The talks between Amazon and Future Group, initiated at the behest of the Supreme Court, to reach an out-of-court settlement have failed. The chief justice bench of the apex court was informed about the development on Tuesday while hearing Amazon’s challenge to the Delhi High Court order staying proceedings before an arbitration tribunal in Singapore regarding its 2019 deal with Future Coupons.
In the last hearing on March 3, the Supreme Court had asked Amazon and Future to negotiate an out-of-court settlement, to which both parties had consented, sparking hopes of an end to the bitter legal battle between the two retail players.
Gopal Subramanium, appearing for Amazon, told the three-judge bench, consisting chief justice of India N.V. Ramana and justices A.S. Bopanna and Hima Kohli, that the mediation between the two parties failed to make any headway. He then objected to Reliance Industries taking over stores, even though the court had asked all parties to refrain from taking any action.
Earlier today, Amazon released newspaper ads in today's newspapers, accusing Reliance of taking over Future’s stores in a “clandestine manner by playing a fraud on the constitutional courts in India”.
Harish Salve, appearing on behalf of Future Coupons, told the bench that although founder Kishore Biyani had presented terms for settling the dispute with Amazon, nothing came out of it.
On Reliance taking over stores, Salve further clarified that Future Group has not surrendered a single store, and that only lease and license agreement have been forfeited. He added that the legal battle with Amazon has driven Future Group to bankruptcy, forcing its hand to let go of the stores’ leases.
Reliance is acting outside the litigation and is taking over Future assets since the latter is unable to pay the rent, Salve further said.
The Supreme Court bench has asked Future Coupons to respond to Amazon’s application by March 16, when the matter will be heard next.
A tribunal of the Singapore International Arbitration Centre (SIAC) has been hearing Amazon’s case against Future Group, related to their deal involving Future Coupons in 2019. The tribunal had passed an interim order halting the sale of Future Retail assets to Reliance Retail. Future Retail has Future Coupons as a stakeholder, and on this basis, Amazon claims first refusal rights for acquisition of its assets.
Future Retail had pleaded before the tribunal that continuing arbitration proceedings would be illegal since Competition Commission of India (CCI) has suspended its clearance for the 2019 deal. The fair-trade regulator had ruled that Amazon withheld its intentions to acquire stake in Future Retail while signing the deal with Future Coupons. It had also imposed a ₹202 crore penalty on Amazon. The order is under challenge in NCLAT.
After the tribunal refused to consider the request, Future had moved Delhi High Court. A divisional bench of the high court had stayed the arbitration proceedings between Amazon and Future, as well as the order of the single-judge bench which refused to intervene in the matter and dismissed the pleas by two subsidiaries of the latter company. Amazon had then moved the Supreme Court against this order.