Jeff Bezos, Mukesh Ambani set for long-drawn war over Future Retail
After a Singapore arbitration court ordered a temporary halt in the acquisition process, Future Retail has hinted at challenging the interim order
As Reliance Industries Ltd (RIL) stepped into the e-commerce space with JioMart, speculations ran rife over two of world's richest individuals up for a confrontation in the market. But RIL's proposed acquisition of Future Group's retail business has just pitched both behemoths, Jeff Bezos' Amazon and Mukesh Ambani's RIL, against each other in a legal battle, which now seems to be heading towards a long-drawn war.
After a Singapore arbitration court ordered a temporary halt in the acquisition process, Future Retail has hinted at challenging the interim order.
Indicating that the matter should not have been dealt with by an overseas arbitration court, Future Retail said that all the relevant agreements are governed by Indian law and provisions of the Indian Arbitration Act for all intents and purposes and "this matter raises several fundamental jurisdictional issues which go to the root of the matter".
According to Future, the order will have to be tested under the provisions of Indian Arbitration Act in an "appropriate" forum.
Sources close to Amazon, however, said that the eventuality of moving to Singapore International Arbitration Centre (SIAC) in case of an issue in the deal was part of the agreement done between Future and Amazon, in which Amazon acquired a 49 per cent stake in Future Coupons, a Future group entity.
As the final order in the matter is yet to come from the arbitration court, Future Retail's statement that the need to test the order under the Indian Arbitration Act in an "appropriate" forum shows that the another front might be opened up for the battle, this time in an Indian court.
Post the interim ruling, an Amazon spokesperson had said on Sunday: "We welcome the award of the Emergency Arbitrator. We are grateful for the order which grants all the reliefs that were sought. We remain committed to an expeditious conclusion of the arbitration process."
Sources said that even if Future approaches a legal forum in India, the arbitration in Singapore will continue.
This very battle, is as much important for Mukesh Ambani-led RIL, as it is for Kishore Biyani-led Future, as this very deal would have made Reliance Retail a retail behemoth. As per several analysts, Reliance Retail would become the third largest retailer in the world.
Showing its resolve to complete the proposed acquisition, Reliance Retail Ventures Ltd on Sunday said that it intends to enforce its rights and complete the transaction in terms of the scheme and agreement with Future group without any delay.
The arbitration also features legal eagles. Harish Salve appeared for the Future Retail (being acquired by RIL) while Singapore-based lawyer Davinder Singh appeared on behalf of Future Coupons Pvt Ltd.
Gopal Subramanium, former Solicitor General of India, appeared for Amazon.
Earlier this month, Amazon said that Future Group violated a contract with it by entering into the sale agreement with the Mukesh Ambani-led retail major.
Last year, Amazon acquired a 49 per cent stake in Future Coupons, a Future group entity.
In August, Reliance Retail Ventures Ltd (RRVL), a subsidiary of RIL, had announced that it is acquiring the retail, wholesale, logistics and warehousing business from the Future Group as going concerns on a slump sale basis for lumpsum aggregate consideration of Rs 24,713 crore, subject to adjustments as set out in the composite scheme of arrangement.
The acquisition is part of the scheme in which the Future Group is merging certain companies carrying on the aforesaid businesses into Future Enterprises Ltd (FEL).
The fight between two of world's richest tycoons, Bezos and Ambani seems unlikely to end anytime soon.
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