The Delhi High Court put on hold the deal to sell Future Group’s retail assets to Reliance Retail and also stated that the emergency award passed by the Singapore International Arbitration Centre (SIAC) is enforceable in India. The SIAC had said the transaction should be halted until it decides on Amazon’s challenge against the acquisition plan. Lawyers for Future Group and Reliance Retail have been arguing that the SIAC doesn’t have jurisdiction and that the interim ruling isn’t valid in India. The single-judge bench ordered the deal suspended until his ruling—reserved for later —is announced.
Future Retail “will explore all legal remedies and take appropriate steps to pursue the scheme of arrangement,” it said in a release.
The HC also ordered government counsel to inform all statutory bodies to take note of the interim ruling and said they should be asked to desist from granting any further regulatory clearances to the proposed deal.
The SIAC rightly proceeded against Future Retail, said justice JR Midha, providing temporary relief to Amazon after Future Group rejected the court’s suggestion to enter into negotiations with the American retail giant. Amazon had agreed to start a dialogue to settle matters.
Amazon Welcomes Court Order
“Respondents (Future Retail) are directed to maintain status quo as on today at 4:49 PM till pronouncement of the reserved order,” the judge said while hearing a plea by Amazon seeking the court’s direction to enforce the SIAC’s emergency order.
An Amazon spokesperson said: “We have utmost respect for the Indian legal system and appreciate the interim order of the Hon’ble Delhi High Court to uphold the enforceability of the Emergency Arbitrator’s order and maintain status quo.”
The transaction entails clubbing most of Future Group’s assets into a holding company and then selling it to Reliance Retail on a slump sale basis for about ₹25,000 crore.
Amazon owns a 49% stake in Future Coupons Pvt. Ltd, a Future Group holding company. Amazon says Future Group has breached a contract that gave the ecommerce giant right of first refusal and barred a sale to entities including Reliance.
Source: Economic Times