Thread by @barandbench

[Future-Amazon] #SupremeCourt to hear pleas by #Future Coupons & Future Retail against Delhi High Court’s order directing attachment of assets of Future group companies and its promoters for breach of Emergency Award.
#Amazon #Reliance

CJI: There are lot of issues in the matter. One SLP is against Delhi HC’s order, that may not be relevant now. The other are two SLP’s filed by future group against J Midha’s order. Earlier we had passed an order.
What’s the relevance now Mr Salve ?

Sr Adv Harish Salve: Accordinv to us the order has to be vacated. Till the order is vacated directions will continue.
We had agreement about arbitration. They invoked arbitration based on agreement they had with Mr Rohatgi’s client (FCPL).

Salve: I mentioned that I have no agreement with Amazon. The judge said the EA is valid.
On merits the Judge concluded that there is no arbitration agreement. The single judge said prima facie they are in breach & authorities will decide acc to law.

Salve: Amazon came to this court and court said all proceedings may go on but no final order be made. EA’s operative injunction was that a resolution which was passed will not be acted upon.
We filed applications before Delhi HC etc, SEBI gave us permission, .

Salve: we’re now in NCLT for meetings to be scheduled etc, so we have gone much beyond that resolution, then you have to go and get a further interim order.

Salve: Amazon chose to rest on EA order and never went to the Tribunal which was constituted in the meanwhile.
Our submission is this order has to go. This order was passed in complete breach of natural justice.

SC: Your first SLP which has challenged J Midha’s order, we had said no implementation of that order. We never said Delhi High court to not hear the matter for what has come up subsequently. We will clarify that. Let Delhi High Court decide that matter.

SC: Now after this single judge order, again you have gone back to Singapore arbitration. J Midha’s order except penal consequences will automatically go.
Salve: That's our submission.
SC: What remains in the first order?
Salve: Acc to us, that order has to be vacated now.

Sr Adv Gopal Subramanium: We want somebody to be honouring the law.
Your lordship said that, arguments had concluded by the tribunal, let's wait for the order. The arbitral tribunal had rejected it.
SC: First order is suspended or second?

Subramanium:Net effect is until the order of Arbitral order is suspended under proper appeal under 37, it has to be contrived. My friend wants tk vacate Justice Midha's order because it says you have to comply.

Subramaniam: Please see para 133- emergency arbitrator is the sole arbitrator. Law gives complete freedom to the parties to choose arbitrator. Award of emergency arbitrator is binding to all parties. That doesn't mean that subsequent arbitral tribunal cannot modify the award.

Subramaniam: That's what Justice Nariman's judgement said. You cannot come back and say order of emergency Arbitrator is a nullity.

The respondents have not given any reason to not have disclosed the facts even though they were directed to do so.

Subramanium: Agreeably, the respondents have breached the agreement. Emergency arbitrator had given fair opportunity to both parties to present their case.
The emergency arbitrator is an arbitrator for all interests and purposes.

Subramanium: I just want the order to be obeyed. I'm not interested in anyone going to prison. Your lordships say it's a valid order.
You said you've gone to the tribunal, let's wait fourt weeks. Now tribunal has rejected. Now they suddenly have appeal under 37.

Subramanium: We cannot have a lawlessness situation where since 2020 they are violating the order everyday.
He files a complaint before the CCI
Salve: If my learned friend will go on merits, I should also be heard.
Subramanium: I have no problem

SC: Listen to us. We see prima facie agreement that first order of Justice Midha we don't want to use the word influctuous but because of the second order passed by SIAC, we don't have to go into that. What we thought is, the rest of the matters we are not going into those issues

SC: . In the first matter, let Del HC hear the plea filed by other party and hear the matter. Not on merits, that's what we thought.

Subramanium: There is something called rule of law. The man cannot take all remedies available but not follow the order. They have to follow it.

Subramanium: If someone has violated the law, the court is allowed to implement it. If it is valid and enforceable then I don't care about the penal provisions.
He can pursue the remedy but till the judge decides the matter, he must abide by the tribunal's order

Subramanium: Now they have stayed the arbitration proceedings also. We've filed a separate SLP for it.

SC: Mr Rohatgi, in the first matter you're not there?

Sr Adv Mukul Rohatgi: I'm representing Future Coupons and Mr Salve is for Future Retail. Both are parties.

