Amazon.com NV Investment Holdings LLC and Kishore Biyani-led Future Group are gearing up for the last leg of the proceedings at Singapore International Arbitration Centre (SIAC) over Future Group’s sale of its retail assets to Reliance Industries Ltd (RIL) for ₹25,000 crore. The SIAC formed its panel on Tuesday to pass the final judgment on the case between Amazon and Future.
Two people with direct knowledge of the proceedings at SIAC confirmed the development.
On 25 October, SIAC had passed an interim order in favour of Amazon, and restrained Future Group from proceeding with the deal.
Amazon has also asked India’s market regulator to direct Future Group from merging six Future Group companies, which are a key part of the deal with RIL.
The SIAC arbitration panel will pass the final verdict on whether Future Group can go ahead with its ₹25,000 crore deal or not.
“The SIAC registry has informed parties that the arbitral tribunal has been constituted,” said Alexander Kwiatkowski, the Amazon spokesperson for Asia Pacific.
On 5 October, Amazon had filed an arbitration case against Future Group for deciding to forge an alliance with RIL to sell Future Group’s retail, wholesale and logistics business without Amazon’s consent. The e-commerce major said that under an agreement between Future and Amazon in August 2019, the former was required to take its consent.
“Veteran barrister Michael Hwang has been appointed as the judge for the tribunal in the Amazon-Future case,” said one of the two people, seeking anonymity.
There will be two members in the arbitration panel when the case comes up for hearing in the next few weeks, he added.
Albert Jan van den Berg, the founding partner of law firm Hanotiau & van den Berg and Jan Paulsson, a Swedish arbitration veteran and founding partner of Three Crowns Llp., are the two members of the SIAC arbitration panel. “Albert Jan van den Berg has been appointed by Amazon, while Paulsson has been shortlisted by the Future Group as the members of the tribunal,” he said.
Hwang is a former judicial commissioner of the Supreme Court of Singapore. SIAC’s final verdict will be key to the RIL-Future deal since the Delhi high court recently judged that Future Group and Amazon should approach competent regulators or authorities, and go by their judgment.
While an interim order by SIAC had restrained Future Group from taking the proposed deal with RIL forward, the SIAC tribunal may dismiss the interim order and rule in favour of Future Group since the Delhi high court has mentioned in its order that Amazon will be in breach of India’s foreign direct investment (FDI) norms if it intervenes in the deal between Future Retail and RIL since Amazon does not own control of Future Retail and has not taken the government’s approval to control the company.
India’s FDI norms allow 51% holding by a foreign entity in a multi-brand retail firm, such as Future Retail, but Amazon did not take the government’s permission for acquiring control over it.
However, the agreement between Amazon and Future Group says that Future Group cannot forge an alliance in the retail space with RIL without Amazon’s prior consent.
Amazon and Future Group have been entangled in the bitter legal battle, which has intensified amid the increasing competition among some of the world’s largest retailers to capture India’s thriving retail and e-commerce market share. Therefore, SIAC’s final ruling will be crucial for Amazon.
