Reliance-Future Deal on hold as Amazon Wins Arbitration Order. A Singapore arbitration panel has put on hold Future Group’s asset sale to Reliance of around $3.38 billion (approx Rs. 24,900 crores) asset sale to Reliance, an interim win for Amazon, which had alleged the deal between the Indian firms breached existing agreements.
Amazon received an interim order to halt the deal between both the companies until an arbitration tribunal is formed, as per a direct a source on the matter.
Amazon last year bought a 49 percent stake in Future Coupons, which owns a 7.3 percent stake in Future Retail. In August, Mukesh Ambani’s Reliance decided to buy retail, wholesale and some other businesses of Future Group in a deal valued at $3.38 billion (roughly Rs. 24,900 crores), including debt.
But Amazon’s investment came with contractual rights that include a right of first refusal and a non-compete-like pact, media had reported, and Amazon later started arbitration proceedings in Singapore for halting the deal.
“It’s a comprehensive victory for Amazon,” a source with direct knowledge of the decision said. “They’ve won an injunction to cease the deal of Reliance and Future group.”
Reliance Retail intends to complete the transaction under the terms of the agreement with Future Group without any delay, Reliance Retail (RRVL) said in an announcement on Sunday.
“RRVL has entered into the transaction for acquisition of assets and business of Future Retail Limited under proper legal advice and the rights and obligations are absolutely enforceable under Indian Law,” the statement added.
Two sources familiar with the matter said the temporary injunction was not automatically enforceable in India and that the order would have to be ratified by an Indian court.
In a statement, Amazon said: “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.”
Future Groups comment will come in future and was not immediately reachable for any remarks on the subject.