SUMMARY
NCLT has allowed Reliance Retail to convene meetings of its shareholders and creditors and seek their approval for the acquisition of Future Group’s retail assets for $3.4 Bn
The development comes just three weeks after the tribunal allowed the Kishore Biyani-led Future Retail to hold a meeting of its shareholders and creditors
As litigations are underway against the deal, Reliance Retail Ventures Ltd on October 1st extended the deadline to complete the proposed acquisition till March 31st, 2022
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In what may be a major blow to ecommerce giant Amazon, the National Company Law Tribunal (NCLT) has allowed Reliance Retail to convene a meeting of its shareholders and creditors and seek their approval for the acquisition of Future Group’s retail assets for $3.4 Bn.
On Monday, the Mumbai bench approved the application moved by Reliance Retail Ventures, a subsidiary of Mukesh Ambani-led Reliance Industries (RIL) and rejected the objections raised by Amazon.
Despite the approval given to Reliance Retail for seeking the approval of shareholders and creditors, Amazon’s objections can be considered by the tribunal later at a relevant stage, the bench said.
The development comes just three weeks after the tribunal allowed the Kishore Biyani-led Future Retail to hold a meeting of its shareholders and creditors seeking their approval to sell its retail assets to Reliance Retail.
On September 28th, the Mumbai bench of the tribunal had given a similar approval to Future Retail while rejecting the intervention application filed by Amazon against the proposed acquisition by the RIL subsidiary. The tribunal said that it was approving only for the first motion application.
Last month, the apex court stayed all the further proceedings initiated by ecommerce giant Amazon before the Delhi High Court for four weeks.
As litigations are underway against the deal, Reliance Retail Ventures Ltd on October 1st extended the deadline to complete the proposed acquisition till March 31st, 2022.
The previous deadline ended on Thursday, September 30th, 2021. The deadline was first extended in April 2021.
Amazon and Future Group have been in a legal battle since 2020.
Amazon acquired a 49% stake in Future Coupons for INR 1,500 Cr in 2019, and the latter owns 7.3% shares in Future Retail. Through this transaction, Amazon had also managed to acquire around a 3.58% stake in Future Group.
In the following year, Future Group entered into an asset sale deal worth $3.4 Bn with Mukesh Ambani-led RIL for selling its retail, wholesale, logistics and warehousing assets to Reliance Retail.
This deal was the beginning of an extensive battle between Amazon and Future Retail. Last year, Amazon sent a legal notice to Future stating breach of agreement, which received a favourable ruling in the Singapore International Arbitration Centre (SIAC).
While Future moved to Delhi HC alleging interference by Amazon with its deal with RIL, Delhi HC passed a ruling favouring Amazon. This skirmish led to SIAC forming an arbitration tribunal to relook into the case (in Januart 2021), and a status quo was ordered on the deal by HC.
Following this, Delhi HC lifted the status quo, Amazon moved to SC challenging the ruling. This torpedoed into SC re-levying the restrain on the RIL and Future Group deal.
The court directed Kishore Biyani to attach all his properties as part of Amazon’s plea for enforcement of the emergency award.
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