The development comes after Future Group says that SIAC order is not enforceable under Indian law
Future Group terms Amazon’s claims as “motivated by other considerations”
Amazon had earlier initiated legal proceedings against the Future Group, accusing the latter of violating the non-compete clause
Amazon and Future Group’s tussle has taken a new turn as the former had asked Future Group to pay INR 1,431 Cr plus interest which is the same amount that the etailer had in Future Coupons.
The development comes after Future Group clarified that Singapore International Arbitration Centre (SIAC) order to put the INR 24,713 Cr deal between Kishore Biyani’s Future Group and Mukesh Ambani’s Reliance Retail Ltd. on hold is not enforceable under Indian law and is not binding on the company.
Calling Amazon’s claims as ‘motivated by other considerations’, Future group said in an exchange filing, “It is a bit rich for such an argument to be made from someone who is not even a shareholder in Future Retail.”
Amazon had already initiated legal proceedings against the Future Group, accusing the latter of violating the non-compete clause in the contract between both parties, with the proposed sale of its retail, wholesale, logistics, and warehousing businesses to Reliance Retail for INR 24K Cr in August this year.
“This contention raised by Amazon is entirely misconceived. In fact, if the two separate agreements were treated as the single integrated transaction by which Amazon had obtained an interest in and rights against Future Retail, then in 2019, when the agreements were executed there would have been a change in control of Future Retail in favour of Amazon, requiring it to make an open offer to Future Retail’s public shareholders in terms of the SEBI regulations. No such open offer was made,” the company said.
Meanwhile, Reliance also doesn’t plan to step back as it said it entered the transaction to acquire assets and business of Future Retail “under proper legal advice and the rights and obligations are fully enforceable under Indian law. RRVL intends to enforce its rights and complete the transaction in terms of the scheme and agreement with Future group without any delay.”
On the other hand, the Bombay Stock Exchange (BSE) has agreed to consult SEBI to seek clarifications from Future Retail and Reliance Industries deal, following Amazon’s objections.
The development comes after the ecommerce giant wrote to SEBI, BSE and National Stock Exchange (NSE), urging them to take into consideration the Singapore arbitrator’s interim judgment that has put the deal on hold.
The Competition Commission of India (CCI) is also reviewing the online and offline aspects of the Reliance and Future Group deal and their impact on competition in the sector and the Reliance-Future Group deal also needs approval from CCI.
Amazon Vs Reliance
Amazon’s decision to pursue legal action against Future Group will also have a bearing on the competition among the retail giants in India.
Reliance Retail entered into direct competition with Amazon in the ecommerce sector with the launch of JioMart. Both platforms have beefed up their online offerings, in terms of product categories and discounts, as the Diwali festive season nears.
In the last couple of months, Reliance Retail has been attracting investments from several companies, some of which have previously invested in Reliance’s digital venture Jio Platforms as well. On October 6, Inc42 reported that the United Arab Emirates (UAE)-based sovereign wealth fund Abu Dhabi Investment Authority (ADIA) has committed to invest INR 5,512.50 Cr in Reliance Industries’ retail unit Reliance Retail in exchange for 1.20% equity stake on a fully diluted basis.
When the investment comes through, Reliance Retail will have raised INR 37,710 Cr from global investors including Silver Lake, KKR, General Atlantic, Mubadala, GIC, TPG and ADIA in less than four weeks.
