The fruition of the Future-Reliance deal went into jeopardy from the very moment Amazon interfered and turned it into a pickle. But after the Delhi High Court’s recent move, it now seems like the deal is bound to be stuck in limbo for a very long time.
On Tuesday, the Delhi HC put a halt on Future Group’s sale of assets to Reliance Industries Ltd. aka RIL until the “pronouncement of the reserved order”.
According to the court, it held prima facie view of the Singapore tribunal order, which asked Biyan’s Future Retail to not proceed ahead with its deal with RIL, enforceable in India as well.
Previously Amazon, in its multiple petitions to SEBI and various other legal and regulatory bodies, alleged that the Future-RIL deal was a gross violation of their investment agreement with Future Group and therefore the Biyani owned firm must be barred from selling its assets to Ambani’s telco-petroleum conglomerate.
Nonetheless, now that the court has passed its observation stating that the Singapore tribunal order is enforceable in India as well, the Bezos-owned e-commerce giant has achieved an interim victory they have been longing for since the very beginning when the deal was announced.
On 25th January, Amazon had approached the Delhi High Court with a plea that sought the detention of Future Group founders along with its promoter Kishore Biyani and the seizure of their assets for violating the Singapore tribunal order.
In the month of October 2020, the tribunal passed an interim order which visibly favoured Amazon over Future Group and barred the later from taking any steps to sell their assets.
The Fight For The Crown Of Indian Retail Space Continues
Kishore Biyani’s Future Group is now stuck between rock and a hard place as it can neither legally complete the deal nor risk going bankrupt because of the delay. All thanks to Amazon sticking a fork between the transaction.
Now, one can surely understand that this entire debacle is the outcome of both Amazon and Reliance wanting to establish the majority controlling stake in India’s retail market – a space which is posed to reach a whopping $1.3 trillion by 2025, fuelled by a surge in online shopping post the pandemic.
Currently, Amazon and Walmart-owned Flipkart together control over 80% of the Indian online retail space and now they wish to make inroads into India’s traditional and offline retail market as well – something which for long was dominated by Biyani and now by Reliance Retail.
As of now, Reliance has declined to comment on the situation but an Amazon spokesperson, in a statement, said they have the utmost respect for the Indian legal system and appreciate the interim order which enforces the emergency Singapore arbitrator’s order.
On the other hand, a spokesperson from Future Group said the company is going to explore all legal remedies and take appropriate steps to ensure their original plan of action is executed.
What more surprises will be thrown Future Group’s way? Only the future can tell. But, we will keep you updated on all developments. Until then, make sure to stay tuned.