Mumbai: In a major setback to the Rs 24,713 crore deal between Mukesh Ambani-led Reliance Industries and Kishore Biyani-led Future Group, the Supreme Court on Friday upheld e-commerce giant Amazon’s plea.
The Supreme Court ruled that an order issued in October by a Singaporean arbitrator, which halted the deal after finding merit in Amazon’s objections, was valid.
In the judgment, a two-judge bench of Justices Rohinton Fali Nariman and BR Gavai read that appeals filed by multi-nationals are permissible. The apex court bench said, “We have framed and answered two questions as the decision of the emergency arbitrator is sound and can be enforced under section 17(2). Appeal is permissible.” ABP News reviewed the copy of the order.
When asked for comments, an Amazon spokesperson said in an e-mail reply to a question by ABP News, “We welcome the decision of the Hon’ble Supreme Court of India that upheld the award of emergency arbitrator. We hope That this will expedite the resolution of this dispute with the Future Group.
Jeff Bezos-led Amazon had challenged the Delhi High Court order which had stayed the implementation of the status quo directive passed by a single judge of the High Court for the Future-Reliance deal.
“This is a landmark decision that will change the course of entities engaged in international commercial arbitration. I believe this decision will go a long way in enhancing the ‘ease of doing business’ with Indian entities as dispute resolution There will be several effective ways to be available as a result of the emergency awards being implemented by the Supreme Court,” Ashish Kumar Singh, managing partner at Capstone Legal, told ABP News.
Amazon and Future Retail are embroiled in a bitter legal battle over the deal, with the US-based company requesting that the EA award be declared valid and enforceable in the Supreme Court.
The Supreme Court had earlier asked the National Company Law Tribunal (NCLT) not to issue a final order regarding regulatory approvals for the Future-Reliance deal.
In August last year, Future Group had agreed to sell its retail, wholesale, logistics and warehousing units to Reliance.
In August 2019, Amazon invested in Future Coupons, with the option to buy at flagship Future Retail after three to ten years, the e-commerce giant claimed.
As a result of the alleged breach of contract by the Future Group, Amazon took the FRL to the EA before a Singapore arbitrator.
Kishore Biyani-led Future Retail, India’s second-largest retailer with over 1,700 stores, had said it would be pushed to liquidation if the proposed deal with Reliance remained unfinished.
The Supreme Court’s decision could set Amazon’s position in the country’s market against its rival Reliance Retail.
Sonam Chandwani, Managing Partner, KS Legal & Associates, said, “Despite the winning side being around the corner, it has had to fight a long battle, and this win is a tremendous blow to the future and dependability. It comes down to one for Amazon. Good timing, as it competes directly with Reliance in the online food retail and supermarket segment. This will clear things up as no one is above the law. It will be interesting to see how things progress for future retail. Future Group may file a petition in the Supreme Court for review, but the FCPL deal will go ahead as Amazon was not a party to the agreement. The fact that the amalgamation plan would stall is a major blow to future retail. It will be interesting to see how things progress from here.”
Following the verdict, shares of RIL fell 2% to Rs 2089 on the BSE in a weak market in Mumbai on Friday, while shares of Future Retail fell 10% to Rs 52.5, with the retailer valued at Rs 2849.7 crore.
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