Amazon won an injunction on Oct 25 from the Singapore arbitrator to halt a deal between India’s Future Retail Ltd (FRL) and Reliance Industries. But FRL on Sunday, said that the Singapore arbitrator’s order is not enforceable under Indian law and is not binding on the company.
FRL decided in August that it is going to sell its retail, wholesale and some other businesses to Mukesh Ambani’s Reliance Industries for $3.38 billion. But Amazon says that according to its own deal with a Future Retail unit, which it signed in 2019, the company cannot sell its retail assets to Reliance, as the deal contained clauses which stops it from selling them to anyone on the “restricted persons” list. This list seems to include any firms from Reliance chief Mukesh Ambani’s group, thus making the Reliance-FRL deal invalid, according to Amazon. The deal also specified that any disputes occurring would be arbitrated under Singapore International Arbitration Centre rules
FRL has called the proceedings before the “emergency arbitrator” void. “FRL is also in the process of taking appropriate legal action to protect its rights,” the company’s regulatory filing said on Sunday.
Reuters reported on Saturday, that the American e-commerce giant has complained to the Indian market regulator to look into the issue, saying that FRL is misleading the shareholders by incorrectly saying that it is complying with its contractual obligations referring to the 2019 deal. However, FRL in its regulatory filings on Sunday, still insists that the company had complied with all regulatory requirements and urged the Indian market regulator and stock exchanges to continue to review its deal with Reliance for approval.
FRL said that it is going to resist any attempts made by Amazon to stop its deal from taking place. The new developments suggest a growing tension between the e-commerce giant and India Future Retail Ltd along with Mukesh Ambani led Reliance Industries, while each party is uncompromisingly defending its side. Reliance too had said something similar last week, claiming that deal is completely enforceable under the Indian law and will be completed soon without any delay.
The resolution to the dispute depends on FRL-Amazon deal which took place in 2019, and whether FRL has failed to comply with its regulatory requirements as Amazon has claimed.
