Delhi High Court: The Division Bench of D.N. Patel, CJ and Jyoti Singh, J., stayed the arbitration proceeding in Amazon v. Future Group before the Singapore Tribunal.

High Court prima facie found merit in the appellant’s contention that the agreement between Amazon and FCPL was unenforceable and consequently, the Arbitration Agreement and in view, thereof the Arbitral Tribunal should have taken up the application filed under Section 32(2)(c) of the Arbitration and Conciliation Act, 1996 seeking termination of the arbitration proceedings, on priority and before recording the evidence. For reaching such prima facie finding, the Bench inter alia considered and laid emphasis on the order of CCI [Proceedings against NV Investment Holdings LLC under Sections 43A, 44 and 45 of the Competition Act, 2002, In re.,]:

“48. In view of the above, the Commission notes that the Internal Correspondence discussed above clearly demonstrates that Amazon had failed to disclose true and complete details of the purpose of the Combination, which is required to be given under Item 5.3 of Form I. Further, Amazon had misrepresented that its decision to pursue the Combination was based on the unique business model of FCPL, and that FRL, a company with strong financials and futuristic outlook, is relevant to the Combination only from the perspective of financial strength to FCPL. As brought out earlier, Amazon also failed to disclose and clarify the real purpose of the Combination in the Notice and continued with its false/misleading assertions even in its response to the queries posed vide letters dated 9th October, 2019 and 24th October, 2019 of the Commission. Amazon has also suppressed relevant and material documents required to be furnished in terms of Item 8.8 of Form I. Considering these, the Commission has no hesitation to hold that such conducts of Amazon amount to suppression and misrepresentation of the purpose of the Combination, which is a material particular. This is in contravention of the provisions contained in clauses (a) and (b) of Section 44 and clause (a) of sub-section (1) of Section 45 of the Act. The conduct of Amazon in suppressing relevant and material documents against the disclosure requirement under Item 8.8 of Form I is a contravention of clause (c) of sub-section (1) of Section 45 of the Act. Similarly, the rights over FRL that were considered as strategic in the Internal Correspondence of Amazon, were represented as mere investor protection rights. Such repeated assertions, contrary to their actual purport, amount to statements that are false in material particular, in contravention of the provisions contained in clauses (a) and (b) of Section 44 and clause (a) of subsection (1) of Section 45 of the Act.”

(emphasis supplied)

In the Court’s opinion appellants made out a prima facie case for grant of interim relief and the balance of convenience also lies in favour of the appellants.

Hence, the Bench stayed the further proceedings before the Arbitral Tribunal in NV Investment Holdings LLC v. Future Coupons Private Limited, SIAC Arbitration no. 960 of 2020 as well as the impugned judgment passed by the Single Judge [Future Retail Ltd. v. Amazon.Com NV Investment Holdings LLC, 2022 SCC OnLine Del 13, decided on 4-1-2022], till the next date of hearing.[Future Retail Ltd. v. Amazon. Com NC Investments Holdings LLC, 2022 SCC OnLine Del 78, decided on 5-1-2022]

Advocates before the Court:

For the Appellant: Mr. Harish Salve & Mr. Sandeep Sethi, Senior Advocates with Mr. Raghav Shankar, Mr. Harshvardhan Jha, Ms. Ritika Sinha, Ms. Arshiya Sharda & Mr. Aman Pathak, Advocates

For the Respondents: Mr. Gopal Subramanium, Mr. Rajiv Nayar, Mr. Gourab Banerji, Mr. Amit Sibal & Mr.Nakul Dewan, Senior Advocates with Mr. Anand S. Pathak, Mr. Amit K. Mishra, Mr. Shashank Gautam, Ms. Sreemoyee Deb, Mr.Vijay Purohit, Mr. Mohit Singh, Mr. Promit Chatterjee, Ms. Anubhuti Mishra, Mr. Shivam Pandey, Ms. Samridhi Hota, Ms. Nikita Bangera, Mr. Pratik Jhaveri, Mr. Faizan Mithaiwala, Ms. Didon Misri, Mr. Chetan Chawla, Mr.Vijayendra Pratap Singh, Mr. Rachit Bahl, Ms.Roopali Singh, Mr. Abhijan Jha, Mr. Priyank Ladoia, Mr. Tanmay Sharma, Ms. Vanya Chhabra, Mr. Arnab Ray, Mr. Vedant, Kapur, Mr. Shaurya Mittal, Mr. Abhisar Vidyarthi, Mr. Kartik Nayar, Mr. Pawan Bhushan, Ms. Hima Lawrence, Ms. Ujwala Uppaluri, Mr. S.P. Mukherjee, Mr.T.S. Sundaram, Mr. Vinay Tripathi, Mr. Aishvary Vikram, Mr. Kaustubh Prakash, Ms. Anushka Shah, Ms. Neelu Mohan, Ms. Smriti Kalra & Ms. Manjira Dasgupta, Advocates for R-1

Mr. Mukul Rohatgi & Mr. Dayan Krishnan, Senior Advocates with Mr. Mahesh Agarwal, Mr. Rishi Agrawala, Mr. Karan Luthra, Mr. Pranjit Bhattacharya, Mr. Sanjeevi Seshadri & Mr. Ankit Banati, Advocates for R-2

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