In an interim order, the Delhi High Court directed Kishore Biyani-led Future Retail to maintain status quo on the Rs 27,513 crore Future Retail-Reliance deal until ‘the pronouncement of the reserved order’.
The court blocked the sale of a swathe of assets to Reliance Industries on Tuesday after Amazon raised objections to the $3.4 billion deal.
The court said it was of the prima facie view that a Singapore tribunal order, which asked the company owned by Kishore Biyani not to proceed with the deal, was enforceable in India.
The Delhi High Court had said that the order by Singapore Arbitration International Centre (SIAC) passed on October 25, 2020 in enforceable under the Arbitration Act and that Future Group will now have to place all steps taken post the order on record.
Amazon has sought the enforcement of its Emergency Award passed under the SIAC Rules under Section 17(2) of the Arbitration & Conciliation Act. It has alleged that Future Group, Kishore Biyani as well as other promoters and directors have “deliberately and maliciously” disobeyed the Emergency Award in spite of their participation in the arbitration proceedings.
The decision is a setback for Future Retail, the country’s second-largest retailer with over 1,700 stores, which agreed to sell its retail businesses to market leader Reliance last year. It has said it could face liquidation if the deal falls through.
US-based e-commerce major Amazon, which had its sights set on ultimately owning part of the retail assets itself, argued a 2019 deal it had with a unit of Future contained clauses prohibiting Reliance Retail from selling them to anyone on a “restricted persons” list including Reliance.
Future Retail has said in a statement that the company will explore all legal remedies and take appropriate steps to pursue the deal. The company said in its statement, “The Company is legally advised that the basis of the interim award of the Emergency Arbitrator has been superseded by the judgement dated December 21, 2020 passed by the Single Judge bench of Delhi High Court.”