Reliance Group and Future Retail have publicly stated that they will proceed with their deal “without any delay” even though Amazon obtained an injunction order against it from a Singapore arbitration court on October 25.
On Sunday evening, the Reliance Group said its deal to acquire Future Group’s assets is fully enforceable under Indian law and that it will complete the deal “without any delay”. On Monday, the Future Retail echoed Reliance Group, stating that it is not party to the agreement under which Amazon has invoked the arbitration proceedings. The deal is governed by Indian law, and would have to be tested under provisions of the Indian Arbitration Act in an appropriate forum, the company said.
“The matter raises several fundamental jurisdictional issues which go to the root of the matter,” the company said in a stock exchange filing. Future Group is likely to move the Delhi High Court in the next few days challenging the order, according to the Economic Times.
The interim order by the single-judge arbitration court in Singapore temporarily halted the planned sale of Future Group’s retail, wholesale, and logistics and warehousing business to Reliance Retail Ventures Ltd, a subsidiary of the Reliance Group, for ₹24,713 crore. Amazon had filed legal proceedings in the Singapore International Arbitration Centre (SIAC) against the deal, claiming the Future Group had breached the 2019 contract under which Amazon had acquired an indirect stake in Future Retail. In August 2019, Amazon had bought 49% equity stake in Future Coupons — which owned 7.3% stake in Future Retail — giving Amazon a 3.58% stake in Future Retail. Amazon was reportedly granted share transfer restrictions, right of first refusal, and a non-compete clause.
V.K. Rajah, the sole arbitrator, put the deal on hold, while an arbitration panel is formed to make a final decision. SIAC’s current order is valid for 90 days.
Reliance Retail’s acquisition of the Future Group’s businesses includes 1,800 stores across Big Bazaar, EasyDay, FBB, Food Hall spread over 400 cities in India, is a lump sum transaction at ₹24,713 crore. Reliance was to take over ₹19,000 crore of debt and liabilties owed by the Future Group.
The deal is awaiting regulatory approval at the Competition Commission of India. In a filing with the CCI, the companies had said, “The proposed transaction will not lead to any change in the competitive landscape or cause any appreciable adverse effect on competition in India, irrespective of the manner in which the relevant markets are defined.”