- Future Retail approaches Delhi high court seeking relief against the SIAC order on Rs 24,713 crore business deal with Reliance Industries.
The dispute between Amazon and Future Group continues as Future Retail approached Delhi high court seeking relief against the Singapore-based arbitration centre (SIAC) stay order on its Rs 24,713 crore business deal with Reliance Retail.
The deal amounted to Rs 24,713 crore (or about $3.3 billion), in which Future Group was engaged to sell its wholesale, retail, logistics, and other businesses to Reliance Retail, allegedly violating the non-compete contract that it signed with Amazon last year.
On October 25, 2020, the Singapore arbitration court has given temporary relief to Amazon against its partner Future Group for selling some of its business operations to its rival Reliance Retail.
On the stock exchange notice, The Future Group has contended that Amazon is misusing the interim order that was passed by the Singapore-based arbitration centre on October 25, 2020.
Future Retail in the notice said Amazon is not involved in the transaction with Reliance Retail in any manner. However, Future Retail has made all entities, “parties to the suit which were parties to the arbitration proceedings, this includes the promoters of the company”, but has sought relief only against Amazon.
Earlier this week, Future Group had filed two caveat petitions in Delhi high court against Amazon, expecting that Amazon could approach the Delhi HC over the deal.
“The Company has inter-alia made all entities parties to the suit which were parties to the arbitration proceedings, this includes the promoters of the Company. It may be noted that the reliefs sought in the suit are only against Amazon,” the company said in a stock exchange filing.
Last year, Amazon had bought a 49% stake in Future Coupons Ltd. (Future Group unlisted firm) in which Future signed a non-compete contract. With this deal, Amazon got the right to buy Future Retail after a term period between 3 to 10 years.
Following, In August 2020, Future Group had announced its business deal with Reliance Retail Ventures Ltd.
On October 8, 2020, Amazon sent a legal notice to Future Group claiming that the company violated the contract agreement that it signed with Amazon last year.
Further, Amazon had moved to SIAC (Singapore arbitration centre) arguing that the Future Group had violated the contract terms. Later on October 25, SIAC passed a stay order on Future Group business deal with Reliance Retail.
Amazon then moved to Indian bourses urging them to consider SIAC judgment on the deal stay.
On November 1, 2020, Future Retail Pvt. Ltd. made a filing to the bourses, saying 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.
“The EA (Emergency Arbitrator) order is not enforceable under the provisions of the Arbitration and Conciliation Act, 1996, and is not binding on the company. Any attempt on the part of Amazon to enforce the EA Order shall be resisted by Future Retail Ltd. to the fullest extent available under Indian law. FRL is also in the process of taking appropriate legal action to protect its rights,” the company filing said.
As per SIAC, a three-member arbitration panel needs to be set up within 90 days with one judge each being appointed by Amazon and Future Group along with a third neutral judge.