A day after Amazon Inc. secured an interim order from Singapore International Arbitration Centre (SIAC) restraining Future Retail Ltd. (FRL) and Reliance Retail Ventures Ltd. (RRVL) to go ahead with their ₹24,713 crore assets acquisition deal, Future Retail said it was not party to the agreement under which Amazon has invoked arbitration proceedings and it would proceed with the proposed transaction ‘unhindered’ without any delay.
RRVL has also said that it would enforce its rights without delay.
“The company has received a communication from the SIAC, enclosing an interim order of the Emergency Arbitrator in the arbitration proceedings under shareholders’ agreement between Amazon, Future Coupons Private Ltd. and the promoter group,” Future Retail informed the BSE.
“The company is examining the communication and the order. It may be noted that the company is not a party to the agreement under which Amazon has invoked arbitration proceedings,” it said.
In a regulatory filing, the company said it had been legally advised that actions taken by the FRL or its board, which are in full compliance with the relevant agreements and eminently in the interest of all stakeholders cannot be held back in arbitration proceedings initiated under an agreement to which FRL is not a party.
“As per the advice received by FRL, all relevant agreements are governed by Indian law and provisions of Indian Arbitration Act... and this matter raises several fundamental jurisdictional issues which go to the root of the matter. Accordingly, this order will have to be tested under the provisions of Indian Arbitration Act in an appropriate forum,” it said.
“In any enforcement proceedings, FRL would take appropriate steps to ensure that the proposed transaction will proceed unhindered without any delay,” it added.
In a statement issued late Sunday, RRVL, the subsidiary of Reliance Industries Ltd (RIL), said it had entered into the transaction for acquisition of assets and business of Future Retail Ltd. under proper legal advice and “the rights and obligations are fully enforceable under Indian law.”
“RRVL intends to enforce its rights and complete the transaction in terms of the scheme and agreement with Future group without any delay,” it added.
Soon after the order, an Amazon spokesperson said, “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.”
“SIAC’s decision to put a stay on the sale of Future Group’s consumer business to RIL is unlikely to impact the latter’s credit profile, given its position as the leading retailer in India and its strong financial position.” Sweta Patodia, analyst, Corporate Finance Group, Moody’s Investors Service said.
“Nonetheless, the decision will likely delay RIL’s plans to expand its retail footprint in India,” she added.
RIL shares fell 4% to ₹2,028.70 and Future Retail shares plunged 5.08% to ₹73.85 on the BSE on Monday.