New Delhi: The Singapore-based arbitrator, SIAC, has rejected Future Retail’s plea to lift the interim stay on its Rs 24,713-crore deal with Reliance Retail, giving a major relief to Amazon that is contesting the transaction.
The development comes a day after the Singapore International Arbitration Centre (SIAC) held that Future Retail is a party to the ongoing arbitration between Amazon and Future group in the dispute over the sale of its assets to Reliance Retail.
Future had contended before the SIAC that it should be excluded from arbitration proceedings because it is not a party to the dispute between its promoter Future Coupons Pvt Ltd (FCPL) and Amazon.
In a regulatory filing on Friday, Future Retail Ltd (FRL) said it has received SIAC’s decision dated October 21, 2021 on its plea to vacate the Interim Award of the Emergency Arbitrator dated October 25, 2020.
“The Tribunal is satisfied that the orders set out in the EA Award were correctly granted, and have not been vitiated by any subsequent events or proceedings. Further or alternatively, the Respondents have not demonstrated that circumstances have materially changed to justify any change to the EA Award,” the filing said.
It added that the company would be deciding on its future course of action based on the legal advice and available remedies in law.
Amazon, which is trying to block Future’s Rs 24,713-crore sale of its retail, wholesale, logistics and warehousing assets to Reliance Industries’ retail arm, has alleged that the Reliance Retail Ventures Ltd (RRVL)-Future deal breaches its own pact of 2019 with the Kishore Biyani-led company.
“The Tribunal’s decision to reject the Application to Vacate the EA Award has reaffirmed the grounds of the Emergency Arbitrator in specifically injuncting any application by FRL (and the other Respondents) from taking any steps in relation to the Impugned Transaction including the filing and pursuing of any application before the NCLT. Accordingly, the basis for FRL’s request for the order described in Application has also vanished,” the filing said.
When contacted Amazon did not comment over the development. In October 2020, an interim award was passed by the EA in favour of the US e-commerce major Amazon that barred FRL from taking any step to dispose of or encumber its assets or issuing any securities to secure any funding from a restricted party.
In August last year, Reliance Retail Ventures Ltd had said it will acquire the retail and wholesale business, and the logistics and warehousing business of Future Group for Rs 24,713 crore. The deal has been contested by Amazon, an investor in FCPL that in turn is a shareholder in FRL.
In August 2019, Amazon had agreed to purchase 49 per cent of one of Future’s unlisted firm, Future Coupons Pvt Ltd (which owns 7.3 per cent equity in BSE-listed Future Retail through convertible warrants), with the right to buy into the flagship Future Retail after a period of 3 to 10 years.
After Future’s deal with Reliance Retail Ventures Ltd (RRVL) in August last year, Amazon had dragged Future into arbitration at SIAC.
In October 2020, an interim award was passed by the Emergency Arbitrator (EA) in favour of the US e-commerce major that barred FRL from taking any step to dispose of or encumber its assets or issuing any securities to secure any funding from a restricted party.
Amazon and Future have also filed litigations in Indian courts, including the Supreme Court, on the issue. The apex court had recently ruled in favour of Amazon by holding that the EA award was valid and enforceable under Indian laws.
Earlier this week, Amazon had filed an interim application before the Supreme Court of India to stay the order passed by the Mumbai Bench of the National Company Law Tribunal allowing Kishore Biyani-led Future Group firms to hold meetings of its shareholders and creditors to seek approval for the sale of assets to RRVL.
As per the regulatory filing of the several Future Group firms including FRL, the meeting of shareholders and creditors will take place on November 10 and 11.