Amazon-Future Hearing #4: Future Did not Transfer its Assets, was Forced to Surrender LeaseAmazon-Future-Reliance Dispute
On April 1st 2022, a Bench composed of Chief Justice N.V. Ramana and Justices A.S Bopanna and Hima Kohli, continued to hear the Amazon-Future-Reliance dispute. The Bench is deciding whether to resume the arbitration proceedings between Future Retail and Amazon before the Singapore International Arbitration Tribunal (SIAC).
In the previous hearing, Senior Advocate Mr. Gopal Subramaniam, appearing for Amazon argued that the Court’s decision on the arbitration will be meaningless if Reliance continues to acquire Future Retail’s assets—there will be nothing left for Amazon to fight for.
Today’s hearings began with Ramana CJI confirming whether Amazon, Future Retail, and Future Coupon all agreed with the direction of the key issue at hand—the continuation of arbitration at SIAC. The parties agreed, and moved on to discuss whether the Court would issue an injunction to stop Future Retail from alienating its property.
Senior Advocate Mr. Harish Salve appearing for Future Retail vehemently insisted that the company was deeply affected by the second and third waves of COVID-19. Mr. Salve claimed that it was driven to bankruptcy, and unable to pay for store leases. The landlords of Future’s stores had asked Future Retail to vacate the premises and terminate the lease. 835 stores were lost this way, many of which were later acquired by Reliance.
Meanwhile, in February 2022, the banks declared Future Retail as a non performing asset. With its bank accounts frozen, Future Retail was unable to pay the landlords. Mr. Salve concluded that Future Retail was not actively transferring property—rather, it was forced to forgo its stores. An injunction passed by the Court to stop asset transfers would be inapplicable, as there are no transfers taking place, only the mere surrendering of assets.
Upon discovering that 374 stores remained with Future Retail, Kohli J inquired on their status. Was Future Retail defaulting on those payments? Are they in the process of terminating the leases? Mr. Salve exclaimed that Future Retail was ‘hanging by a thread’ with these stores, and were hoping to extend the lease as long as possible.
With the intention of refocusing the Court’s attention to the matter at hand, Senior Advocate Mr. Mukul Rohatgi appearing for Future Coupon added that the interlocutory application was completely beyond the scope of this case. The parties had approached the Court for the continuation of arbitration proceedings, not for the transfer of property between them. Mr. Rohatgi argued that the transfer of stores between Future Retail and Reliance was not in discussion in the present case.
Mr. Subramaniam asked the Court for 45 minutes to respond to these arguments. Citing the paucity of time, Ramana CJI tabled the matter for Monday (April 4th 2022).