Future-Reliance deal: Blow for Biyani as SC upholds Singapore arbitration award valid under Indian law

In a big win for Amazon, the Supreme Court (SC) on Friday ruled Singapore’s Emergency Arbitrator (EA) award was valid under Indian law and can be enforced, restraining the Rs 24,731 crore Future Group-Reliance Retail deal.

The two-judge bench of Justices RF Nariman BR Gavai announced the verdict at 10.30 am and had reserved the same on July 29. The verdict comes almost a year after Reliance Retail announced that will buy Future Retail Ltd’s (FRL’s) wholesale, logistics and warehousing businesses for Rs 24,713 crore in August 2020.

Amazon which had bought a 49% stake for Rs 1,431 crores in Future Coupons, of which FRL is a subsidiary, objected to the deal and sought arbitration by Singapore’s Emergency Arbitrator (EA) against it.

In October 2020, a Singapore-based EA passed an interim order in favour of Amazon restraining FRL’s merger with Reliance Retail. Amazon submitted that it bought a 49% stake in Future Coupons with the understanding that FRL won’t transfer or sell its retail assets to “restricted persons”, including the Reliance Group, without Amazon’s consent.

This resulted in a legal battle between FRL and the e-commerce giant over the validity of the merger which remains stalled till date.

Amazon’s appeal had claimed that Future Retail’s proposed deal with the Reliance Group is in fundamental violation of the core understanding of Amazon’s investments with the Future Group.

While Future Retail had maintained through its lawyers that the Code of Civil Procedure governs the execution of an arbitral award, Amazon claimed that the issue falls under the ambit of the Arbitration Act. Amazon accused the Biyanis of “rank dishonesty and commercial immorality” for wilfully flouting the Arbitrator’s order despite being bound by the arbitration agreement. It had maintained that the arbitral order to stall the FRL-Reliance Retail deal is legal and valid under Indian law.


V. K. Unni Professor of Law, IIM Calcutta said, “Today’s Supreme Court decision is a big victory for Amazon in its fight against Future Coupons Pvt. Ltd. Supreme Court has given its green signal to the enforcement of Emergency Arbitration Award passed by a Singapore Tribunal in October 2020 (based on a plea by Amazon) that has stayed the deal between Reliance and Future group”.

Reliance Industries stock slumped after the verdict. It was last seen trading at Rs 2,096.50 down by 1.7% or Rs 37.75 on the NSE.


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