The legal battle between Future Group and Amazon.com Inc. over the ₹The 24,713 crore settlement with Reliance Industries Ltd (RIL) is growing like a snowball, with the two litigants adopting the dual strategy of taking the case in the Indian courts and the Singapore arbitration court.
While Kishore Biyani’s Future Retail filed a lawsuit against Amazon in Delhi’s high court to prevent it from interfering in the RIL-Future deal, the American retail giant has urged immediate intervention by regulators Securities and Exchange Board of India (Sebi ) and the Competition Commission. of India (CCI) in an attempt to stop the deal.
The US e-commerce giant accuses Future Retail of violating procurement rules, perpetuating fraud, misleading investors, ignoring the Singapore International Arbitration Center (SIAC) award and acting against small shareholders of the indebted Future Group to benefit the group promoter. Biyani.
Future Group and Amazon have been blaming each other on various charges regarding the legitimacy of the Future-RIL deal. The Delhi high court is hearing from Amazon on Future Retail’s statement that seeks to prevent the US group from approaching Sebi and CCI against the deal.
Future’s argument is that Future Retail and Future Coupons Pvt. Ltd are two independent companies and Amazon should not interfere in the agreement between FRL and RIL.
Future wants to follow the whole case in two different ways because the Amazon deal was agreed by Future Coupons, while the RIL deal involves a sale of assets by Future Retail to RIL.
His case in the Delhi High Court is to secure Future Retail approval to go ahead with the RIL deal.
Simultaneously, both parties agreed to continue their arbitration battle at SIAC, according to two people familiar with the matter.
This is despite the fact that Future asserted in the Delhi High Court and before Sebi that SIAC has no power to rule on the matter and that its provisional ruling is not legally effective.
On October 25, SIAC granted interim relief in favor of Amazon and prevented Future from selling any retail assets or even seeking regulatory permission to sell the retail business to RIL.
“Now both Amazon and Future are in the process of appointing their members to create the three-member arbitration panel at SIAC,” said the first person quoted above.
One member from each will be appointed by Amazon and Future, while the panel chair will be jointly shortlisted by the panel members.
“After the formation of the panel, the hearing at SIAC is likely to start next week and a ruling is expected within 45-60 days,” said this person.
While in the Delhi high court Future will seek approval from Future Retail to go ahead with the RIL deal, at SIAC he wants to get a favorable judgment for future Future Group coupons and promoters.
At SIAC, Future Coupons wants a lawsuit that frees the Future Group promoter to make any decision to sell any of the group’s assets to anyone. He wants the group not to be seen as an entity that ignores contractual obligations or arbitration laws.
On August 12, 2019, Amazon had acquired 49% of FCPL, which then acquired a 7.3% stake in FRL. This gave Amazon an indirect 5% stake in FRL.
The FCPL agreement states that FCPL and the promoters cannot make any transfer of FRL retail assets without permission from Amazon.
“The fact that the funds for the promoters to invest in FRL may have been obtained from Amazon does not give the latter any legal or contractual rights against FRL,” says FRL.
Amazon, in a November 8 letter to Sebi accused FRL of engaging in insider trading and violating procurement regulations. He asked the market regulator to launch an investigation, take action and suspend the RIL-Future deal.
.
