Amazon Vs Future Retail and Reliance-Breather by Supreme Court to Amazon
In a big win for Amazon, The Supreme Court today upheld the appeal of the
e-commerce giant against a Delhi High court order staying the attachment of properties of the Future Group companies and Kishore Biyani in relation to the Future-Reliance deal.
Pertinently, the Bench of justices also held that the order of an emergency arbitrator of Singapore restraining Future Retail from proceeding with its merger deal with Mukesh Ambani's Reliance Retail is enforceable in Indian, under section 17(2) of the Arbitration Act.
Amazon was represented by a battery of Senior Advocates along with a total of 78 lawyers before the Hon'ble Apex Court.
The court order today is the latest setback for cash-starved Future Retail, which operates the nation’s second-largest retail chain.
Reliance Retail, India’s largest retail chain, said a year ago it had reached an agreement with Future Group to acquire the latter’s retail and wholesaler business, as well as its logistics and warehousing business, for $3.4 billion.
Things began to get complicated shortly. Amazon, which had invested in one of Future Group’s units two years ago, accused the Indian firm of violating its contract and approached the Singapore arbitrator to halt the deal between the Indian firms.
Amazon’s deal with Future Retail had given the American e-commerce giant the first right to refusal on purchase of more stakes in Future Retail, Amazon has argued.
The Indian firms, in return, argued last year that Singapore’s court order wasn’t valid in the South Asian market. Moreover, India’s watchdog Competition Commission of India last year approved the deal between the Indian firms.
At the time, Reliance Industries said that its deal with Future Retail was fully enforceable under Indian law and is intended to close the deal “without any delay.”
Shares of Future Retail, which operates 1,700 retail stores across 400 Indian cities, dropped 6% on the Friday order, while Reliance Industries — the conglomerate that runs Reliance Retail — were down 1.3%.