Future Retail has written to the Delhi High Court asking the court to clear the arbitration as illegal since Amazon has no grounds to object to its deal with Reliance.
Recently, Future Group scored big after CCI’s temporary suspension on the Amazon-Future Coupons 2019 deal.
The move comes on the back of Future Group missing its repayment due date. Future Retail Ltd missed the INR 3494.56 Cr payment to its lenders on 31 December as per the terms of the one-time restructuring (OTR) agreement. The retail enterprise blamed the delay because of the dispute with Amazon and sought to repay the debt in the next 30 days— by January 2022.
“Due to ongoing litigations with Amazon…the company was not able to complete the planned monetisation of the specified business as contemplated in OTR plan to discharge the aforesaid obligations to lenders, on the due date,” an exchange filing reads. Now, it is banking on the one month grace period to make payments to lenders.
Future Retail has borrowings of over INR 10,000 Cr including short-term and long-term loans of over INR 6,000 Cr, foreign currency bonds of about INR 3,500 Cr and non-convertible debentures worth INR 200 Cr. Thus, the loss-making retail giant proposed to sell its retail, wholesale and logistics arm that included businesses including Fashion at Big Bazaar, Koryo, Foodhall, Easyday to Reliance for INR 24,713 Cr ($3.4 Bn).
To sail through the one month’s grace period and come to a conclusion on its deal with Reliance, Future Retail wants Delhi HC to nullify Amazon’s case. “The continuation of the entire arbitration proceedings is a perpetuation of illegality,” Future said in its filing.
Since its announcement in August 2020, the Reliance-Future deal has been bitterly contested by Amazon. The ecommerce major’s entire claim of blocking the $3.4 Bn deal between FRL and Reliance rested on the fact that due to its indirect stake in Future Retail (via the FCL deal, now suspended by CCI), Future Group is prohibited from carrying out a transaction with Reliance.
India’s competition watchdog suspended the Amazon-Future Coupons deal for reasons including deliberate design on the part of Amazon to suppress the actual scope and purpose of the combination and false and incorrect representations made on Amazon’s part by concealing/suppressing material facts i.e. failing to identify and notify strategic interest over Future Retail.
Escalating the matter from the SIAC to Delhi HC, now, a decision by the Supreme Court is pending over a petition filed by the US-based ecommerce major.
The matter is likely to be heard this week.