Case Details

The buyout deal between KISHORE BIYANI leads FUTURE GROUP and MUKESH AMBANI leads RELIANCE INDUSTRIES is pending before the country’s apex court. The Future Group had in august 2020 entered into an agreement with Reliance Retail, a subsidiary of Reliance industries, to sell its retail, wholesale, warehousing and logistics business for nearly ₹24713 crore.

Back in august 2019, the future retails had another deal with amazon. As a part of this deal amazon had acquired 49% stake in future coupons. Future coupon is a promoter group entity of future retails and holds 7.3% stake in future retail. This means that amazon holds 3.5% in future retails indirectly.

At the time of deal, Amazon had set a condition for Future Group not to sell its assets to a list of companies which include MUKESH AMBANI’s Reliance Industries.

According to this, the whole deal between Reliance and future is invalid and violation of its 2019 agreement. Besides the transaction part, Amazon had acquired certain leverage with the CALL OPTION it was provided. The call gave Amazon the rights to exercise the option of aquiring all the part of promoting company Future Retail’s shares.

As a result, Amazon first sent a legal notice to future group and having got no response from latter, in October 2020, Amazon approach the SINGAPORE INTERNATIONAL ARBITRATION CENTRE (SIAC), a non-profitable organization that offers an alternative dispute resolution process arising from cross-border transactions claiming that future group had violated the contract.

On October 25, 2020 The SIAC passed an interim order in favour of Amazon. Amazon sent a letter along with SIAC interim order to INDIAN MARKET regulator SEBI and CCI because Future Group and Reliance refused to comply to the order of SIAC. They said there is no mechanism available in INDIA that enforces International Arbitration’s order.

After the SIAC’s emergency award, Future Retail approached Delhi High Court in November 2020 arguing that the interim order by SIAC was passed without jurisdiction as the concept of Emergency Arbitrator is alien to Indian Arbitration Act. Future requested the court to injunct Amazon from writing letters to SEBI and CCI.

Future group promoters, including Kishore Biyani and several group holding companies, had approached the supreme court against an order passed by the Delhi High Court directing to enforce the order of the Singapore based arbitration. The company also stated that “ here is extreme urgency to hear and stay the impugned orders” passed by the single member bench of Delhi High court, failing to which the company would go acquired the retails business of Future Group which will make it one of the biggest competitors to Amazon, D mart and flipkart (owned by WALMART) in India.

According to the Future Group, if the deal with Reliance in not approved, The company have no option but to bring down the shutters and this will directly affect the employment of more than 29000+ people.

Written by
Babita Sharma (CMA)