"FRL has been legally advised that actions taken by the FRL and its board, which are in full compliance of the relevant agreements and eminently in the interest of all stakeholders cannot be held back in arbitration proceedings initiated under an agreement to which FRL is not a party," said the company in a stock exchange notice.
The Kishore Biyani owned firm said relevant agreements are governed by Indian Law and provisions of Indian Arbitration Act and the matter raises several fundamental jurisdictional issues which go to the root of the matter.
"This order will have to be tested under the provisions of Indian Arbitration Act in an appropriate forum. In any enforcement proceedings, FRL would take appropriate steps to ensure that the proposed transaction will proceed unhindered without any delay," the statement said.
The Singapore International Arbitration Centre (SIAC) has passed an interim order asking Future Group to put its plans of selling its retail business to Reliance Group on hold and wait for the final judgment on the plea filed by Amazon. Future Group is likely to move Delhi High Court in the next few days challenging the interim order.
Amazon had filed an arbitration petition with SIAC claiming that Future Group breached the contract under which the US online giant took an indirect stake in its retail business in 2019. The proposed deal between Future Retail and RIL does not have its approval and hence should not go through, it had said.
SIAC in its order also asked Amazon to submit a proposal within a week, outlining its plans for Future Retail in case the outcome is in its favour. The interim order is valid for 90 days and SIAC will issue its final verdict in this period. No more hearings are expected to take place.
Amazon indirectly owns a 5% stake in Future Retail — which houses all food and grocery stores such as Big Bazaar and Easyday — through a 49% shareholding in promoter holding firm Future Coupons that it bought for Rs 1,500 crore last year.
As per Amazon's interpretation of the contract, Future cannot sell any shares to Reliance or any other competitor and that Amazon had the right of first refusal. While the agreement said Amazon has the first right to buy Biyani’s entire holding in Future Retail between three and ten years after the transaction, Future Group was restricted to sell or transfer its assets to third party without the consent of the US company from day one. Amazon claims this clause was breached.
In August, Reliance Retail agreed to acquire the retail assets of Future Group in a complex deal which will see the merger of five listed entities, including Future Retail, into Future Enterprises (FEL) that currently houses the group’s retail back-end infrastructure. The retail business will then be transferred to Reliance in a slump sale for nearly Rs 25,000 crore, thus obviating any need for a stake sale. Amazon, like other shareholders of these listed companies, will get shares in FEL, which will manage consumer goods and insurance business.
SIAC, a non-profit body, provides an alternative method of dispute resolution arising from cross-border transactions involving foreign companies, settling cases privately and confidentially outside the public court system.
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21 Comments on this Story
Agrani Mahajan23 days ago
Kissa Kursi ka holds valid for both amazon and RIL who are trying to get the hold of the Indian market as far as possible and can go to any length and breadth for it. I donâ t trust any of the 3 parties into getting into a fair trade practice
Suresh Kamath38 days ago
This FUTURE Group Promoters Biyani is respected for being BOLD and starting a Mall Business and running it well for a while BUT having rested on Oars and RUSTED to NEVER think of taking to NEXT Level of Growth and OVERLOADED with DEBTS and dishonored the DEALS with the AMAZON group who Invested 1500 Cr in his Business and such back stabbing them and Joining hands or HANDING OVER the entire Business to RIL and yet NEVER Paying off the Creditors is NEVER a HONEST BUSINESSPERSON on EARTH and this ORDER from the Singapore Bench surely MUST be Honored and Indian Court MUST implement this to a TEE and make this FUTURE Promoter pay through his very nose and as did RANBAXY Promoters the INFAMOUS SINGH Bros and hope sanity of BUSINESS PRINCIPLES are brought out and HONOR of the Deals and MONEY Invested into Indian Business by ANY Investors Domestic or Foreign MUST be HONORED to the last alphabet OR face the MUSIC in the JAIL Cells sooner and hope better WISDOM Prevails and FUTURE Biyani makes amend and HONORS the DEAL with AMAZON and settles the ISSUE which WOULD affect the FOREIGN INVESTMENT of the Future in India Inc
Ds38 days ago
All parties should respect international court verdict and the SPA agreement between Amazon and Future that gives first right of refusal to Amazon in Future stake sale. Disobidience will cost Reliance and Ambani family in future. Mukesh Ambani should not sow the difficult seeds for his next generations. Future group is a crook like the Fortis promoters and hopes to run away with money leveaing the Amazon and Ambani to fight it out. Both should understand that Future group is Bankrupt and settle the case and then entertain Future group.