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This article is written by Prince Awana.


It wouldn’t be wrong to say that the US e-commerce giant Amazon has over time drawn heavy criticism from multiple sources and companies regarding its business practices and policies that question the ethics of the company. Numerous reports have accused Amazon of anti-competitive, anti-trust and monopolistic practices. The company has also been criticized for its bruising workplace, treatment of its employees, workers and consumers. 

India turned into a new global battleground for the online retail market in 2018 with Walmart’s acquisition of Flipkart. This led to a more intense battle between Amazon and Flipkart for leadership in the Indian market. And for India’s biggest brick-and-mortar retailer, Reliance Retail the market worth more than $450 billion is too lucrative an opportunity to ignore. Also, with the Indian retail market projected to reach $1.3 trillion by 2025, up from $700 billion last year, the battle of dominating India’s estimated $1.3 Trillion retail markets has turned ferocious. From multinational corporations (MNCs), well-funded startups to large reputed business houses and small neighbourhood shops, everyone is scrambling to make their way onto the weekly purchase lists of 1.4 billion consumers.

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This time Amazon’s battle is with none other than the Indian giant Reliance group. The legal battle has brought two of the world’s richest men at odds over the assets of the Future group. In a bitter dispute over Mukesh Ambani’s $3.4 billion purchase of Future Group’s assets, Amazon is locked in a stalemate with Mumbai-based Future Group. 

But will it be fair to say that with this legal battle Amazon is attempting to scuttle India’s largest retail sector deal? Apparently, Amazon has hinted that India’s willingness to enforce business contracts is at the heart of this disagreement. Since in the event Future Group’s reneging on its contract is permitted, it would mean that business contracts are not sacrosanct and it would have a bad impact on foreign investors’ minds that on-the-ground investments in India are precarious and of high risk. It will portray an unpalatable image to India as it looks to entice foreign investments. 

Over the span of the last few months, the spat has become nothing but more intense and fiercer with neither side backing off in the courtrooms of the national capital. Due to this tussle between the two giants, foreign investors are having difficulty keeping up with the swaying court rulings. The ruling of this case may set an important legal precedent, particularly for foreign investors concerning the validity of emergency decisions by foreign arbitrators in India. Recently, after a major setback, Future Group moved to the Supreme Court on August 12, to obtain a stay against the Single Bench order of the Delhi High Court. It looks like a fresh round of litigation might be in the offing for the Amazon-Reliance-Future Group dispute. Earlier this month, the Supreme Court through its judgment dated 6th August, 2021 ruled in favour of Amazon, putting India’s biggest retail deal in jeopardy. 


Global giant, Amazon notified the Competition Commission of India (CCI) in September, 2019 of its intention to acquire a 49% stake in Future Coupons, a subsidiary of Future Retail Ltd., India’s second-largest retail chain. Following the approval from CCI three transactions took place between “Amazon” ( NV Investment Holdings) and the “Biyani Group” or the “Future Group” (including Future Retail Ltd, FRL and Future Coupons Pvt. Ltd., FCPL) which triggered three agreements. It resulted in Amazon acquiring a 3.58% stake in FRL and 49% shares of FCPL by investing a sum of Rs. 1431 Crores. 

The Shareholders’ Agreement (SHA) dated 12th August, 2019 provided FCPL with negative, protective, special, and material rights with respect to FRL, including, in particular, FRL’s retail stores [“retail assets”]. FCPL was granted certain rights for the benefit of Amazon, which were mirrored in the SHA dated 22nd August, 2019 entered into between Amazon and the Biyani Group.

In short, apart from the transactional part, Amazon also acquired a certain amount of leverage through the ‘call option’ provided as part of the deal. As part of the ‘call option,’ Amazon was granted the right to acquire all or part of the shares of the promoting company Future Retail. Based on the rights granted to FCPL under the FRL’s and FCPL’s SHA, Amazon agreed to invest in FCPL which was recorded in the Share Subscription Agreement dated 22nd August, 2019 and in addition, this investment in FCPL was expressly stipulated to “flow down” to FRL. 

The basic understanding between the parties appears to be that the FRL was prohibited from encumbering, transferring, selling, distributing, or disposing of its retail assets to the prohibited entities with whom FRL, FCPL, and the Biyani group were not permitted to deal.   These restricted persons were then listed in Schedule III of the FCPL SHA, as well as within the FRL SHA dated December 19, 2019. It mentioned a list of 30 entities with whom the Future Group could not transact, including Reliance Retail, a subsidiary of Reliance Industries Limited and therefore it is beyond question that the Mukesh Dhirubhai Ambani group (Reliance Industries Group) is a “restricted person” under both these Shareholders’ Agreements.

Merger that led to the infamous feud

Regardless of the Amazon-Biyani Group contract, several months after Amazon invested, Biyani Group entered into a transaction with Reliance Retail that entailed the merger of FRL with the Reliance retail, leading to FRL’s cessation as an entity as well as the complete disposition of its retail assets along with its wholesale, logistics and warehousing business to the said group.

Following which Amazon issued a legal notice but the Biyani group did not respond to the said legal notice. Thereafter, Amazon initiated the arbitration proceedings and filed an application on 5th of October 2020 seeking an emergency interim relief under the SIAC Rules, seeking injunctions against the aforesaid transaction and the “EA” (Emergency Arbitrator) heard the detailed oral submissions and then passed an “interim award” concerning the Disputed Transaction, respondent was prohibited from taking any measures that would further or aid the Board Resolution by the members of FRL. 

