The Singapore International Arbitration Centre (SIAC) has ruled that Future Retail Ltd (FRL) is a “proper party” to the ongoing arbitration between Amazon and Future Coupons Pvt Ltd (FCPL) over Future’s plans to sell its assets to Reliance Retail. FRL had asked to be excluded from the arbitration.
FRL had argued that it had not signed any agreement with Amazon and maintained that it was promoter firm FCPL that had concluded a shareholder agreement with the US giant in 2019 when it invested about Rs 1,400 crore in FCPL, which owns 9.8% of FRL.
Three agreements were signed at the time of Amazon’s investment in FCPL. One was between Amazon and FCPL, another between FCPL and BSE-listed FRL and a third between FCPL and Future Group.
3 Pacts Must be Read Together
The SIAC said the three different agreements “must be read together,” a person familiar with the development said. The order came late on Wednesday. “The tribunal has opined that the three agreements must be read and construed as constituting a complex commercial transaction made up of multiple interdependent parts, executed with the view of achieving a common objective,” said the SIAC ruling, reviewed by ET.
In January, FRL had petitioned SIAC to exclude it as a party to the arbitration. Future had also asked the SIAC to lift an October 2020 stay that restrained FRL from selling its assets to Reliance Retail until the final outcome of Amazon’s petition.
“Each of the parties is bound by the FCPL SHA (shareholders agreement) arbitration agreement including FRL, notwithstanding its non-signatory status and the FCPL SHA arbitration agreement extends to disputes under the FRL SHA and SSA (share subscription agreement),” the Wednesday ruling further said. It appeared to the tribunal “at this stage that each of the parties to any three agreements is also bound by all the terms of the other agreements, this is a provisional view subject to further consideration.”
