The battle for India’s booming eCommerce business got murkier today with the Delhi High Court restraining Future Retail from proceeding with its Rs.24,713 crore ($3.4 billion) acquisition deal offered by Reliance Industries. The court held that Future had “wilfully violated” the arbitration order given by a Singapore court.
Justice J R Midha also directed that the properties of Kishore Biyani and others associated with the Future Retail be attached and that it’s directors deposit Rs.20 lakh to the Prime Minister’s Relief Fund for providing Covid-19 vaccines to senior citizens who were listed as being below sustenance levels by the government.
This represents a blow to the Future Retail, who had approached the Delhi High Court with a fresh appeal last month after the it had put the deal with Reliance on pause. The legal wrangle was a result of Amazon.com seeking recourse on claims that the deal violated its own contract with Future Retail.
The company had claimed in court that it was under threat of insolvency and sought a review of the earlier order to allow it to proceed with deal with Reliance, which is India’s largest private enterprise with interests in petroleum, retail and telecom.
Future Retail had filed a modification application with the Singapore International Arbitration Centre (SIAC) seeking a review of its interim ruling in October. Reports said the application was filed on March 11 seeking an interim stay on the emergency arbitration order and removing it from its scope till the final outcome is decided.
Meanwhile, single-judge bench of the Delhi High Court today refused to change its stance on an earlier order asking why the Future Retail directors should not be detailed for three months for violating the emergency order from the SIAC.
A statement from Future sought to put things in perspective suggesting that today’s order would have no bearing on the status quo of the case as it was already before the Supreme Court. The next hearing at the apex court is scheduled in April, it said adding that the National Company Law Tribunal (NCLT) was allowed to continue with its proceedings on the insolvency issue.
On February 8, the Delhi High Court had stayed an earlier order asking Future Retail and various statutory authorities to maintain status quo on the mega deal.
The three parties — Amazon, Reliance and Future — are putting a spirited fight with reason. For at stake is several thousands of crores of rupees and the bragging rights in the highly lucrative in Indian retail and eCommerce market.
The deal between Future Retail and Reliance Retail Ventures was questioned by Amazon, which contented it had acquired 49% stake in one of Future’s unlisted firms in 2019 and as such should have sought its approval for the acquisition by a rival.
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