Reliance - Future Group Deal: Singapore Emergency Arbitrator Stalls the Sale of Future Group

Background of the deal

Amazon bought a 49 per cent stake in one of Future's unlisted firms, Future Coupons last year, with the right to buy into Future Retail for a period ranging from three years to 10 years. Future Coupons owns a 7.3 per cent stake in Future Retail. Through it, American e-commerce group, which indirectly bought a 3.58% stake in Future Group’s Future Retail business.

However, in August, the Future Group announced the sale of its retail, wholesale and logistic businesses to Reliance Retail Ventures, the retail arm of Reliance Industries.

The deal with Future Retail had given the American e-commerce giant the first right to refuse the purchase of more stakes in Future Retail.

Amazon approaches the Singapore International Arbitration Centre to block the largest retail deal in India

Amazon reached out to the Singapore International Arbitration Centre to block what could emerge as the largest retail deal in India.

At the Singapore International Arbitration Centre, Amazon won a favourable ruling before the Emergency Arbitrator. The arbitration panel put on hold Future Retail ₹ 24,713-crore asset sale to the conglomerate led by billionaire Mukesh Ambani.

The order

The order of the Emergency Arbitrator stated, “The Respondents (Future Retail and Future Coupons) are injuncted from taking any steps in furtherance to the Board Resolution of August 29, 2020, in relation to the transaction with Reliance, including but not limited to filing or pursuing any application before any Body or Agency in India.”

Statement from Reliance Retail Ventures Limited 

Reliance Retail Ventures Limited (RRVL) is informed of an interim order passed by the Emergency Arbitrator in the arbitration proceedings invoked by Amazon under a shareholders’ agreement with the promoters of Future group.

RRVL has entered into the transaction for the acquisition of assets and business of Future Retail Limited 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.