New Delhi: American e-commerce giant Amazon got a favourable ruling in Singapore with regard to the Future-RIL deal. Kishore Biyani’s Future Group has been told by the arbitration panel to not proceed with the deal with Mukesh Ambani’s Reliance Retail for now.
A one-man arbitration panel heard the plea of Amazon and Future Group last week.
"We welcome the award of the Emergency Arbitrator. We are grateful for the order which grants all the reliefs that were sought. We remain committed to an expeditious conclusion of the arbitration process," said the Amazon spokesperson.
The ruling was on Amazon’s request for an interim order before the arbitration hearings it initiated against the deal start. Judges will now be appointed for the main tribunal hearings, reported Bloomberg.
A source said a three-member arbitration panel, with Future and Amazon appointing one representative each and a third member being a neutral umpire, would decide on the dispute in 90 days, reported PTI. Amazon team was represented by Gopal Subramanium, Gourab Banerji, Amit Sibal and Alvin Yeo.
A hearing of the arbitration took place at the Singapore International Arbitration Centre on October 16 after Amazon had slapped a legal notice on Future Group, alleging that the retailer's ₹24,713 crore asset sale to Reliance Industries (RIL) violated an agreement with the e-commerce giant.
V.K. Rajah - the sole arbitrator in the Amazon vs Future vs Reliance arbitration matter - heard the matter on October 16.
Rajah is former Attorney General of Singapore.
The Future-Reliance deal was announced on August 29, 2020 in which Future Group had announced sale of its retail, wholesale and logistics etc to Reliance Retail Ventures Ltd (“RRVL"), the retail arm of RIL.
In the hearing, Future Retail side was represented by advocate Harish Salve, sources said.
Last year, Amazon had bought a 49 per cent stake in one of Future's unlisted firms, Future Coupons Ltd, with the right to buy into flagship Future Retail after a period between 3 and 10 years. Future Coupons owns 7.3 per cent stake in Future Retail.
The tussle between Future and Amazon comes at a time when RIL has been bolstering its position in the country's retail segment. RRVL- run by India's richest man Mukesh Ambani - has been on a fund raising spree and since September, it has raised ₹37,710 crore by selling stake in its retail arm.
RRVL operates India's largest, fastest-growing and most profitable retail business spanning supermarkets, consumer electronics chain stores, cash and carry wholesale business, fast-fashion outlets and online grocery store JioMart.
It operates about 12,000 stores in nearly 7,000 towns, with 640 million footfalls across core categories of grocery, consumer electronics and apparel. Revenues for Reliance Retail in 2019-20 stood at ₹1.63 lakh crore.
The investments equip Reliance Retail with funds to compete in both offline and online formats. The investments come as the country's retail sector prepares for the upcoming festive season and would help Reliance to launch an assault on rivals such as Walmart-owned Flipkart and Amazon.
Blocking Reliance’s rising stronghold on India’s retail sector is crucial for Amazon if it wants to dominate the only billion-people plus consumer market that’s still open to foreign firms.
With agency inputs
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