Amazon gets Singapore arbitrator to stall Future-Reliance deal
26 Oct 2020
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Online retailer Amazon has secured a favourable ruling from the emergency arbitrator at Singapore International Arbitration Centre (SIAC) against the sale of Kishore Biyani controlled Future Group and Future Coupons that owns Big Bazaar and other retail outlets to Reliance Industries.
In its order the Emergency Arbitrator has barred Future Group from entering into any transaction with any party other than Amazon within or outside India.
“The Respondents (Future Retail and Future Coupons) are injuncted from taking any steps in furtherance to the board resolution of August 29, 2020 in relation to the transaction with Reliance, ,including but not limited to, filing or pursuing any application before any body or agency in India,” the arbitrator stated.
The respondents are injuncted from taking steps to complete the transaction with entities which are part of the Mukesh Dhirubhai Ambani Group, the arbitrator stated.
Responding to the development, Reliance Industries Said, “Reliance Retail Ventures Limited (RRVL) is informed of an interim order passed by the Emergency Arbitrator in the arbitration proceedings invoked by Amazon under a shareholders’ agreement with the promoters of Future group. RRVL has entered into the transaction for acquisition of assets and business of Future Retail Limited under proper legal advice and the rights and obligations are fully enforceable under Indian Law. RRVL intends to enforce its rights and complete the transaction in terms of the scheme and agreement with Future Group without any delay.”
Senior Advocate Gopal Subramanium appeared for Amazon and was advised by P&A Law Offices and AZB & Partners.
Senior Advocate Harish Salve appeared for Future Group, and was briefed by Trilegal and Naik & Co.
SIAC has an option where even though a Tribunal is not in place or where formation of tribunal may take some time, one can request a Emergency Arbitrator to grant interim reliefs. Amazon invoked this clause under the SIAC Rules.
According to Amazon which owned 5 per cent in Future Coupons in a deal where it invested Rs1,430 crore in 2019, there is a negative list of 30 entities with whom Future Group cannot transact. One of the 30 entities was the group of Mukesh Dhirubhai Ambani Group.
The interim relief means that Future Group cannot sell its business to Reliance Retail, which had agreed to acquire the business for Rs24,713 crore.
Reliance Retail Ventures Limited, subsidiary of Reliance Industries Limited, had in August 2020 acquired the retail and wholesale business and the logistics and warehousing business of Kishore Biyani's Future Group.
