Future Group Defiant, Says SIAC Order Not Binding

  • SIAC ordered to put the RRVL-Future Group deal on hold.
  • Later, Amazon moved to bourses asking them to consider SIAC order.

Last year, Amazon had bought 49% stakes in Kishore Biyani’s Future Coupons Ltd. (Future Group unlisted firm) for Rs1,430 crore and had signed a non-compete contract.

Future Group reportedly was engaged with Reliance Industries to sell some of its business operations to Reliance Retail for Rs 24,713 crore (or about $3.4 billion). Amazon argues that the Future Group violated the contract by entering into the deal with rival Reliance Retail.

On October 25, the Singapore-based Arbitration Court ordered to put the RRVL-Future deal on hold. Later, Amazon India moved to stock exchanges, asking them to consider Singapore’s Arbitration Court order.

In response to Amazon’s appeal to SEBI, Future Group said Amazon’s contention on the Reliance-Future deal is misconceived.

Further, On Sunday, Future Group subsidiary, Future Retail Pvt. Ltd. said a Singapore emergency arbitrator’s order barring the sale of its assets to Reliance Retail Ventures Ltd. is not permissible under Indian law and is not binding on the company.

“Future Retail is advised that an emergency arbitrator (EA) has no legal status under Part I of the Indian Arbitration and Conciliation Act 1996 and, therefore, the proceedings before an “Emergency Arbitrator” are void and Coram non-judice,” Future Retail Pvt. Ltd. wrote to the stock exchanges, adding that any attempt on the part of Amazon to enforce the order will be resisted.

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The company further said that it is in the process of taking appropriate legal action to protect its rights, requesting the exchanges not to take cognizance of Amazon’s letter or the Singapore-based arbitrator’s order.

“Instead, the only parties to the arbitration agreement are Amazon and various promoters of Future Retail. Future Retail is not a party to the arbitration agreement and, as such, could not have been joined as a party to the arbitration proceedings before the Singapore International Arbitration Centre,” the company added.

Further, Reliance had said it entered into the deal with Future Group with the proper legal advice and the rights that are fully permissible under the Indian law.

“RRVL intends to enforce its rights and complete the pending deal in terms of scheme and agreement with the Future Group without any delay,” Reliance added.

Meanwhile, The BSE (Bombay Stock Exchange) decided to consult SEBI (Security Exchange Board Of India) to seek clarifications from Future Retail and Reliance Industries about the deal.

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