Gujarat Exclusive > National-World > SC upholds stay on Reliance-Future Retail deal; big win for Amazon

SC upholds stay on Reliance-Future Retail deal; big win for Amazon

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  • Future Retail to explore legal remedies to finalize the deal   

New Delhi: The Supreme Court of India has upheld the single-judge bench stay order on the sale of Future Retail Ltd (FRL) to Mukesh Ambani-led Reliance group. The order comes in favour of Amazon which has been embroiled in a bitter battle Reliance over the latter’s attempt to acquire India’s second largest, and now distressed, supermarket chain.

The Future Retail has indicated that it will explore all legal remedies to ensure the deal is finalized.

Amazon has a stake in an unlisted Future unit. The e-commerce giant had approached the Singapore arbitration court, accusing the latter of violating a contract after it agreed to sell its wholesale, warehousing and other retail assets to the Reliance group last year.

Welcoming the verdict, an Amazon spokesperson said, “Amazon spokesperson: “We welcome the verdict of the Hon’ble Supreme Court of India upholding the Emergency Arbitrator’s award. We hope that this will hasten a resolution of this dispute with Future Group.”

Soon after the verdict, the shares of Future Group fell.

 

 

The case

Amazon had purchased 49% stake in Future Coupons. FRL was a subsidiary of Future Coupons. Last year in August, Future Retail board cleared a deal of nearly Rs 25,000 with Reliance group after the company suffered major losses in the first wave of the Covid-19 pandemic.

Subsequently, Amazon approached Singapore-based Emergency Arbitrator which put a stay on the deal in October 2020. Two months later, Future Retail approached Delhi High Court which held Amazon’s move as an interference, ruling that the decision by the FRL board was valid.

Following a petition by Amazon in January this year, seeking enforcement of the order by the Emergency Arbitrator, the Delhi HC gave interim status quo order. This was challenged by the Future Retail.

Following more hearings and challenges on this matter, in March this year, the Delhi HC ordered that the Emergency Arbitrator’s order was to be followed. It also held Future Group founder Kishore Biyani guilty of wilful disobedience.

This order was stayed by a larger bench of Delhi HC, which allowed the deal to proceed. However, Amazon then knocked at SC’s door challenging this order in April this year.

 

What SC said

Upholding the order of the single-judge bench of the Delhi HC, the Supreme Court said that the order of the Emergency Arbitrator was enforceable.

 

Future Group to look for remedies

Hours after the SC verdict, Future Retail said in a stock exchange filing, “FRL is advised that it has remedies available in law, which it will exercise.” It said it would look at all options to see through its deal with Reliance.

It is also likely to file a special leave petition challenging the order of the single-judge bench of Delhi HC.

 

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