Setback for Future Group, Delhi High court refuses to restrain Amazon

The Delhi High Court today refused to restrain Amazon from interfering in Furture Retail’s deal with Reliance Retail by writing to statutory authorities. This setback comes after an Emergency Arbitrator of the Singapore International Arbitration Centre (SIAC) restrained Furture Group from taking any steps in furtherance of transaction with Reliance Retail.

Future Retail Ltd (FRL) had announced its deal with Mukesh Ambani’s Reliance Retail Ventures Limited earlier this year. Amazon had invoked arbitration on the ground that Mukesh Dhirubhai Ambani Group of companies featured in the negative list of 30 entities with which Future Group could not transact. The dispute relates to Future’s sale of its retail, wholesale and warehousing assets to Reliance Industries Limited (RIL) for Rs 24,713 crore. Amazon owns a five per cent indirect stake in Future Retail and had contested the sale in the Singapore court. As such, the Singapore Court, on October 25, had restrained the latter from selling its assets to RIL.

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Reliance supported FRL’s case before the High Court. It argued that Amazon was playing mischief by stalling the deal that would save FRL from going under. The Indian retailer asserted that all necessary parties and entities had already given consent to the scheme of transfer of assets. However, the global retail giant argued that the “ship of arbitration has sailed” in the present case, and thus, the present suit was not maintainable. It stated that the Emergency Award was binding on all parties as it was duly recognized under Part I of the Arbitration Act.

In August 2019, the global e-commerce giant had bought 49 per cent in one of Kishore Biyani-led Future Group’s unlisted firms – Future Coupons Ltd with the right to buy into the listed flagship FRL after a few yearsm if the government were to undo its bar on foreign ownership of multi-brand retailers.