New Delhi: American e-commerce giant Amazon obtained a favorable ruling in Singapore regarding the Future-RIL deal. The arbitration panel has told Kishore Biyani Future Group not to proceed with the deal with Mukesh Ambani’s Reliance Retail for now.
A one-man arbitration panel heard the argument from Amazon and Future Group last week.
“We welcome the award of the Emergency Arbitrator. We are grateful for the order granting all the reparations that were requested. We remain committed to a speedy conclusion of the arbitration process,” said the Amazon spokesperson.
The ruling was based on Amazon’s request for an interim order before the arbitration hearings it initiated against the initiation of the deal. The judges will now be appointed for the main court hearings, reported Bloomberg.
An arbitration hearing was held at the Singapore International Arbitration Center on October 16 after Amazon had sent a legal notice to Future Group, alleging that the retailer ₹The sale of assets of Rs 24,713 crore to Reliance Industries (RIL) violated an agreement with the e-commerce giant.
VK Rajah, the sole arbitrator in the Amazon vs Future vs Reliance arbitration matter, heard the matter on October 16.
Rajah is a former Singapore Attorney General.
The Future-Reliance deal was announced on August 29, 2020 in which Future Group had announced the sale of its retail, wholesale and logistics etc. to Reliance Retail Ventures Ltd (“RRVL”), the retail arm of RIL.
At the hearing, Future Retail’s side was represented by advocate Harish Salve, the sources said.
Last year, Amazon had bought a 49 percent stake in one of Future’s unlisted companies, Future Coupons Ltd, with the right to buy from the flagship Future Retail after a period of 3-10 years. Future Coupons owns a 7.3% stake in Future Retail.
The fight between Future and Amazon comes at a time when RIL has been strengthening its position in the country’s retail segment. RRVL, led by India’s richest man Mukesh Ambani, has been on a fundraising spree and since September has raised ₹Rs 37,710 crore from selling stake in its retail arm.
RRVL operates the largest, fastest growing and most profitable retail business in India, encompassing supermarkets, chain consumer electronics stores, wholesale cash wholesale businesses, fast fashion stores and the grocery store online JioMart.
It operates around 12,000 stores in nearly 7,000 cities, with 640 million visitors in the major categories of groceries, consumer electronics, and clothing. Reliance Retail’s revenues in 2019-20 stood at ₹Rs 1.63 million lakh.
The investments provide Reliance Retail with funds to compete both offline and online. The investments come as the country’s retail sector gears up for the upcoming holiday season and would help Reliance launch an assault on rivals such as Flipkart and Walmart-owned Amazon.
Blocking Reliance’s growing strength in the Indian retail sector is crucial for Amazon if it wants to dominate the single market of billions more people that is still open to foreign companies.
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