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  • Writer's pictureDeepthi Rao

Future Retail may lose its ₹ 24,713 crore deal with Reliance Industries

Mumbai based Kishore Biyani-led Future Retail, said that it will challenge an arbitration order that put a temporary hold on its Rs 24,713 crore deal to sell assets to Reliance Industries. Future Retail said that it did not agree to party to the agreement under which Amazon.com Inc had invoked arbitration proceedings.

Amazon had won an injunction from a Singapore arbitrator to halt Future Retail's deal to sell assets to Reliance. Amazon alleged that Future Retail had breached certain contract provisions it had entered into last year in a separate deal with the US firm. The dispute centres around Future Retail's decision in August to sell its retail, wholesale, logistics and some other businesses to Reliance for $3.38 billion (roughly Rs. 24,900 crores), including debt.

Amazon argued that a 2019 deal it had with Future Retail had clauses saying the Indian group could not sell its retail assets to anyone on a 'restricted persons' list including any firms from Reliance chief Mukesh Ambani's group. The deal specified any disputes would be arbitrated under Singapore International Arbitration Centre rules.


However, Future Retail and Reliance Industries reacted to the arbitrator's decision by saying that they want to complete the deal 'without any delay', setting the stage for a showdown between Reliance and Amazon, each led by one of the world's richest men.


Reliance Retail Ventures Ltd (RRVL), a unit of billionaire Mukesh Ambani's Reliance Industries Ltd, in a statement stated that it had entered into the transaction for the acquisition of assets and business of Future Retail Ltd under proper legal advice and the rights and obligations are fully enforceable under Indian Law.


Online retail giant Amazon had last year acquired a 49 per cent stake in Future Coupons Ltd, the promoter entity which owns a 7.3 per cent interest in Future Retail, the operator of more than 1,500 stores in India including grocery chain Big Bazaar.


Amazon's investment in Future Group came with contractual rights that include a right of first refusal and a non-compete-like pact. Also, the deal came with the right to buy into their flagship, Future Retail, after a period of between 3 and 10 years.


Future's retail unit, which has more than 1,500 outlets, will need to pack up if the transaction with Reliance does not go through, hitting the livelihoods of thousands of employees and workers at its vendor firms


However, a three-member arbitration panel, where one judge each would be appointed by Future and Amazon and a third neutral judge; would decide on the issue in 90-days. The latest scuffle puts Amazon at odds not just with Future Retail but also with Ambani and his Reliance group; which is fast expanding its e-commerce business, and threatening the dominance of Amazon and other retailers in India.


Source - Thomson Reuters


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