Future Retail, a unit of Future Group, is likely to move the Delhi High Court seeking directions on going ahead with its £2.47 billion deal with Reliance Retail Ventures, which has been put on hold by the Singapore International Arbitration Centre (SIAC), sources said. The petition will challenge the interim order issued by an emergency arbitrator of the SIAC. Future Retail is hopeful of getting an early hearing.
Following a plea by e-commerce giant Amazon citing alleged contractual violations, the interim order had asked Future Retail, Future Coupons and the parent company Future Group “not to take any steps in furtherance to the Board Resolution of August 29”. Legal experts said the interim order does not hold much value under Indian laws, and Future and Amazon will have to approach courts in India to seek directions on the course of action.
Amazon had objected to the Future-Reliance deal, and subsequently instituted arbitration against Future Coupons, Future Retail and Future Group. On Sunday, Amazon said it welcomed the interim order but remained committed to the arbitration process. Reliance Retail said it intends to “enforce its rights and complete the transaction in terms of the scheme and agreement with Future group without any delay”.
On Monday, Future Retail notified the exchanges that it had received communication from the SIAC, and enclosed the interim order. The company also said that all agreements it had with companies were “governed by Indian Law and provisions of the Indian Arbitration Act for all intents and purposes”.
“This matter raises several fundamental jurisdictional issues, which go to the root of the matter. Accordingly, this order will have to be tested under the provisions of Indian Arbitration Act in an appropriate forum,” the company said in a statement.
On August 29, Future Retail had announced that it would “sell by way of a slump sale the retail and wholesale business” of its supermarket chain Big Bazaar, premium food supply unit Foodhall, and fashion and clothes supermart Brand Factory’s retail and wholesale units, to Reliance Retail, a unit of Mukesh Ambani-owned Reliance Industries. The deal, however, ran into legal trouble with Amazon, which had last year signed a £200 million deal with Future Retail under which the e-commerce major would acquire 49 per cent stake in Future Coupons, the promoter firm. Following the Future-Reliance deal, Amazon had also said that its agreement with Future Coupons had given it a “call” option.
