Ali Hasan
Amazon has urged the Delhi High Court to order enforcement of the award by Singapore’s Emergency Arbitrator (EA) restraining the Future Group from going ahead with its ₹ 24,713 crores deal with Reliance Retail.
The plea also sought the detention of the Biyanis, directors of Future Coupons Pvt Ltd and Future Retail Ltd (FRL) and other related parties in civil prison and attaching of their properties for alleged “Willful Disobedience” of the emergency arbitrator’s order.
Amazon has approached the high court seeking to restrain Kishore Biyani-led Future Group from taking any steps to complete the transaction with entities that are a part of the Mukesh Dhirubhai Ambani (MDA) Group.
It also sought to restrain Future Group from taking any steps to transfer or dispose of Future Retail Ltd’s retail assets or the shares held in FRL by the Biyanis in any manner without prior written consent of Amazon. The Future Group and Amazon have been locked in a battle after the US-based company took FRL into the emergency arbitration over alleged breach of a contract between them.
In the petition, Amazon has alleged that Future Group, Kishore Biyani and other promoters and directors have “deliberately and maliciously disobeyed” the EA award despite it being binding on them and not having challenged it in accordance with the law.
“The majority respondents’ action of simply ignoring the order (of EA) and continuing with the impugned transaction (deal) is not only contumacious but calls into serious question their respect for enforceability of contracts, the rule of law and the administration of justice” it said.
In August last year, Future had reached an agreement to sell its retail, wholesale, logistics and warehousing units to Reliance. The SIAC on October 25 last year, had passed an interim order in favour of Amazon barring FRL from taking any step to dispose of or encumber its assets or issuing any securities to secure any funding from a restricted party.
Subsequently, Amazon wrote to market regulator SEBI, stock exchanges and Competition Commission of India (CCI), urging them to take into consideration the Singapore arbitrator’s interim decision as it is a binding order, FRL had earlier told the high court.
As per the SIAC interim order, a three-member arbitration panel needs to be set up within 90 days (from the date of the judgement) with one judge each being appointed by Future and Amazon, along with a third neutral judge.
But all is not over as Amazon is also being investigated by ED for an alleged FDI violation. The Enforcement Directorate is investigating retail giant Amazon for alleged violations of the foreign exchange law in its deal with Future Retail. The agency has filed a case after the Delhi High Court recently made observations about the deal while hearing Amazon’s challenge to the acquisition of the Kishore Biyani-led Future Retail by the Reliance Group.
The High Court had observed last month that e-commerce giant Amazon had, through three agreements, indirectly gained control over Big Bazaar owner Future Retail without the approval of the government, which appeared to be a violation of the Foreign Direct Investment Rules under the Foreign Exchange Management Act (FEMA).
Amazon had bought 49% in one of Future Group’s unlisted firms, Future Coupon, with the right to buy into the listed Future Retail Ltd (FRL) after a few years if the government ended the bar on foreign ownership of multibrand retailers.
In the shareholders’ agreement, Amazon had barred Future Coupon from selling its assets to 15 companies, including Reliance Industries. But in August, Reliance Retail acquired a 30% stake in Future Group’s retail, wholesale, logistics and warehousing businesses for ₹ 24,000 crore, which triggered the row with Amazon.
Amazon first approached the Singapore International Arbitration Centre and later approached the Delhi High Court. As of now the matter is in courts and no one knows who will gain and who will lose. But we will try to cover all the latest news and keep you updated. Hence, stay tuned and keep coming back.
