India’s top court ruled August 6 in favour of Amazon in a dispute with Future Retail. This comes as a setback for the Rs 24,713 crore deal between Reliance Retail and Future Group, which Amazon had objected to in multiple courts.
The Supreme Court said the Singapore International Arbitration Centre’s award staying the deal holds good under Section 17 (1) of the Arbitration and Conciliation Act. The SIAC had barred the deal from proceeding in October 2020 and had constituted a three-member panel to pass the final verdict, which is awaited.
People familiar with the case said the apex court’s verdict does not deal with the merits of the dispute between Future Retail and Amazon, but with questions of law, which are academic in nature.
Future Retail is expected to file a special leave petition before the Supreme Court against an order of Delhi High Court justice JR Midha in March this year, which upheld the decision of the SIAC emergency arbitrator.
The Kishore Biyani-led company will also file an appeal under Section 37 (2) of the Arbitration and Conciliation Act against the arbitrator’s interim award before the Delhi High Court to obtain relief to proceed with the deal, the people added.
“We welcome the verdict of the Hon’ble Supreme Court of India upholding the emergency arbitrator’s award,” an Amazon spokesperson said. “We hope that this will hasten a resolution of this dispute with Future Group.”
Meanwhile, lenders to Future Group companies Future Retail, Future Enterprises and Future Lifestyle Retail have implemented a restructuring plan for the loans of the respective companies. The loan recast was extended under the Reserve Bank of India’s August 6, 2020, circular for the Resolution Framework for COVID-19-related stress.
The restructuring scheme also received the KV Kamath Committee’s approval in April as a ‘back-up plan’ to the group’s deal with Reliance Retail since the matter had been ongoing in the courts.
The apex court’s order comes almost a year after Reliance Retail announced the acquisition of Future Group’s retail and wholesale assets and the logistics and warehousing businesses by way of a slump sale. Amazon, which had acquired a 49 percent stake in Future Retail’s promoter entity Future Coupons in December 2019, objected to the deal, saying it went against its agreement with the Future Group.
The e-commerce giant challenged the deal in the arbitration court as well as the Delhi High Court and subsequently the Supreme Court, saying Future Retail was in breach of their contract. A three-member panel at the SIAC heard arguments from both sides in July and their verdict is still pending.
Amazon also objected when Reliance Industries and Future Group companies approached the National Company Law Tribunal seeking its nod to obtain shareholder approvals for the deal. NCLT’s Mumbai bench has heard arguments in the matter and has reserved its orders.
Biyani moved to sell Future Group’s assets to Reliance Retail after operations suffered under the national lockdown imposed during the first wave of Covid-19 last year. In a letter to Amazon in January this year, Biyani blamed the e-commerce company for not supporting the group during difficult times and said if the transaction with Reliance/Mukesh Dhirubhai Ambani (MDA) Group was not finalised, Future Retail would have inevitably faced insolvency and/or liquidation, leaving Amazon with nothing.
Amazon responded and said it was incorrect to say that it had not offered to help Future Retail.
“There were ongoing discussions on multiple options with partners on the one hand and with the promoters of Future on the other including a signed term sheet,” Amazon had said.Disclosure
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