On Amazon’s plea, Singapore tribunal stalls Future-RIL deal

Marco Green
October 26, 2020

"We remain committed to an expeditious conclusion of the arbitration process".

Amazon.com Inc on Sunday won an interim award against its partner Future Group selling retail business to Reliance Industries Ltd for Rs 24,713 crore after a Singapore-based single-judge arbitration panel put the deal on hold.

Legal sources told The Indian Express that the order, issued by an emergency arbitrator of SIAC, will be valid for the next 90 days until an official arbitration panel is appointed.

"We welcome the award of the Emergency Arbitrator", Amazon said.

In a statement issued late Sunday (Oct 25) in Mumbai, the USA e-commerce giant said it got all the relief it sought, without providing specifics.

Passing an interim award in favour of Amazon, VK Rajah asked the Future Group to put the deal on hold and said that the deal can not go through until it finally decides the matter, sources with direct knowledge of the development told Moneycontrol.

In August, Mukesh Ambani's Reliance chose to buy retail, wholesale and some other businesses of Future Group in a deal valued at $3.38 billion (roughly Rs. 24,900 crores), including debt.

The American e-commerce group, which indirectly bought a 3.58% stake in Future Group's Future Retail business a year ago, reached out to the Singapore International Arbitration Centre earlier this month to block what could emerge as the largest retail deal in India. "FRL is examining the communication and the order", it said in a press release. However it further added that Future Retail is not party to the agreement under which Amazon has invoked arbitration proceedings.

Amazon believes Future Group violated the contract by entering into the deal with rival Reliance.

The Indian Express is now on Telegram. Future Coupons is the promoter-entity of India's second-largest retail chain Future Retail and owns a 7.3% stake in the company.

The global retail giant had agreed to purchase 49 per cent of one of Future's unlisted firms in 2019, and has argued that despite being owning a stake in Future Coupons, it was not given the Right of First Refusal (RoFR) in the Reliance Retail Ventures (RRVL)-Future Group deal.

Amazon, Walmart's Flipkart, and Ambani's Reliance Industries (which operates Reliance Retail), the most valuable firm in India, are locked in an intense battle to command the Indian retail market. On the other hand, Kishore Biyani's Future Retail Ltd share price plunged 9.3 per cent to Rs 70.55 apiece.

On October 16, following a hearing of the arbitration at the SIAC, the Jeff Bezos-led company had slapped a legal notice on Future Group, alleging that the retailer's Rs 24,713 crore asset sale to RIL violated an agreement with the e-commerce giant.

The investments equip Reliance Retail with funds to compete in both offline and online formats.

The shares of Reliance Industries and Future Retail cracked 2% and 6% during the early trading hours on Monday.

Other reports by Click Lancashire

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