Reliance Retail said on Sunday evening that its proposed deal to buy Future Group’s assets for $3.4 billion is fully enforceable under the Indian law. It further stated that it intends to complete the deal without any further delay.
Singapore arbitration court passes an injunction on Reliance’s proposed deal to buy Future Group’s assets
Amazon has filed a legal proceeding against this deal and has won an emergency order from the Singapore arbitration court to halt the proposed sale temporarily. According to sources familiar with the matter, the injunction will disallow Future Group from selling its assets to Reliance Retail by 90 days.
Last year, Amazon had indirectly bought a 3.58% stake in the retail business of the Future Group. The e-commerce giant reached out to the Singapore International Arbitration Centre earlier this month to prevent the proposed deal between the two Indian retail giants.
Following the agreement with Future Retail, Amazon had long term rights to sell Future’s products online
As per reports, the agreement between Amazon and Future Retail also included a non-compete clause. Entering an additional deal with Future Group this year, Amazon had received long term rights to sell Future’s products online.
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Following the injunction, the Amazon spokesperson said that the company is grateful for the order and will remain committed to an expedited conclusion of the arbitration process. The tribunal hearing is expected to start later this year. Future Group has not yet commented on Amazon’s objection and has entered the deal with Reliance Retail.
Deal with Future Retail conducted under proper legal advice and enforceable under Indian law, says Reliance spokesperson
Currently, it is unclear whether the injunction is enforceable in India. A Reliance industry spokesperson said that Reliance Retail’s transactions for the acquisition of assets and business of Future Retail were conducted with proper legal advice and under obligations that are fully enforceable under Indian law. He further stated that Reliance Retail also intends to enforce its rights and complete the transaction with Future Group.
The legal proceeding in Singapore is a surprise to many in the industry as Amazon prepares to acquire a multi-billion dollar stake in Reliance Retail. Several Industry analysts consider Amazon’s reported deal with Reliance Retail as crucial for the e-commerce firm’s future in India. To date, the e-commerce giant has invested around $6.5 billion in the local business in the country.