Delhi High Court begins hearing Future Retail's suit against Amazon in relation to the emergency arbitrator award stalling its deal with Reliance Retail.

#FutureRetail #Amazon #Reliance

Matter listed before Justice Mukta Gupta.

Senior Advocate Harish Salve continues his rejoinder submissions on behalf of Future Retail.

I will take the Court through the legal provisions.. the FEMA provisions: Salve

More than 10% investment would have violated the law : Salve

I will take the court through the disclosures before the Competition Commission: Salve

What court has been addressed by Mr Subramanium was that two agreements (FCPL and FRL SHA) were back to back. What they tell CCI is to the contrary: Salve

Salve reads the disclosure.

Salve continues to read the disclosure.

Please note that the control of FCPL was with FCRPL: Salve continues to read

Investor did not acquire any control .. rights were exclusively governed by the terms of the SHA with FCPL : Salve

Today court is being told that Amazon was conferred the right that unless he consents FRL cannot part with its assets: Salve

Salve continues to read.

FCL requires Amazon's permission, not FRL. What is his rationale for this investment? I've already shown it. It's all FCL, FCL, FCL! : Salve

Amazon has mentioned that it is not acquiring any interest and through FCL, there will be no control over FRL. Per contra, what is he saying before the Court.. : Salve

Salve refers to a chart he submitted to the Court.

This is the chart which refers to various provisions (of SHA)?: Court

Yes : Salve

Court was told two things. One that these are minority investor rights- the brakes..but these are actually accelerators. If their argument is accepted, the object was the buisness is to promote both businesses. The agreement is not don't do. It's do: Salve

Second is how people will vote in FRL SHA : Salve

Salve continues to read the chart.

You are agreeing with FCL that board of directors of a listed entity will act in a particular manner.. how is this investor protection? This is indirect control:. Salve

I gave judgements that primary duty of even nominee directors is towards the company : Salve

Amazon pursuaded the Emergency Arbitrator that the money that they invested in FCL was used to buy shares in FRL : Salve

Is there any provision on consequences of breach? : Court

No : Salve

FRL SHA defines restricted persons. These rae such persons as communicated by FCL on the effected date and updated.. this is unilateral: Salve

In Amazon SHA, these are persons listed in Schedule III. This is a mutually agreed list : Salve

If Amazon has all the rights because of tying of documents..it means he has the right to dictate restricted persons. My (FRL) agreement to do so was with the Biyanis: Salve

(If their argument is accepted) The degree of Amazon's control will become enormous.. an American company with less than 10% .. can it have the right to tell whom I can do buisness with?... (Reliance wants to buy but) sorry I have to ask Big Brother sitting in America? : Salve

But they tell CCI that I have no control over FRL! : Salve

To suggest that preventing FRL from selling five stores to Zomato or someone doing online food business cannot protect minority rights of Amazon in FCPL : Salve

They say where is the agreement with Reliance: Salve

Salve refers to certain documents.

Salve refers to the Scheme approved by the FRL Board.

How much money has Amazon out in? Rs1400 crores.. we're also now big businesses in India: Salve

Put in*

Salve reads the Scheme.

Whole business is being taken over and paid for.. if all this is agreed to, doens't it sound off to suggest that there is no agreement with Reliance: Salve

Reliance will have to appear here and commit to it. All this is not unilateral: Salve

This must have been approved by Reliance board as well : Court

Yes: Salve

Even if Amazon grew a beard and invested as a portfolio investor, he would have no locus here and make submissions. If you do not have skin in the game, you cannot object to schemes. Please see the new companies act. Section 230: Salve

Assuming Amazon invested 9% through portfolio and this transfer was being made.. the objection could be made by person holding at least 10% .. : Salve

FDI is 10% or more. FPI is investment through equity which is less than 10%. FPI is only permissible in FRL only and not FCL but Amazon will have no right to invest. FPI is passive investment : Salve

When you have passive investment of less than 10%, you cannot make it an active investment. It is not investor protection: Salve

The policy of Indian law..time sensitive transactions were being held up by people with 50 shares.. so this is what our policy was became. If you are less than 10%, you have no say : Salve

FRL is a public listed company.. Amazon cannot object : Salve

What is it that I am saying.. I'm saying that they're misrepresenting that I've allowed this East India company to take charge over me.. : Salve

Creditors worth 18000 crores are being protected. All these are Indian people.. Amazon doesn't care. Indians will sort out their own problems. Why would you (Amazon) say thay I wouldn't do business.. if all these shops close down, you will go to Amazon: Salve

