RIL-Future Retail Deal: Amazon Gets Favourable Ruling In Singapore, Check Impact Of The Decision Here

Amazon believes Future Group violated the contract by entering into the deal with rival Reliance. The deal would have helped Reliance almost double its footprint as India's largest retailer.

(File Photo/ Getty)

New Delhi: The US retail giant Amazon.com Inc on Sunday won a favourable ruling against its partner Future Group selling retail business to Reliance Industries Ltd for ₹ 24,713 crore after a Singapore-based single-judge arbitration panel put the deal on hold. Also Read: India-US 2+2 Dialogue : Mike Pompeo, US Defence Secy To Reach India Today, Key Military Pact On Agenda Why did Amazon drag Future Group into the court? Last year, Amazon agreed to purchase 49 per cent of one of Future's unlisted firms with the right to buy into flagship Future Retail Ltd after a period of three years to 10 years. It has dragged Future to arbitration after the indebted Kishore Biyani group firm has inked a deal to sell retail, wholesale, logistics and warehousing units to billionaire Mukesh Ambani's Reliance. Amazon believes Future Group violated the contract by entering into the deal with rival Reliance. The deal would have helped Reliance almost double its footprint as India's largest retailer. What is the interim order passed? V.K. Rajah, who is the sole arbitrator in the Amazon vs Future vs Reliance arbitration matter, passed an interim award in favour of Amazon, asking the Future group to put the deal on hold. Rajah mentioned the deal cannot go through until it finally decides the matter, as per the news agency PTI report. Meanwhile, Amazon has welcomed the arbitration panel’s decision in granting the relief and expect an expeditious conclusion of the arbitration process. What’s RIL stand on this? As per the PTI report, RIL retail arm Reliance Retail Ventures Limited (RRVL) is aware about the interim order passed by the emergency Arbitrator in the arbitration proceedings invoked by Amazon. However, it intends to enforce its rights and complete the transaction in terms of the scheme and agreement with Future group without any delay. RRVL has entered into the transaction for the acquisition of assets and business of Future Retail Limited under proper legal advice and the rights and obligations are fully enforceable under Indian Law. RRVL is the largest, fastest-growing and most profitable retail business spanning supermarkets, consumer electronics chain stores, cash and carry wholesale business, fast-fashion outlets and online grocery store JioMart. With current investments flowing in, Reliance Retail is well positioned to compete in both offline and online formats. When is the final order expected? A three-member arbitration panel, with Future and Amazon appointing one representative each and a third member being a neutral umpire is expected to decide on the dispute in 90 days. What does it mean for India’s retail market? In its pursuit to strengthen its footprint in the country’s estimated $1 trillion retail markets, Amazon is drawing the battle lines with Reliance by raising the objection and blocking Reliance’s growing hold on the retail sector . The US retail giant has been aspiring for the Indian partner to strengthen its foothold after becoming the authorized online sales channel for Future Retail''s stores that sell everything from groceries to cosmetics and apparel. It will only fuel the competition among the players trying to gain a bigger pie in India’s burgeoning retail space.