Future Group has filed two caveat petitions in the Delhi High Court against Amazon, in anticipation that Amazon will move court against Future Group’s deal with Reliance Retail. The deal comes under the purview of the Delhi HC.
Last week, Amazon won a favourable ruling in the Singapore International Arbitration Centre (SIAC), which directed Future Retail’s deal with Reliance Retail to be put on hold. However, this interim order is not directly enforceable in India, it will have to be ratified by an Indian court.
This petition filed by Future Group says that if Amazon were to move court, it prayed that no order be passed in any plea without hearing the Future group and by giving it due notice. This is to ensure that the court hears out Future group as well before it passes any order.
This comes after Future Retail told the stock exchanges that Amazon has demanded Rs 1,431 crore plus interest as damages as an alternate form of settlement.
Amazon had moved the Singapore International Arbitration Centre (SIAC) for an alleged violation of the provisions of the shareholders agreements in October, two months after the deal between Future Group and Reliance Retail was announced.
Future Group had announced in August 2019 that Reliance Retail will be buying its retail, wholesale and logistics business in a slump sale for Rs 24,713 crore.
Amazon is involved in this equation because it bought a 49% stake in Future Group’s unlisted firm Future Coupons in August 2019. This investment gave it an indirect stake of 3.6% in Future Retail. This deal also stated that from 2022 onwards, Amazon had a ‘call option’ to buy a partial or controlling stake in Future Retail, subject to FDI norms.
The Singapore International Arbitration Centre ruled in favour of Amazon and directed Future Group to put its deal with Reliance on hold until it decides on the matter. The SIAC, in its ruling, reportedly said that Future Group has given no sound legal reasons as to why it went ahead with the Reliance deal behind Amazon’s back, ‘gravely compromising its interests’.
Amazon then wrote to Bombay Stock Exchange (BSE), National Stock Exchange (NSE) and SEBI, asking them not to approve the deal.
Later, Future Retail told the exchanges that the order does not apply as Future Retail Limited is not a party/signatory to the arbitration agreement invoked by Amazon. Future Retail then urged the Indian exchanges to process its application for the deal with Reliance Retail, as the arbitrator's order does not restrict market regulator SEBI or the exchanges from considering and approving the scheme.
FRL also told the exchanges that it is in deep financial trouble and the deal with Reliance Retail is the only rescue route for the debt-laden company.
Meanwhile, Reliance Retail has said that it entered into the deal under proper legal advice and intends to enforce its rights and complete the transaction without any delay.