A Singapore arbitration panel has put on hold Future Group’s $3.38 billion (roughly Rs. 24,900 crores) asset sale to Reliance, an interim win for Amazon, which had alleged the deal between the Indian firms breached existing agreements.
Amazon received an emergency order to halt the companies from proceeding with the deal until an arbitration tribunal is formed, a source with direct knowledge of the matter told Reuters.
Amazon last year bought a 49 percent stake in Future Coupons, which owns a 7.3 percent stake in Future Retail. In August, Mukesh Ambani’s Reliance decided to buy retail, wholesale and some other businesses of Future Group in a deal valued at $3.38 billion (roughly Rs. 24,900 crores), including debt.
But Amazon’s investment came with contractual rights that include a right of first refusal and a non-compete-like pact, media had reported, and Amazon later started arbitration proceedings in Singapore.
“It’s a comprehensive victory for Amazon,” a source with direct knowledge of the decision said. “They’ve won an injunction to stop the deal.”
Two sources familiar with the matter said the temporary injunction was not automatically enforceable in India and that the order would have to be ratified by an Indian court.
In a statement, Amazon said: “We are grateful for the order which grants all the reliefs that were sought. We remain committed to an expeditious conclusion of the arbitration process.”
Reliance Retail intends to complete the transaction under the terms of the agreement with Future Group without any delay, Reliance Retail (RRVL) said in a statement on Sunday.
“RRVL has entered into the transaction for acquisition of assets and business of Future Retail Limited under proper legal advice and the rights and obligations are fully enforceable under Indian Law,” the statement added.