The arbitrator looking into the dispute between Amazon and Future group has put an interim stay on the latter’s Rs 25,000-crore deal with Reliance Retail. The former Attorney-General of Singapore, V.K. Rajah, was the arbitrator for the case.
In his order granting interim relief for Amazon, Rajah said it was prudent for an interim stay in the deal as it was “disputed”.
“It is just, in the circumstance, to award interim relief to the Claimant to restrain and injunct the Respondents from taking any further steps in connection with the Disputed Transaction,” he stated. The order ran into over 120 pages, and was reviewed by BusinessLine.
Earlier this month, Amazon had sought intervention stating that the Rs 25,000-crore deal between Future Group and Reliance Retail violated multiple rules of the 2019 agreement and was against the interest of Future Retail’s shareholders.
“The horse has not bolted yet,” said Rajah in his written order, and even if that was the case, “the Respondents (Future Retail and Future Coupons) are contractually obliged to work with the Claimant to cajole ‘the unruly horse’ to return to its stable.”
In sum, he explained that the more there was a delay in giving relief, “the greater the prejudice to the Claimant it is apparent that at some point of time in the very near future, restoring the Claimant’s rights will become impossible.”
A source close to these developments told BusinessLine that “This is a big win for Amazon, and while it isn’t conclusive yet, it still is a ray of hope that Amazon’s investments wouldn’t be futile after all.”
In August 2019, Amazon had picked up 49 per cent stake in Future Coupons Ltd. Future Coupons Ltd owns 7.3 per cent of Future Retail. This gave Amazon roughly 3.6 per cent stake in Future Retail.
Biyani had also agreed to certain share transfer restrictions on the promoter shares in the company for the same tenure, including restrictions to not transfer shares to specified persons and, more importantly, a right of the first offer in favour of Amazon.
With the arbitrator giving an interim stay, the deal between Future and Reliance is likely to get delayed. This will create more financial stress on the Future group, which has already defaulted on loan repayments multiple times.
Amazon welcomes award of Arbitrator
In response to BusinessLine’s query, Amazon said, “We welcome the award of the Emergency Arbitrator. We are grateful for the order which grants all the reliefs that were sought. We remain committed to an expeditious conclusion of the arbitration process.”
Amazon was represented by counsel Gopal Subramanium, QC, Senior Counsel; Gourab Banerji, QC, Senior Counsel; Amit Sibal, Senior Counsel; Alvin Yeo, Senior Counsel. AZB& Partners; P&A Law Offices; WongPartnership LLP.
Speaking about the way forward, another source said that “Amazon will now approach the exchanges to not approve the deal.”
Future has a week to respond and stop the deal, if not, “we will approach the Delhi High Court stating the arbitrator has given a stay.
The Reliance group in a statement said that ithas entered into the transaction for acquisition of assets and business of Future Retail under proper legal advice and “The rights and obligations are fully enforceable underIndian Law,” it said.
It further added that it tends to enforce its rights and complete the transaction in terms of the scheme and agreement with Future group without any delay. in this case, thus, the deal cannot move forward,” the person added.-The Hindu Business Line