Court paves the way to allow deal between Reliance Industries & Future Group, a setback for Amazon
Delhi High Court has lifted the previous order on Monday that was blocking transaction between Future Group and Reliance Industries Ltd. worth $3.4 billion. Amazon.com Inc’s efforts to block the deal have thus been overturned.
With the new order by the court, Future Group can now sell its retail assets to Reliance Industries. Amazon has thus lost its legal advantage scored last week of preventing India’s billionaire Mukesh Ambani’s Reliance Industries from acquiring the retail business of Future Group that would help Ambani dominate the $1 trillion market. If this deal doesn’t materialize then Future Group will go bankrupt. The deal is essential for the group’s survival.
No comments have been forwarded by representatives from Amazon, Reliance Industries, and Future Group.
Singapore emergency arbitration tribunal’s order application is being sought by Amazon that in October said the deal must not be pursued by Future group. A customer loyalty promotion business was cited by Amazon that would restrict the asset sale of Future Group to Reliance and allowed an arbitrator based out of Singapore to settle the disputes. Future Retail however argues that Singapore’s emergency arbitration is not applicable in India. Reliance Industries and Future Group have restressed in the past over their commitment to closing the deal.
Detailed hearing of the lawsuit will begin on February 26 at Delhi High Court. The court is of the prime face view that the deal between Amazon and Future Group can’t be enforced in this case as Future Retail was not a part of the agreement. Appeal by Amazon’s legal team of delaying hearing has also been denied by the court.
Amazon Inc had filed a petition last month with Delhi High Court to detain Kishore Biyani, founder of Future Group, and further seize the group’s assets over violation of the order by an arbitration court.