The Delhi High Court slammed the brakes on the Future Retail-Reliance Retail agreement on Thursday, upholding a Singapore Emergency Arbitrator’s (EA) order that had previously been released against the Rs 24,713-crore deal.
The judiciary also fined Kishore Biyani’s Future Party and its representatives Rs 20 lakh, which must be deposited with the PM Relief Fund.
The court also dismissed Future Group’s claim that EA was void, and ordered Future to document all actions taken in furtherance of the deal since October 25, 2020. The EA was issued by the Singapore International Arbitration Centre (SIAC) on October 25, last year.
In a much-needed relief for Biyani, the debt-ridden Future Group offered to sell its retail, logistics, and warehousing enterprises to Reliance Retail. The Delhi High Court also ordered Biyani and others to appear on April 28. The court also ordered the association of the Future Community founder, as well as the creation of an affidavit describing the situation.
It should be noted that Amazon had previously petitioned the Delhi High Court to take actions regarding Future Group for proceeding with its deal to sell its retail assets to Mukesh Ambani’s Reliance Retail Ventures Ltd (RRVL) notwithstanding the EA order. Biyani, other FRL and Future Coupons representatives were also detained in the plea for suspected “wilful disobedience” of the EA orders.
After Amazon complained that it was not consulted on the Future-Reliance offer, Singapore’s Arbitration Court ruled against it, citing a contract signed between Future Coupons and the multinational e-commerce giant in 2019.
In 2019, Amazon paid Rs Rs 2,000 crore for a 49 percent interest in Future Coupons, the promoter company of FRL. The deal also included a ‘call’ option for the US e-commerce behemoth to buy all or a portion of the promoter’s share capital in FRL. FRL is owned by Future Coupons, which owns 7.3 percent of the company.
FRL, Future Coupons, and Reliance had challenged Amazon’s argument in the Delhi High Court, arguing that if Amazon’s claim that it indirectly invested in FRL by investing in FCL is accepted, it will be a breach of Indian foreign direct investment laws, which allow only a 10% foreign investment in the multi-brand retail sector.