Why does law prevent sale of goods cheaply? You will run all competitors to the ground. Later you will milk the situation.. idea is that competition remains. What will happen if this transaction goes through? Reliance will enter the market: Salve

Reliance may not be as big as Amazon but it is a muscular company in India. What prevents Reliance from entering online market. It will then be Amazon vs Reliance: Salve

I'm inviting the court to hold that the basic assertion that Amazon has rights in FRL is wrong. Please declare that my board is free to act. If Amazon has been back stabbed by Biyanis, let it act against them : Salve

Emergency Arbitration was recommended to be brought in Indian law. But it was not done. It may be done tomorrow. The endeavour behind Arbitration Centres is to make it attractive for international arbitration: Salve

To say rules of Arbitration Centres should be read into Arbitration Law is too much : Salve

My case is based on contractual documents and law : Salve

I'm not asking to declare its illegality: Salve

I'm have not come here challenging the award. This is also not a proceeding to enforce the award: Salve

Amazon is saying that it concludes the issue. I'm not saying anything: Salve

Hearing to resume at 2.15 pm today.

Senior Advocate Darius Khambata will make submissions on behalf of FRL.

Future Retail v. Amazon: LIVE UPDATES from the hearing in Delhi High Court

@kishore_biyani @amazon @reliancegroup #HarishSalve https://www.barandbench.com/news/litigation/future-retail-amazon-suit-live-from-delhi-high-court

Hearing resumes.

Senior Advocate Darius Khambata begins..

#Amazon #FutureRetail #RelianceRetail

I will focus on the defense that all this has been considered by the Emergency Arbitrator and that it is not being challenged : Khambata

Argument that as that emergency award was not incompatible with Part I of Arbitration Act. And that parties could choose to provide for an emergency Arbitrator: Khambata

Third is their reliance of section 15. Fourthly, they say Emergency Arbitrator Award is accepted in India : Khambata

Fifthly, they say that they've only told SEBI that there is an award. Lastly, until it is declared void, it is not a waste paper: Khambata

I will show how misconceived this is : Khambata

We don't have to challenge the award in law and I will make this good : Khambata

The award is a nullity ..we have not sought a declaration but it is there. I am entitled to ignore the award : Khambata

The prayer b is on the lack of legal status of this instrument, the award : Khambata

The basis of their argument is that the agreements form a single integrated transaction. We seek to injunction them to use it as a basis. We have not appealed against the award in the sense but the challenge is there : Khambata

Entire thrust of attack, the misrepresentation before SEBI is the binding nature of the award: Khambata

Khambata refers to the letter to SEBI written by Amazon.

They say it is a binding order and not an opinion. Therefore, it will bind the regulator also : Khambata

This is an unlawful interference with my business and contractual rights : Khambata

FRL writes to SEBI on Nov 1 because SEBI said what are your comments: Khambata

We've expressly said that the emergency Arbitrator has no legal status under Part I. We took this stand right on the outset: Khambata

We said there is no jurisdiction, it is a nullity: Khambata

We also write a second letter to SEBI on Nov 5: Khambata

We said it was unfair for Amazon to drag a statutory authority.. : Khambata reads the letter.

We say that Amazon is asserting that it has control over FRL on account of single integrated transaction but it did not say so before the regulator: Khambata

Amazon wrote back to SEBI: Khambata

These documents have come without statement of truth at the stage of rejoinder: Senior Adv Rajiv Nayar for Amazon

Are you disputing the letter : Khambata

I'm only on procedure: Nayar

I've noted the objection. I'll come to you: Court tells Nayar

They set out my objections in the letter.. they address what they call the legal status of emergency Arbitrator in India. This is a very guarded language : Khambata

Their plea is that emergency Arbitrator has a legal status and award was not a nullity: Khambata

It is their express case before the regulator that the award is binding. It is a complete falsification of the legal position : Khambata

There is bald denial of control over FRL .. they have no answer.. : Khambata

Therefore it is very clear that they are asserting to regulator that there is a single integrated transaction and the award is binding: Khambata

It is crystal clear that it is part I Arbitration. It is a full fledged Indian Arbitration : Khambata

In this agreement, one of the party is a foreign party. Even if the seat is New Delhi, can it still not be international arbitration? : Court

Yes, an international commerical arbitration but it is seated in India : Khambata

FRL is not a party to this Arbitration agreement. FRL is a party to a different Arbitration Agreement : Khambata