SIAC set for final hearing between Amazon and Future Group in July

The Singapore International Arbitration Centre (SIAC) is geared for a final hearing over a plea filed by Amazon against the Rs 24,713 crore deal between Future Group and Reliance Industries from July 2.

A tribunal was constituted, as per a regulatory filing by Future Consumer Ltd (FCL) on Saturday, by SIAC for arbitration proceedings related to the Future-RIL deal on January 5, 2021. The filing noted that Future Retail Ltd has filed two applications before the Tribunal, first being an application challenging their jurisdiction of the Tribunal, and second being an application for vacation of the Emergency Arbitrator Order.

The March quarter 2021 earnings filing by FCL said that as per the schedule finalized by the Tribunal, hearing for both the applications would commence on July 12, 2021. In August 2020, 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 scheme of arrangement entails the consolidation of Future Group’s retail and wholesale assets into one entity Future Enterprises Ltd and then transferring it to Reliance Retail. However, this deal has been contested by Amazon, an investor in Future Coupons that in turn, is a shareholder in FRL.

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The US-based Amazon, in August 2019 had agreed to purchase 49% of one of Future’s unlisted firms, Future Coupons Ltd (which owns 7.3% equity in BSE-listed Future Retail Ltd through convertible warrants), with the right to buy into the flagship Future Retail after a period of three to 10 years. Amazon had taken Future into arbitration at SIAC and in October, an interim award was passed by the EA in favor of the US e-commerce major that barred Future Retail from taking any step to dispose of or encumber its assets or issuing any securities to secure any funding from a restricted party.

Future Consumer Ltd, in its filing on Saturday, said both FRL and Amazon have filed suit and challenged each other’s position relating to the deal/EA order in various courts in India and the matter is sub-judice and currently pending with Indian Courts for disposal.  In April, RIL had extended the timeline for completing the deal with Future Group by six months to September 30, 2021. While the deal has received clearance from regulators such as CCI, SEBI and bounces, the scheme of arrangement is now awaiting the nod from the NCLT and shareholders.