Author - Priyam Mukherjee
Delhi court has blocked the Future- Reliance $3.4 billion deal sale after US online giant Amazon raised objections last year stating a 2019 deal it had with a unit of Future which holds clauses prohibiting Reliance Retail from selling to anyone on a “restricted person” list including Reliance.
It all began in August last year when Mukesh Ambani’s RIL signed a deal for the sale of Future Group’s retail, wholesale, logistics and warehousing units to Reliance Retail Ventures Limited. The Jeff Bezos’s Amazon dragged Future Group at SIAC arguing that the company violated its contract by entering into a deal with rival Reliance.
Amazon, which holds 49% stake in a Future Group arms, Future Coupons, has accused the group of violating breaching terms of a contract which states that it requires US giants’ recommendations in order to raise money or sell a stake to another company. The agreements list five to six companies, including Reliance Industries, that Amazon has drawn.
Delhi High Court’s viewpoint:
Earlier Delhi HC states that it is “clear view” that the Emergency Award (EA) by the Singapore International Arbitration Centre (SIAC) is enforceable in India just giving relief to Amazon. The EA has stayed the Future – RIL deal in October 2020. Amazon mentioned in the petitions that Future was constantly and maliciously ignoring the SIAC order to close the RIL deal by obtaining clearances from authorities.
The court stated “All the concerned authorities are directed to maintain status quo with respect to all matters in violation of the order dated 25th October 2020, and shall file the status report with respect to the present status within 10 days of the receipt of this order,” said the order by Justice JR Midha.”
Amazon and Future viewpoint:
Amazon proposed that is opened to hold talks to resolve all disputes during the Court proceedings, but Future Group was not interested to hold any such discussions.
The Future Group spokesperson responded to Delhi HC order "The company will explore all legal remedies and take appropriate steps to pursue the scheme of the arrangement,"
The Future Retail has filed an application with the National Company Law Tribunal (NCLT) seeking approval for its deal with RIL. Market Regulator SEBI has given the conditional nod, while the Competition Commission of India (CCI) has cleared the deal.