Amazon.com Inc won an interim award on Sunday 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.
Future Retail Ltd (FRL) in a statement on Monday said the company is examining the interim order approved by the Singapore International Arbitration Center (SIAC) in the arbitration proceedings invoked by Amazon under a shareholders agreement with the promoters. of the Future group.
FRL, which operates retail chains such as Big Bazar and Easy Day, said it is not a party to the agreement under which Amazon has invoked arbitration proceedings and that the agreement cannot be withheld through the arbitration process.
“FRL has been legally informed that actions taken by the FRL / its board, which are in full compliance with the relevant agreements and eminently in the interest of all interested parties, cannot be withheld in arbitration proceedings initiated under a agreement of which FRL is not a party, “said the FRL statement.
Based on advice received by FRL, all relevant agreements are governed by Indian law and the provisions of the Indian Arbitration Act for all purposes and this matter raises several fundamental jurisdictional issues that go to the root of the matter.
“Accordingly, this order will have to be proven under the provisions of the Indian Arbitration Act in an appropriate forum,” FRL said adding that “in any enforcement proceeding, FRL will take appropriate steps to ensure that the proposed transaction proceed without hindrance and without delay. ” .
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 carried out until it finally decides the matter, sources with direct knowledge of the development said.
Amazon, which had agreed to buy 49 percent of one of Future’s unlisted firms last year with the right to buy into flagship Future Retail Ltd after a three- to ten-year period, had taken Future into arbitration. after the indebted Kishore Biyani group firm. signed a pact to sell retail, wholesale, logistics and warehousing units to billionaire Mukesh Ambani’s Reliance.
“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,” the Amazon spokesman said Saturday.
Amazon believes Future Group violated the contract by signing a deal with rival Reliance.
The deal would have helped Reliance nearly double its presence as India’s largest retailer.
Meanwhile, RIL’s retail arm, Reliance Retail Ventures Limited (RRVL), has said that it intends to enforce its rights and complete the transaction in terms of the scheme and the Future Group agreement without delay.
“RRVL has entered into the transaction for the acquisition of assets and businesses of Future Retail Limited under proper legal advice and the rights and obligations are fully enforceable under Indian law. RRVL intends to enforce its rights and complete the transaction on terms of the scheme and agreement with the Future group without delay, “said RRVL.
With the dispute, Amazon is drawing battle lines with Reliance in the race for India’s estimated $ 1 trillion retail market, where online shopping is gaining ground. You need the Indian partner to strengthen its position after becoming the authorized online sales channel for Future Retail stores selling everything from groceries to cosmetics to clothing.
Amazon has sent a legal notice to Future Group, alleging that the retailer ₹The sale of assets of Rs 24,713 crore to Reliance Industries violated an agreement with the e-commerce giant and led the Future group company into arbitration.
Previously, on August 29, 2020, the Future group had announced the sale of its retail, wholesale and logistics, etc. to Reliance Retail Ventures Limited, the retail arm of Reliance Industries.
Amazon, last year, had bought a 49 percent stake in one of Future’s unlisted firms, Future Coupons Ltd, with the right to buy from the flagship Future Retail after a period of between three and 10 years. Future Coupons owns a 7.3 percent stake in Future Retail.
The fight between Future and Amazon comes at a time when Reliance has been strengthening its position in the country’s retail segment.
Reliance Retail Ventures Ltd, run 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 India’s largest, fastest growing and most profitable retail business, encompassing supermarkets, consumer electronics chain stores, cash wholesaling wholesale, fast fashion stores and the grocery online JioMart.
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