Reliance Retail Ventures operates supermarkets and consumer electronics chain stores.
Future Retail said Monday it was reviewing an order against its deal with Reliance Industries. after an order from an arbitration panel suspended its sale of assets of Rs 24,713 crore to the conglomerate led by billionaire Mukesh Ambani. Future Group, led by billionaire Kishore Biyani, also said it will take action in the enforcement procedures to close the deal without delay, causing its shares to drop more than 3 percent and Reliance Industries more than 2 percent, which weighs on the broader national markets. The news comes as US-based e-retailer Amazon and conglomerate Reliance Industries battle for dominance in the country’s retail sector.
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“Actions taken by Future Retail Limited (FRL) or its board of directors cannot be withheld in arbitration proceedings initiated under an agreement to which FRL is not a party,” Kishore Biyani’s Future Retail said in a statement.
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Reliance Retail Ventures, part of Mukesh Ambani’s conglomerate Reliance Industries, also expressed its intention to close the deal without delay. The company said it “intends to assert its rights and complete the transaction under its agreement with Future Group.”
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Reliance Retail also said that the rights and obligations under the agreement are fully enforceable under Indian law.
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However, the temporary injunction is not automatically enforceable in India and the order would have to be upheld by an Indian court, Reuters news agency reported, citing two sources familiar with the matter.
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The Singapore-based single judge arbitration tribunal had reportedly prevented Future Retail from selling its retail business to Reliance Industries for Rs 24,713 crore.
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In approving an interim award in favor of Amazon, VK Rajah asked the Future group to put the deal on hold and said the deal cannot be finalized until it finally decides the matter.
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Amazon said it remains committed to “a speedy conclusion of the arbitration process,” grateful for the order granting all the reparations it had requested.
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Last year, Amazon bought a 49 percent stake in one of Future’s unlisted firms, Future Coupons, entitled to buy from Future Retail for a period of three to ten years. Future Coupons owns a 7.3 percent stake in Future Retail.
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However, in August, Future Group announced the sale of its retail, wholesale and logistics businesses to Reliance Retail Ventures, the retail arm of Reliance Industries.
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Reliance Industries, already the nation’s largest brick and mortar retailer, has plans for the online segment that would see it take on Amazon in what is a rising market. The group’s agreement to acquire the retail business of rival Future Group and its previous launch of JioMart, in May, were aimed at rivaling Amazon’s local unit and Walmart’s Flipkart in the country’s huge retail segment.
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