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SINGAPORE (BLOOMBERG) – Amazon.com got relief in its dispute with Future Group after a court temporarily suspended the Indian conglomerate’s US $ 3.4 billion (S $ 4.6 billion) deal to sell assets to billionaire Mukesh Ambani’s Reliance Industries .
An arbitration court in Singapore prevented Future Retail and its founders from going ahead with the sale, according to people with knowledge of the matter who asked not to be identified as the procedures were private. The ruling was based on Amazon’s request for a provisional order before the main court hearings begin.
In a statement released Sunday night (October 25) in Mumbai, the US e-commerce giant said it got all the relief it sought, without providing details.
“We welcome the award of the Emergency Arbitrator,” Amazon said. “We remain committed to a speedy conclusion of the arbitration process.”
Representatives for Future Group, which has a partnership with Amazon in India, immediately declined to comment when contacted outside of business hours in India.
Ruling brands provide a breathing space for Amazon in its bid to stop a deal that could give Ambani, Asia’s richest man, unprecedented dominance in the race for India’s $ 1 trillion consumer retail market. Reliance is already India’s largest brick and mortar retailer and has ambitious plans for the online segment that would see it take on Amazon in what is a rising market.
Battle lines
Amazon drew the battle lines earlier this month when it accused Future of violating a contract between the two parties by accepting a purchase from Reliance. The deal would have been a bailout for Future, which faces another possible cash shortage as competition intensifies in the Indian retail sector and the economy slows amid the coronavirus pandemic.
A spokeswoman for the US e-commerce giant told Bloomberg on October 8 that it had taken steps to enforce its contractual rights with Future, without elaborating. The Reliance-Future deal, announced at the end of August, is awaiting regulatory approval, which will not necessarily be delayed by the Singapore court order.
Amazon agreed to buy 49 percent of one of Future’s unlisted firms last year, entitled to buy its flagship, Future Retail, after a period of three to 10 years. But about two months ago, rival Reliance announced that it would buy the retail, wholesale, logistics and warehousing units of the indebted Future Group, nearly doubling its footprint.
In May, Amazon was considering increasing its stake in Future’s retail unit to 49 percent, people familiar with the matter at the time said. But that transaction did not materialize in time for Future, instead he saw it close a deal with the refining and retail conglomerate Ambani.
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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