Rohatgi: Justice Midha's order is against both the companies. I have three submissions to make:
1. Justice Midha didn't give three days time to file response.
On this itself, the order must go. Holding us in contempt is baseless.
I don't get time to file a reply and hearing

Rohatgi: goes on everyday. 200 page judgement is made holding everyone guilty without reply.

2. The punitive directions cant be passed without hearing.

3. Order has been reaffirmed when they went to arbitrator. This is an ad interim order

Rohatgi: As Subramanium told you, parties went to CCI
SC: We are not going to deal with what happened subsequently. We are only concerned about Midha J's order
Rohatgi: One line. An 80 page order to hold Amazon is fraudulent. If the order goes no arbitration. Further arbitration

Rohatgi: has been suspended by this court. So Justice Midha's order isn't there.

SC: The purpose we are hearing is to give you a chance to appear before single judge. You only argue Justice Midha's order.
Rohatgi: Coupons and Retails are independent. The Bianis are independent.
This has caused great prejudice against us. We are business people.

Rohatgi: Neither coupons nor Bianis have not implemented the order. It would be wrong to hold us in contempt .
Salve: Mr Rohatgi showed you the problem of not filing a reply.
SC: Mr Rohatgi agreed to us.
Salve: Yes yes. Mr Subramanium says we are trying to vacate the order so

Salve: I want to make a submission. It was open to me to argue that this order is a nullity for want of an arbitration agreement.
Whether FRL was bound by the agreement was not discussed.
This is what happens when you don't file a reply.
My plea was not about validity of

Salve: emergency arbitrator. I claimed nullity because it was not a part of the agreement.
This is the trouble when we do super fast forward hearings.
Ld single judge of the Del HC-civil suit is not barred due to emergency arbitrator. Look at the clear finding that

Salve: whether the resolution is void based on statutory provisions. The finding is board resolution is neither void nor contrary to any statutory provisions.
This is a HC judge after the EA order.

SC: This judgement is 21/12/2020?
Salve: Yes, after the EA order.
I pointed this out to Justice Midha he said it's prima facie.
SC: Justice Mukta Gupta's order is about injunction only. It's not a contested order?
Salve: It was on contest, for days and days it was argued.

Salve: We said if there's an order of a constitutional court which says if prima facie you don't have an arbitration agreement then what is the question of enforcing the Emergency Arbitrator?
He said prima facie, that wasn't the issue

Salve: Third important point is the finding on arbitration agreement. If your lordship sees pg 59.
We argued before Justice Midha. There is an agreement between Amazon and Future Coupons. As Amazon said CCI, they were investing in the Coupon company.

SC: You have to say how the order is not made out. All of you are focusing on some CCI order that is not relevant before us.
What we are thinking is if you tell us the things the single judge did not consider, substantiate that.
Salve: It's not as simple as Mr Subramanium says.

SC: As of now the interim order or award is in force. That was not set aside. You are not implementing the order. Let the HC deal with 37 appeal, that's not the issue. The award given by SIAC should be implemented that's the submission.

Salve: Your lordship gave limited protection to us by saying no one will file a final order in four weeks. We applied for CCI permission because it's required. NCLT is organising meetings etc. After that final order will come. FRL is on the brink of bankruptcy. This process takes

Salve: months. It will come back to NCLT in 7/8 months. Amazon has won, even if they lose the arbitration. Once they go to bankruptcy court, my client is over. What Amazon wants is paralyse everything. If all their shops close it's good for Amazon.
That's why single judge can

Salve: the matter. They are saying EA's order is to be enforced but there is a constitutional court order that you're not considering.
Mr Subramanium repeatedly says Justice Midha's order is upheld. I want to say only two parts of the order have been upheld.

Salve: The question is whether a emergency award is within the reasoning of the act and the finding is yes it is.
Your lordships said CPC is not applicable so no appeal lies. Anything happens even at district court, it has to come to you. Fair enough, your lordships.

Salve: Justice Midha's order suffered from 2/3 problems. First is lack of natural justice. Second, My client has no agreement for arbitration sonas far as I'm concerned order about that is void.
Thrid, it fails to answer-there is an emergency award and a constitutional court

Salve: said that agreement doesn't exist.
The order of emergency Arbitrator is rule of law. Let's not get into rule of law. Many things will come out about Amazon in and outside India

Salve: What should be the position? My submission in 9 Sep order made by your lordships that says no final order is to be made. This final order is significant.
We have a timing issue.
The High sounding argument from this company is rule of law which is odd coming from them.

