New Delhi: Kishore Biyani’s Future Group deal with Mukesh Ambani’s Reliance Industries Limited (RIL) has been put on hold by a Singapore court. Amazon.com Inc on Sunday won an interim award against its partner Future Group selling retail business to Reliance Industries Ltd for Rs 24,713 crore after a Singapore-based single judge arbitration panel put the deal on hold.Also Read - Amazon Halts Ban on Visa Credit Cards in UK From Jan 19
Amazon, which had agreed to purchase 49 per cent of one of Future’s unlisted firms last year with the right to buy into flagship Future Retail Ltd after a period of three years to 10 years, had dragged Future to arbitration after the indebted Kishore Biyani group firm signed pact to sell retail, wholesale, logistics and warehousing units to billionaire Mukesh Ambani’s Reliance. Also Read - 5 Life Lessons From 'Putham Pudhu Kaalai Vidiyaadha' To Help Viewers Keep Going
Passing an interim award in favour of Amazon, V K Rajah asked the Future group to put the deal on hold and said that the deal cannot go through until it finally decides the matter, sources with direct knowledge of the development said. Also Read - Putham Pudhu Kaalai Vidiyaadhaa: Makers Extend Gratitude For Accepting a Relatable Story
Confirming the development, an Amazon spokesperson said that the arbitration panel has granted the reliefs sought by it and expect an expeditious conclusion of the arbitration process.
“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,” the Amazon spokesperson said.
Amazon believes Future Group violated the contract by entering into the deal with rival Reliance.
The deal would have helped Reliance almost double its footprint as India’s largest retailer.
With the dispute, Amazon is drawing the battle lines with Reliance in the race for India’s estimated USD 1 trillion retail market, where online shopping is gaining ground. It needs the Indian partner to strengthen its foothold after becoming the authorized online sales channel for Future Retail’s stores that sell everything from groceries to cosmetics and apparel.
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.
Amazon team was represented by Gopal Subramanium, Gourab Banerji, Amit Sibal and Alvin Yeo. While Future Retail side was represented by advocate Harish Salve, sources said.
Earlier on October 16, the hearing was concluded by the arbitration panel at Singapore International Arbitration Centre.
Amazon has slapped a legal notice on Future Group, alleging that the retailer’s Rs 24,713 crore asset sale to Reliance Industries violated an agreement with the e-commerce giant and dragged the Future group firm into arbitration.
Earlier on August 29, 2020, the Future group had announced sale of its retail, wholesale and logistic etc to Reliance Retail Ventures Limited, the retail arm of the Reliance Industries.
Amazon, last year, 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 three and 10 years. Future Coupons owns a 7.3 per cent stake in Future Retail.
The tussle between Future and Amazon comes at a time when Reliance has been bolstering its position in the country’s retail segment.
Reliance Retail Ventures Ltd – run by India’s richest man Mukesh Ambani – has been on a fund raising spree and since September, it has raised Rs 37,710 crore 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 of Reliance Retail in FY20 stood at Rs 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 festival season and would help Reliance to launch an assault on rivals such as Walmart-owned Flipkart and Amazon.
(With agency inputs)