The Delhi High Court on Tuesday directed all respondents to maintain the status quo as on at 4:50 PM on till the pronouncement of the reserved order on the plea filed by Amazon seeking the enforcement of the Emergency Award, restraining Future Group from going ahead with its deal with Reliance.
A single-judge bench of Justice J.R. Midha while pronouncing the order through video conferencing noted, “this Court is of the prima facie view that the Emergency Arbitrator is an Arbitrator; the Emergency Arbitrator has rightly proceeded against the respondent No.2.”
The petition has been filed by Amazon seeking the enforcement of the Emergency Award, restraining Future Group from going ahead with its deal with Reliance stating the order passed by the Emergency Arbitrator “shall be deemed to be an order of the Court for all purposes and shall be enforceable under the Code of Civil Procedure.”
Senior Advocate Gopal Subramanium appearing for Amazon submitted that “the respondents have deliberately and wilfully violated and are continuing further with the violation of the order dated 25th October 2020 of the ‘ Emergency Arbitrator and immediate interim order be passed to protect the petitioner’s rights till the pronouncement of the reserved order.” It was further contended that any delay in the protection order would cause irreparable loss to Amazon.
However, when the court asked the respondents whether they are ready to withhold further action till the pronouncement of the order, counsel appearing for the respondents clearly declined, “without even blinking”. Whereas the bench took up the petitioner’s prayer for interim protection till pronouncement of the reserved order.
The bench noted that Amazon has invested Rs. 1431 Crores
“on the clear understanding that respondent No.2 would be the sole vehicle for its retail business and its retail assets would not be alienated without Petitioner’s consent and never to a Restricted Person, including the Mukesh Dhirubhai Ambani Group (“MDA Group”) and respondents No.3 to 13 would continue to remain the controlling shareholders of respondent No.2.”
“The respondents do not dispute that the agreements contain clauses restricting them from transferring the retail assets to the Restricted Person. However, the respondents have taken various steps/actions to transfer the retail assets to the restricted person, namely, MDA Group in violation of the order dated 25th October 2020 and they are continuing with it,” the bench further observed.
The bench was of the view that the order dated October 25 is appealable under Section 37 of the Arbitration and Conciliation Act. This Court is of the clear view that the order dated October 25 0 is enforceable as an order of this Court under Section 17(2) of the Arbitration and Conciliation Act. The detailed reasons shall be given in the reserved order.
The bench while directing the respondents to maintain the status quo till the pronouncement of the order noted,
“this Court is satisfied that immediate orders are necessary to protect the rights of the petitioner till the pronouncement of the reserved order.”
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The bench has also directed the respondents to file an affidavit placing the action taken by them after October 25, 2020 on record. The bench further directed all the respondents to maintain status quo with respect to all matters in violation of the order dated October 25, 2020 and shall file the status report with respect to the present status within 10 days of the receipt of this order, however, other prayers of Amazon will be considered in the reserved order.