The Delhi High Court Tuesday dismissed two petitions filed by Future Group companies seeking to quash Amazon’s arbitration proceedings before the Singapore International Arbitration Centre (SIAC). Both the petitions asked the court to direct the SIAC to first decide on the Future Group’s application for terminating its 2019 investment deal with Amazon before continuing with the arbitration proceedings.
Future Group approached the Delhi High Court before the commencement of the arbitration proceedings in response to India’s competition regulator reversing its approval of Amazon’s 2019 investment in Future Coupons Private Limited (FCPL). As part of its plea, Future Group argued that since the Competition Commission of India (CCI) had withdrawn its approval for the 2019 deal, the agreement between Amazon and FCPL along with the arbitration clause within such agreement would be rendered invalid.
The plea further argued that SIAC’s refusal to first decide on Future Group’s termination application amounted to a denial of equal treatment in violation of Section 18 of India’s Arbitration and Conciliation Act. In response, Amazon said it was considering an appeal against CCI’s withdrawn approval and that the withdrawal would not invalidate the arbitration clause along with the agreement since regulatory approval existed at the time of the agreement coming into force.
The court rejected the Future Group’s claims and ruled that the SIAC has significantly greater flexibility than civil courts in the manner and procedure of conducting arbitral proceedings, including the order in which applications filed by parties are to be considered. The arbitral tribunal is not bound by domestic rules of civil procedure and evidence, and the tribunal’s jurisdiction can only be challenged under exceptional circumstances or perversity under Article 227 of the Indian Constitution, which are not present in this case.
Amazon initiated arbitration proceedings against its Mumbai-based partner Future Group in 2020 to block the pandemic-hit company from selling its assets to Amazon’s market competitor Reliance Industries. An emergency arbitrator’s order in favour of Amazon was upheld by the Indian Supreme Court last year. Since then, parties have been embroiled in back and forth disputes over the award’s enforcement before the Indian courts and regulators as well as the SIAC.