measure.
“The Delhi High Court has ruled that the interim award is valid under Indian law … The Delhi High Court has also made it clear that no observations were passed regarding the merits of the interim award. Consequently, all the conclusions contained in the interim award, including that FRL is a necessary and appropriate party in the arbitration proceeding, remain valid. The arbitration process continues like this, even against FRL, ”the letter from Amazon said.
On August 29, RIL signed an agreement with Future Group of Kishore Biyani to purchase the retail, wholesale, logistics and warehousing businesses of Future Group companies to ₹24,713 crore. Following this, Future Group approached the stock exchanges and Sebi for approval of a draft agreement scheme involving the merger of six Future Group firms into its Future Enterprises Ltd.
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