The Supreme Court is likely to announce its judgment on e-commerce giant Amazon's pleas against the merger of Future Retail Ltd (FRL) with Reliance Retail at 10:30 am on Friday, August 6. The apex court is likely to decide whether Singapore's Emergency Arbitrator (EA) award, restraining the Rs 24,731 crore deal, was valid under the Indian law and capable of being enforced here. As per the apex court’s website, the verdict will be decided by a bench of Justices R F Nariman and B R Gavai, which was earlier reserved on July 29, after hearing the arguments made by the lawyers, including senior advocates Harish Salve and Gopal Subramanium, appearing for Future Retail and Amazon respectively.

Let's keep in mind that an Emergency Arbitrator (EA) in Singapore had directed for a stay on the Future Retail deal. The verdict by Supreme Court is keenly awaited as it will bring to light the enforceability and legality of the stay by the EA of a foreign country here in Indian lands, given that EA as a term is not used in the Arbitration and Conciliation Act.

Obviously, the stay severely affected Future Retail’s plans here locally. What's important is that throughout the course of litigation, Future Retail has been arguing that Emergency Arbitrator is a concept that is not recognized under Indian law. They pointed out that there is no explicit mention of Emergency Arbitrator in the Indian Arbitration and Conciliation Act. And as a result, the orders of the EA are not enforceable in India.

Further, their council also pointed out before the apex court that the Emergency Arbitrator is now a thing of the past. After the Emergency Arbitrator, the arbitral tribunal was already formed and the hearing over there also got concluded.

So with that in mind, the argument essentially is that whether the EA order holds that much weight?

This matter, of course, Amazon has argued to the contrary. They have batted that the Emergency Arbitrator is not a piece of fiction. It is in fact a valid order that can be enforced, should be enforced and that’s the stance that they have taken.

Now, this is the debate that the justice Nariman-led bench of the apex court will be deciding over.

Can the Emergency Arbitrator order be enforced? Can it be applicable here in India? And if it is applicable, then what are the consequences for the stakeholders in question? So that's the question that will be answered today by the Supreme Court. The judgment will give clarity on the way forward but again, big stakes are involved here. The Future Retail deal and stake is at play till we get clarity from the SC.

Disclosure:

Network 18, which publishes cnbctv18.com, is a part of the Reliance Group.

(With inputs from PTI)

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(Edited by : Dipika Ghosh)

First Published:Aug 6, 2021 10:14 AM IST