Amazon triumph over RIL- Future Retail deal, SC upholds Singapore's EA award

By siliconindia  |  Friday, 06 August 2021, 12:03:25 PM IST

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The Supreme Court has announced that Singapore’s Emergency Arbitrator (EA) award is enforceable. It has restrained Future Retail from proceeding its merger deal with Reliance Retail that falls within the range of Arbitration and Conciliation Act which is enforceable.

The verdict turns as a big win for Amazon in the battle for the large Indian market. The US-based firm had filed pleas against the merger of Future Retail Ltd (FRL) with Reliance Retail.

The verdict was stated by a SC bench of Justices R F Nariman and B R Gavai that had retained it on July 29 after hearing battery of lawyers including senior advocates Harish Salve and Gopal Subramanium, appearing for FRL and Amazon respectively.

The decision is a setback for Future, the country's second-largest retailer having more than 1,700 stores, has nodded to sell its retail businesses to market leader Reliance last year. However, e-commerce giant Amazon, which had its sight set on ultimately owning part of the retail assets itself, argued a 2019 deal it had with a unit of Future contained clauses prohibiting Future Retail from selling them to anyone on a "restricted persons" list including Reliance.

Amazon had initially filed a plea before the high court (single judge) for enforcement of the October 25, 2020, EA award by Singapore International Arbitration Centre (SIAC) restraining FRL from taking ahead the deal with Reliance Retail.

However, the high court division bench had stated that it was staying the single-judge order as FRL was not a party to the share subscription agreement (SSA) between Amazon and FCPL and the US firm was not a party to the FRL-Reliance deal.FRL, in its appeal, had claimed that if the February 2 order did not stay it “would be an absolute disaster” for it as the proceedings before the NCLT for approving the merger scheme have been put on hold. It had contended that the single judge's status quo order would effectively derail the entire scheme which has been approved by statutory authorities in accordance with the law.

In August last year, the Future group had reached an agreement to sell its retail, wholesale, logistics, and warehousing units to Reliance. Subsequently, Amazon took FRL into EA before the SIAC over the alleged breach of contract by the Future group.

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