Future Retail files suit against Amazon in Delhi HC for ‘interfering’ with Reliance deal

Future Retail has sought necessary reliefs from Amazon for interfering with the Reliance Retail deal by ‘misusing’ the Singapore Arbitrator’s interim order.
Kishore Biyani
Kishore Biyani

In a fresh twist to the Amazon-Future Retail battle, Future Retail has filed a suit against Amazon in the Delhi High Court seeking relief from the e-commerce giant for interfering with its deal with Reliance Retail.

Future Retail said in a regulatory filing that it filed a suit in the Delhi High Court on November 7 seeking necessary reliefs from Amazon and alleges that Amazon ‘misused’ the interim order passed by the Singapore International Arbitration Centre (SIAC). It reiterated that the arbitration proceeding initiated by Amazon against Future Retail over a deal that it is not party to.

“The Company has filed necessary suit in the Hon’ble Delhi High Court on 7th November, 2020 in relation to seeking necessary reliefs against Amazon.com NV Investment Holdings LLC (“Amazon”) from interfering with the Transaction by misusing an Interim Order dated 25th October, 2020 issued by an Emergency Arbitrator, appointed by the Singapore International Arbitration Centre (SIAC). The interim Order dated 25th October 2020 is passed in an arbitration proceeding initiated by Amazon inter-alia against the Company under an Agreement, wherein the Company is not a party to the Agreement,” it said.

“The company has inter-alia made all entities parties to the suit which were parties to the arbitration proceedings, this includes the promoters of the Company (Future Retail). It may be noted that the reliefs sought in the suit are only against Amazon,” Future Retail added in a filing with the stock exchanges.

The SIAC, on October 25, passed an interim order asking Future Retail to put its deal with Reliance Retail on hold. It said in its order that Future Retail cannot partake in any share sale agreement with Amazon’s knowledge.

This is because in August 2019, Amazon bought a 49% stake in Future Coupons, which is an unlisted entity of Future Group and is the promoter company of Future Retail. This deal gave Amazon an indirect 3.6% stake in Future Retail. The deal also gave Amazon the right to buy a partial or controlling stake in Future Retail between three and 10 years from the date of the deal. The deal also reportedly involved a non-compete agreement that barred 15 companies including Reliance from buying any stake in Future Coupons.

However, two months after Reliance Retail announced that it was buying the retail and wholesale business of Future Group for Rs 24,713 crore, Amazon filed an arbitration suit against Future Retail alleging that it wasn’t informed of the deal and that the sale to Reliance violates its terms of agreements.

While Amazon won a favourable ruling, Future Retail and Reliance Retail have maintained that the deal was done under proper legal advice and that both parties intend to go ahead with completing the transaction.

Amazon then wrote to Bombay Stock Exchange (BSE), National Stock Exchange (NSE) and SEBI, asking them not to approve the deal. To this, Future Retail told the exchanges that the Singapore Arbitrator’s order does not apply as Future Retail Limited is not a party to the arbitration agreement invoked by Amazon and urged the exchanges to process its application for the deal with Reliance Retail.

Future Retail told the SIAC during hearings and the exchanges in its letter that it is in deep financial trouble and that if the deal with Reliance fails, it might jeopardise the livelihood of its employees.

Related Stories

No stories found.
The News Minute
www.thenewsminute.com