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Reliance-Future deal: Boost for Amazon as Supreme Court says Singapore arbitrator's decision enforceable in India Future Retail Asset Sale

Reliance-Future deal: Boost for Amazon as Supreme Court says Singapore arbitrator's decision enforceable in India

India Blooms News Service | @indiablooms | 06 Aug 2021, 03:49 pm

New Delhi/IBNS: The Supreme Court on Friday ruled that Reliance Retail and Future Retail cannot go ahead with their Rs 24,713 crore deal, in a boost to US-based e-commerce giant Amazon.

The Supreme Court ruled that the Singapore International Arbitration Centre’s (SIAC) award, staying the deal, holds good under Section 17 (1) of the Arbitration and Conciliation Act, the media reports said.

According to a Money Control report, the apex court's order does not deal with the merits of the Future Retail and Amazon's dispute but with questions of law that are academic in nature.

It is also expected that Future Retail will file a Special Leave Petition against Delhi High Court's order in March this year that stayed the sale of Future Group's retail assets to Reliance Retail, upholding SIAC's order, according to the report.

Justice JR Midha had ruled that Kishore Biyani-led Future Retail wilfully violated the ruling of Singapore arbitrator and directed it to not take forward Rs 24,713 crore  deal.

The three-member arbitration tribunal has heard the case and has yet to announce a final decision on the Reliance-Future deal.

The Money Control report said that Future Retail will appeal under Section 37 (2) before the Delhi High Court of the Arbitration and Conciliation Act against the arbitrator’s interim award to obtain relief to proceed with the deal, the people added.

“We welcome the verdict of the Hon’ble Supreme Court of India upholding the emergency arbitrator’s award,” an Amazon spokesperson said, the report said. “We hope that this will hasten a resolution of this dispute with Future Group.”


Background

On August 29, 2020, Future Group had announced the sale of its retail and wholesale assets to Reliance Retail Ltd for Rs 24,713-crore.

In August 2019, Amazon had bought 49 per cent stake in Future Coupons for Rs 1,500 crore.

Amazon has alleged that the 2019 Future-Reliance deal t indirectly owned about a 3.5 per cent stake in Future Retail.

Amazon said its 2019 deal with Future Group prevents it from selling the shares of Future Retail to RIL, its biggest rival in India, as the world's biggest e-commerce platform indirectly owns about a 3.5 per cent stake in Future Retail.

On October 25, 2020, it won an injunction to halt the sale from a Singapore arbitrator that both the entities had agreed to use in case of dispute.

The Court had written to BSE and SEBI to uphold the ruling.

Later, Amazon sent a legal notice to Future Coupons over its deal with Reliance.

In January, the Securities Exchange Board of India (SEBI) cleared the Rs 24,713 crore retail asset sale of Future Group to Mukesh Ambai-led Reliance Industries with conditions.

Future Group must specifically mention the case pending before the Delhi High Court and arbitration proceedings by the global e-commerce major Amazon contesting the deal, SEBI directed while issuing the clearance in January, 2021.

The Bombay Stock Exchange (BSE) had also granted its "no adverse observation" report, it added.

"The letters issued by BSE & NSE clearly state that comments of SEBI on the "draft scheme of arrangement" (proposed transaction) are subject to the outcome of the ongoing arbitration and any other legal proceedings. We will continue to pursue our legal remedies to enforce our rights," Amazon spokesperson had said post the development.

In December 2020, the Delhi High Court quashed Future Group's petition seeking its directive restraining Amazon from interfering in the asset sale to Reliance.