On Amazon's Plea, Arbitration Court Halts Deal Between Reliance And Future Group RRVL in a statement said it intends to enforce its rights and complete the transaction in terms of scheme and agreement with Future group without any delay
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Asia's richest man Mukesh Ambani has hit a roadblock after receiving a plethora of investments and acquiring a few businesses in the past seven months as e-commerce giant Amazon has got a favorable interim order against its partner Future Group on Sunday. A Singapore-based single-judge emergency arbitration court has told Future Group to halt its business transaction with Ambani's Reliance Retail Venture Ltd (RRVL) for the time being.
According to a Bloomberg report, Amazon had moved the court against Kishore Biyani's Future Group last week after alleging that the Future Group violated an agreement with the US-based e-commerce firm.
Reports suggest that Amazon in 2019 had bought a 49 per cent stake in Future Groups' Future Coupons Ltd with the right to buy into flagship Future Retail after three years to 10 years. Future Coupons owns 7.3 per cent of stake in Future Retail.
In September this year, however, Biyani sold retail assets of Future Group to RRVL, the retail subsidiary arm Reliance Industries Limited. The deal is supposed to allow RRVL to take over around 1,800 brick and mortar stores of Future Group which includes Big Bazaar, Nilgiris, Central, Brand Factory and FoodHall, among others. RIL currently operates around 11,500 stores at over 6,600 plus towns and cities.
Amazon pointed that with this deal, Future Group has violated an agreement with Jeff Bezos' company.
RRVL has taken cognisance of the interim order and said that it intends to enforce its rights and complete the transaction in terms of scheme and agreement with Future Group without any delay.
"RRVL has entered into the transaction for acquisition of assets and business of Future Retail Limited under proper legal advice and the rights and obligations are fully enforceable under Indian law," read the company statement.
According to the Bloomberg report, judges will now be appointed for the main tribunal hearings.
The interim order came at a time when both the heavyweights are eyeing to grab the majority share in the Indian e-commerce market which holds a megare single-digit share in the retail market of this country. A direct tussle between RRVL and Amazon will result in pitched competition.
Meanwhile, rival Walmart-owned Flipkart is acquiring a 7.8 per cent stake in Aditya Birla Fashion and Retail Limited, adding to heat in the Indian e-commerce market.
