Amazon has scored a major victory against the Indian industrial conglomerate – Reliance Industries Limited. The Supreme Court of India has stalled the takeover deal signed by Future Retail Group with Reliance Industries Limited. The $3.4 billion deal between the Future Retail group and Reliance envisaged a takeover of FRL’s retail and wholesale business by the Reliance group for a consideration of $3.4 billion.
Amazon, a minority shareholder in the FRL group, wanted to exercise its first right of refusal before Reliance could pick any business or stake in the cash-strapped and debt-ridden FRL group of Kishore Biyani. Subsequent to the deal being signed between the FRL and Reliance, Amazon approached the Singapore arbitration Court and scored a stall order against the deal. It had complained of a violation of the terms of its original contract by the FRL group.
Meanwhile, the companies approached the Indian courts to seek relief against the Singapore arbitration Court’s order, citing lack of jurisdictional powers of the Singapore Court against the Indian firms. However, the arbitration order was cleared by the Delhi High Court. Post this, Reliance approached the Supreme Court of India for relief against the Delhi High Court order and to set aside the arbitration order of the Singapore Court. However, the SC of India has clarified that the original agreement between FRL and Amazon stands violated due to this deal. And, the arbitration order of the Singapore court is legally binding in India.
It must be noted that this is an intermitted order that was passed by the Singapore arbitration Court that had ruled to set aside the sale of FRL business to Reliance. A final order on the dispute is expected at a later date.
For now though, Amazon has scored victory over Reliance in its bid to take over the business of Future Retail Limited.
Rajesh Dhawan is a technology professional who loves to blog about smart wearables, Cloud computing and Microsoft technologies. He loves to break complex problems into manageable chunks of meaningful information.