In a major victory for Amazon and a setback to Future Group, the Delhi High Court on Monday declined to grant Kishore Biyani-led company's plea for an interim injunction restraining the e-commerce giant from writing to SEBI, CCI and other authorities about the arbitral order against its asset sale.
Justice Mukta Gupta passed the order on Future Retail Ltd's (FRL) plea claiming that Amazon writing to the authorities about the emergency arbitrator's award amounts to interfering with the Rs 24,713 crore Reliance-Future deal.
The Singapore International Arbitration Centre (SIAC) on October 25 had passed an interim order in favour of Amazon barring FRL from taking any step to dispose of or encumber its assets or issuing any securities to secure any funding from a restricted party.
Subsequently, Amazon wrote to market regulator SEBI, stock exchanges and the Competition Commission of India (CCI), urging them to take into consideration the Singapore arbitrator's interim decision as it is a binding order.
What is Singapore International Arbitration Centre (SIAC) order?
Amazon.com Inc in October 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.
Amazon, which had agreed to purchase 49% of one of Future's unlisted firms last year with the right to buy into flagship Future Retail Ltd after a period of three years to 10 years, had dragged Future to arbitration after the indebted Kishore Biyani group firm signed pact to sell retail, wholesale, logistics and warehousing units to billionaire Mukesh Ambani's Reliance.
Reliance Retail Ventures Limited (RRVL) has, however, announced that it will complete the transaction in terms of the scheme and agreement with Future group without any delay.
Passing an interim award in favour of Amazon, single-judge arbitration panel of VK Rajah asked the Future group to put the deal on hold and said that the deal cannot go through until it finally decides the matter, sources with direct knowledge of the development said.
What Amazon-Reliance dispute over Future Group?
Amazon has slapped a legal notice on Future Group, alleging that the retailer's Rs 24,713 crore asset sale to Reliance Industries violated an agreement with the e-commerce giant and dragged the Future group firm into arbitration.
Earlier on August 29, 2020, the Future group had announced sale of its retail, wholesale and logistic etc to Reliance Retail Ventures Limited, the retail arm of the Reliance Industries.
Amazon, last year, had bought a 49% stake in one of Future's unlisted firms, Future Coupons Ltd, with the right to buy into flagship Future Retail after a period between three and 10 years. Future Coupons owns a 7.% stake in Future Retail.
The tussle between Future and Amazon comes at a time when Reliance has been bolstering its position in the country's retail segment.
Amazon believes Future Group violated the contract by entering into the deal with rival Reliance.
The deal would have helped Reliance almost double its footprint as India's largest retailer.