SC: We understand. I don't think we need to go to details.
Salve: That's why Amazon wants to freeze everything.
When your lordship said don't pass final order, it was about the scheme. We haven't gotten to the scheme.
The CCi passed an order saying that original permission was

Salve: gotten by supression of facts. We moved an application saying terminate the arbitration because the matter needs to be treated afresh.
The tribunal said we'll first hear expert witnesses.
SC: I (CJI) asked how much time it will take.
Salve: They said if you don't finish by

Salve: 8/1 then it will go into May. So it's May. The three points I wantef to make
SC: That you've already told us.
Salve: Where does the balance of convenience lie? Till we hit item 14, nothing final can happen. Shareholder meetings and all has to happen. Amazon's concern is

Salve: sale of assets for which a scheme has to be there. We are not even close to it. With covid it's even further. If arbitrator says you cannot culminate this transaction then subject to order in appeal, the sale is held back.
It is time sensitive because we have outstanding

Salve: debts. The reliance deal will pay the banks. One condition to that is no employee is to be sacked, it's saving 30,000 jobs.
Till the sale happens, Amazon is not to be heard. If there is freeze on the scheme, I can't even go to the bank.
Amazon's only answer is rule of law

Rohatgi: Only two things my lords. Since Arbitrators didn't hear termination, I am asking the HC to terminate the proceedings because of CCI order.
The individual promoters of Future- Bianis. Their neck is in the noose. If we don't get the Reliance deal, everyone will be sunk.

Rohatgi: Till the penultimate step if Amazon is involved, it will not cause prejudice. If there's a freeze than a lot is stuck. We can't move ahead for banks and employees.

Sr Adv Aspi Chinoy: FRL appeared before the arbitrator and said they're not a party and the arbitrator filed an injunction. They continued to disregard the order and proceed with the scheme.
In arbitration act, you can't have collateral proceedings with arbitration.

Chinoy: HC is in the process of injunction. Justice Nariman said also doesn't like. Notwithstanding they contributed with the scheme.
It's a travesty. The order has never been challenged in appeal.
We are dealing with the process of law. The conduct of petitioners is such that

Chinoy: should not entertain them. They won't appeal, collateral proceedings not allowed and they are continuing to violate the order of the arbitrator.
Subramanium: Arb Act is a self contained act. The 25/10/2020 order has to be put in effect.
Amazon sought emergency interim

Subramanium: order according to SIAC rules. The Biani group went on with transactions ignoring the award. They did not challenge the award but approached Del HC. A judge refused to grant any interim injunction.

SC: We are already aware of all this.
Subramanium: The CJI was right in framing the question- unless the judge disposes the plea shouldn't there be an order in place?
*Reads from the paperbook*

Subramanium: Having agreed to SIAC rules, parties cannot call emergency Arbitrator award to be a nullity.
Justice Midha only applied S17. He asked will you at least honour the order,they did not.

Subramanium:All interim orders were vacated by the ld judge. The position is this is the order. One application was under S16 saying that he's not a party of the agreement while Indian law allowed party to be added.

Subramanium: We were willing to assist. We made that offer always.
SC: We cannot ignore the argument made by jobs of the people.
Subramanium: We are making an offer since the beginning. Why would we not be interested in the survival of the company because we also have stake

Subramanium: if my friend wants any appeal, it should only be 37 appeal. In will contest it. The penal direction in Justice Midha's order in not interested in. Just that the order is a legal order, maintaining the Arbitral order.
Sr Adv Ranjit Kumar:Mr Salve asked for a dismissal

Kumar: of the order and he's defending it. My friend says it will take six months but if it was a consent order, how come authorities are going on and passing orders. How is he asking for modification of 9/9 order?
Salve: Amazon keeps misdirecting that the nullity is about

Salve: emergency arbitrator. The second argument was that there was no agreement. That your lordship hasn't gone into yet.
The biggest lie Amazon is trying to perpetrate is that they've been trying to help. None of them came up with the money. So we were left to beg to Reliance

Salve: for a deal.
SC: All SLPs are done?
Salve: yes, all four are over.
Subramanium: Now we'll have homework.
SC: I won't write a lengthy judgement