38.6c New Delhi, India, Tuesday, July 23, 2024

Future-Reliance Divestment Deal: SIAC decides to proceed with Arbitration proceedings

By Dev Kumar Patel      30 November, 2020 02:48 PM      0 Comments
Future Group Reliance Insdustries SIAC Arbitration

Earlier this week, SIAC (Singapore International Arbitration Centre) had rejected the Future Groups contention that Future Retail, which is to engage in a proposed divestment deal with the Reliance Groups retailing arm, be excluded from the arbitration. 

The matter has been triggered after Amazon objected to the divestment deal. The SIAC dismissed the jurisdictional objections raised by the Future Group on a prima facie basis.

The SIAC decided to proceed accordingly. A tribunal will be constituted in this matter for both Future Retail and Future Coupons, in which Amazon has a 49 percent stake. 

In October 2020, a single-judge bench of V K Rajah had granted an interim arbitration award, barring Future Retail Ltd (FRL) from taking any step to dispose of or encumber its assets or issuing any securities to secure any funding from a restricted party.

In August 2019, Amazon bought a 49 percent stake in one of Kishore Biyani-led Future Group's unlisted firms Future Coupons Ltd (FCL) with the right to buy into the listed flagship FRL after a few years, if the government were to undo its bar on foreign ownership of multi-brand retailers.

Due to the Nationwide lockdown imposed to curb the COVID-19 outbreak, FRL soon ran into a severe cash crunch. Therefore, FRL decided to sell assets for Rs 24,713 crore to Reliance Industries Ltd (RIL).

Then, Amazon dragged FRL to arbitration at SIAC claiming that its contract with the unlisted FCL barred a transaction with a number of persons and companies, including Reliance.

Amazon has also written to markets regulator SEBI and Stock Exchanges, urging them to take into consideration the Singapore arbitrator's interim judgment that has put on hold the Rs 24,713-crore deal between Future group and RIL while reviewing the proposed transaction.

Last week, the Competition Commission of India has also approved the Rs 24,713- crore divestment deal between Future Retail and Reliance.

FRL has dragged the e-commerce giant to Delhi High Court for disrupting its transaction with Reliance Group. FRL seeks "reliefs" against Amazon from "interfering" with its RIL deal and alleged that the e-commerce giant was "misusing" an interim order passed by a Singapore arbitrator. Last week, the Delhi High Court reserved its order on the application.

In international arbitration, submissions and pleadings that contesting parties make are most time-consuming. However, once the arbitration starts, the endeavor is to complete in a time-bound schedule, said Nishit Dhruva, managing partner of law firm MDP & Partners. Once the final award comes, the parties can come to India for its enforcement. 

In the latest development to the arbitration proceedings, Amazon has suggested Brussels-based Albert Jan van den Berg, a founding partner of law firm Hanotiau & van den Berg, while the Future Group has nominated Swedish arbitration veteran and founding partner of Three Crowns LLP, Jan Paulsson for the matter.

Share this article:

Leave a feedback about this

Trending Judiciary
SC halts directive mandating name displays for hotel owners during Kanwar Yatra [Read Order]

The Supreme Court halts directives mandating name plates for hotel owners during Kanwar Yatra, citing concerns over exclusion and economic boycott.

22 July, 2024 02:53 PM
Trending Judiciary
NEET-UG: SC asks IIT-Delhi to apprise it of correct answer of a question where two options are found as correct

SC asks IIT-Delhi to determine correct answer for NEET-UG question with two correct options, report due by 12 PM Tuesday; court to hear further on re-test plea.

23 July, 2024 09:26 AM


Trending Judiciary
State govt has got no power to tinker with list of Scheduled Castes: Supreme Court [Read Judgement]

The Supreme Court ruled that state governments lack the authority to modify the Scheduled Castes lists, a power reserved exclusively for Parliament under Article 341.

17 July, 2024 09:31 AM
Trending Judiciary
SC asks Telangana govt to replace judge in Commission of Inquiry into power pact by previous govt

SC directs Telangana govt to replace Justice L Narasimha Reddy in Commission of Inquiry probing former CM KCR's alleged power sector irregularities.

17 July, 2024 09:40 AM
Trending Judiciary
Centre notifies appointments Justice N Kotiswar Singh, Justice Mahadevan as SC judges

Centre notifies appointments of Justice N Kotiswar Singh and Justice R Mahadevan as Supreme Court judges, marking the first SC judge from Manipur.

17 July, 2024 09:57 AM
Trending Judiciary
Imprisonment till rising of court not proper sentence for serious offence of bigamy: SC [Read Judgement]

The Supreme Court ruled that “imprisonment till the rising of the court" is not appropriate for bigamy, a serious offence, stressing the need for proportionate punishment.

17 July, 2024 10:00 AM


Join Group

Signup for Our Newsletter

Get Exclusive access to members only content by email