ISSUING AN emergency order on a plea from global e-commerce giant Amazon, the Singapore International Arbitration Centre (SIAC) Sunday restrained Future Group and Reliance Industries Limited from proceeding with the Rs 24,713-crore deal signed in August for Future Retail to sell its retail, wholesale, logistics and warehousing units to Reliance Retail and Fashionstyle.
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.
They said that although Indian laws do not recognise the concept of international arbitration and emergency orders issued by such tribunals, the orders are usually “respected” by business houses.
However, Reliance Retail Ventures Ltd, a unit of RIL, said that it intends to “enforce its rights and complete the transaction in terms of the scheme and agreement with Future group without any delay”. The Future Group did not respond to queries from The Indian Express seeking comment.
“We welcome the award of the emergency arbitrator. We are grateful for the order, which grants all the reliefs that were sought. We remain committed to an expeditious conclusion of the arbitration process,” said a spokesperson for Amazon, which had objected to the deal citing contractual violations by the Future Group in an earlier agreement with it.
“If Future-RIL decide to go ahead with the deal within the next 90 days, Amazon will challenge and seek enforcement of the arbitration order,” sources said.
As part of the deal, Kishore Biyani-led Future Retail will also sell its supermarket chain Big Bazaar, premium food supply unit Foodhall, and fashion and clothes supermart Brand Factory’s retail and wholesale units, to Mukesh Ambani-owned Reliance Retail.
The deal, however, had run into legal trouble with Amazon claiming its “contractual rights” had been violated. Last year, Future Retail had signed a Rs 2,000-crore deal for Amazon to acquire 49 per cent stake in Future Coupons, the promoter firm of Future Retail.
According to Amazon, the deal had also given it a “call” option, which enabled it to exercise the option of acquiring all or part of Future Retail’s shareholding in the company, within three to 10 years of the agreement. It said the deal also required Future Group to inform Amazon before entering into any sale agreement with third parties.
After Future’s agreement with Reliance, Amazon said the deal was a violation of a non-compete clause and a right-of-first-refusal pact. On its part, the Future Group had said that it had not sold any stake in the company, and was merely selling its assets and therefore not violated any terms of the contract.
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