Reliance-Future Deal: 'We Welcome SC Verdict', Says Amazon After Apex Court Upholds Plea

The Supreme Court ruled that the order issued by a Singapore arbitrator in October, which halted the deal after finding merit in Amazon's objections, was valid.

(Representative Image/Getty)

Mumbai: In a major setback to the Rs 24,713 crore deal between Mukesh Ambani-led Reliance Industries and Kishore Biyani led Future Group, the Supreme Court on Friday upheld e-commerce giant Amazon's plea.

The Supreme Court ruled that the order issued by a Singapore arbitrator in October, which halted the deal after finding merit in Amazon's objections, was valid.

In the judgment, the two-judge bench comprising Justices Rohinton Fali Nariman and BR Gavai read that appeal filed by the multi-national is allowed. "We have framed two questions and answered them as Emergency Arbitrator's award holds good and can be enforced under Section 17(2). Appeal is allowed," the top court bench said. ABP News reviewed the copy of the order.

When asked for comments, Amazon spokesperson, in an e-mail reply to a query by ABP News, said, “We welcome the verdict of the Hon’ble Supreme Court of India upholding the Emergency Arbitrator’s award. We hope that this will hasten a resolution of this dispute with Future Group.”

Jeff Bezos led Amazon had challenged the Delhi High Court order, which had stayed the implementation of status quo direction passed by a single judge of the High Court to the Future-Reliance deal.

"This is a landmark judgment which will change the course of entities which are engaged in international commercial arbitration.  I believe that this judgment will go a long way in increasing ‘ease of doing business’ with Indian entities as multiple effective modes of dispute resolution will be available as a result of emergency awards being rendered enforceable by the Supreme Court,"  Ashish Kumar Singh, Managing Partner, Capstone Legal, told ABP News.

Amazon and Future Retail have been embroiled in a bitter legal battle over the deal, with the US-based company requesting that the EA award be declared valid and enforceable in the Supreme Court.

The Supreme Court had previously asked the National Company Law Tribunal (NCLT) not to issue a final order relating to regulatory approvals for the Future-Reliance deal.

The Future group agreed to sell its retail, wholesale, logistics, and warehousing units to Reliance in August of last year.

In August 2019, Amazon had invested in Future Coupons, with the option to buy into the flagship Future Retail after three to ten years, claimed the e-commerce giant.

As a result of the alleged breach of contract by the Future group, Amazon took FRL into EA before the Singapore arbitrator.

Kishore Biyani-led Future Retail, India's second-largest retailer with more than 1,700 stores, had stated that it would be pushed towards liquidation if the proposed deal with Reliance remained unconcluded.

The SC judgment may determine Amazon's position in the country's market against its rival Reliance Retail.

Sonam Chandwani, the Managing Partner at KS Legal & Associates, said, "Despite being on the winning side of the corner, it had to fight a long battle, and this victory is a tremendous blow for the future and reliance. It comes at a good time for Amazon, since it competes directly with Reliance in the online food retail and supermarket segment. It will clear things up since no one is above the law. It will be interesting to see how things progress for future retail. The future group may petition the Supreme Court for a review, but the FCPL deal will go ahead because Amazon was not a party to the pact.  The fact that the amalgamation scheme will be stalled is a major setback for future retail. It will be interesting to see how things progress from here."

After the judgment, RIL shares on BSE tanked 2% to Rs 2089 in a weak Mumbai market on Friday, while Future Retail shares tanked 10% to Rs 52.5, valuing the retailer Rs 2849.7 crore.