And later the Appellant, Amazon instituted proceedings before the High Court of Delhi under Section 17(2) of the Arbitration Act to enforce their award/order passed by EA.

Having described the award as a nullity and the Emergency Arbitrator a Coram non-judice, the Biyani Group went ahead with the impugned transaction. Rather than contesting the award under Section 37 of the Arbitration Acta civil suit was filed by the FRL before the Delhi High Court seeking an injunction against the Emergency Arbitrator’s award which was disposed of, declining the grant of interim injunction as prayed by FRL. 

A Special Leave Petition (SLP) was filed before the Supreme Court in which the Supreme Court by its order dated 19th April, 2021 stayed further proceedings before the learned Single Judge and the Delhi High Court Division Bench and set the matter before this Court for its final disposition.

On the 6th of August, 2021 in a landmark ruling the Supreme Court upheld Singapore’s EA Award, halting the Rs. 24,731 crore merger of FRL and Reliance Retail. 


In the above-mentioned appeal, two critical issues were raised:

  1. Whether under Section 17(1) of the Arbitration and Conciliation Act, 1996 (Arbitration Act), “award” of the Singapore International Arbitration Centre (SIAC Rules) can be said to be an order?
  2. Whether a learned Single Judge of the High Court has appellate jurisdiction over an order passed under Section 17(2) of the Arbitration Act enforcing the award of an Emergency Arbitrator?

Judgment of the Supreme Court

The Supreme Court held that an emergency award passed by a Singapore arbitrator halting the FRL-Reliance contract could be enforced under Indian law. An emergency arbitrator’s award in an emergency settlement remains valid under Section 17(1) of the Arbitration and Conciliation Act, and an award entered by a single judge under Section 37(2) cannot be appealed.

Major takeaways from the judgment

As per the above-mentioned decision of the Supreme Court of India, it has not only approved the enforcement of the Singapore Emergency Arbitrator Award (EA) but the Supreme Court also affirmed that the judgment of a single judge of the Delhi High Court who had announced the Emergency Award valid. Furthermore, Supreme Court held that it cannot be appealed to a division bench of the High Court under Section 37(2) of the Arbitration Act. The highest appellate court stated that Section 37 of the arbitration act comprises the entire code governing appeals from an award or order made under that act. 

This landmark judgment throws light on various issues and clarifies a lot of points including but not limited to the following observations: 

  • According to the Arbitration Act, parties can be autonomous and have disputes decided according to institutional rules, including EA delivering interim orders, which are called “awards.” Obtaining such interlocutory orders is an important step in decongesting the courts while providing expedited temporary relief to the parties. Such orders fall under Section 17(1) of the Arbitration Act and are governed by it.
  • A provision defining emergency arbitrators in an agreement is not prohibited by the Arbitration Act. Furthermore, as various Sections of the Act speak of party autonomy in choosing institutional rules, the implied rules would state the position that they would govern the rights between parties, a position which is not precluded by the Arbitration Act but is explicitly endorsed by it. (17th Paragraph of the judgment) 
  • Section 17(1) definition also applies to interim orders passed by EA under the rules of a permanent arbitral institution as there is no specific definition of what constitutes an “arbitral proceeding” and therefore includes proceedings before an Emergency Arbitration. Accordingly, an arbitral tribunal as defined under Section 2(1)(d) is not applicable, and the arbitration tribunal spoken of in Section 9(3) is the same as that spoken of in Section 17(1), which includes an Emergency Arbitrator appointed under the institutional procedure.
  • An order made in contempt of court cannot be enforced the same way as Order XXXIX. In cases of contempt of court, the offender is usually punished by means of a monetary fine or jail sentence. By contrast, Order XXXIX, Rule-2A is aimed at enforcing the Order XXXIX, Rules 1&2, and for that purpose, the civil courts have been given exorbitant powers, such as the power to attach property, as well as pass sanctions such as imprisonment which have punitive aspects.
  • Just because a recommendation of a Law Commission Report is not followed by Parliament does not mean that the recommendation cannot be included in the statute as properly interpreted. When the time comes to enforce a permanent injunction, Order XXI, Rule 32 states that the detention and attachment must take place within a civil prison. Also, it can be said that Order XXI, Rule 32, governs the enforcement of injunctions in a manner similar to XXXIX, Rule 2A. It also illustrates the primary purpose of Order XXXIX, Rule 2A, which is to enforce interim orders.
  • By introducing Sections 9(2) and 9(3) it was evident that the intention was to avoid courts being swamped with Section 9 petitions during the process of establishing an arbitral tribunal for two good reasons i.e., to decongest the clogged court system and to establish an arbitral tribunal that could grant interim relief quickly and effectively once constituted.


In all likelihood, it is the above-mentioned conclusions and references outlined from the judgment in the Amazon vs Future Retail case that makes it one of the biggest landmark judgments not only in the field of Arbitration Law but also in the domain of Competition Law particularly when we take into account how the decision of Supreme Court stalled Rs. 24,731 crore merger of FRL-Reliance group by holding the EA’s award valid. Due to the retirement of Justice Nariman, the fresh SLP that has been filed by the Future Group on the 12th of August will be heard by a different bench. With the filing of SLP, there are a lot of things that are yet to be unravelled in the coming times and it will be interesting to see how the case unfolds. The foreign investors eyeing warily need to put up with lots of patience. However, it seems almost certain that the final judgment will set a precedent that many investors, multinational corporations, and legal professionals have been anticipating. 

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