FRL tumbled 5.27% to Rs 73.70 while RIL fell 1.97% to Rs 2070.95 on the BSE today.
On Sunday (25 October 2020), Amazon.com won an interim award against its partner Future Group, as a Singapore-based single-judge arbitration court restrained FRL from selling its retail business to RIL. Passing an interim award in favour of Amazon, VK Rajah asked the Future group to put the deal on hold and said that the deal cannot go through until it finally decides the matter, reports added.
In a BSE filing made before market hours today, FRL said it was examining the communication and the order received from the Singapore International Arbitration Centre (SIAC).
Also Read: Amazon Wins Interim Order, Future-Reliance Retail Deal Stalled
“FRL has been legally advised that actions taken by the FRL / its board, which are in full compliance of 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,” the company said.
It said that in any enforcement proceedings, FRL would take appropriate steps to ensure that the proposed transaction will proceed unhindered without any delay.
RIL’s subsidiary Reliance Retail Ventures (RRVL) said that it had entered into the transaction for acquisition of assets and business of Future Retail 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.
On 29 August 2020, RRVL announced acquisition of the retail & wholesale business and the logistics & warehousing business of the Future Group as going concerns on a slump sale basis for Rs 24,713 crore.
RIL said that the acquisition of the retail, wholesale and supply chain business of the Future Group complements and makes a strong strategic fit into Reliance’s retail business.
Early in October, the US-based e-ecommerce major Amazon.com had sent a legal notice to Future Group citing its non-compete agreement with the Kishore Biyani-led chain. According to the notice, the Future-RIL transaction cannot go ahead without Amazon’s approval in view of the non-compete clause entered earlier with the retail group.
Amazon has about 5% stake in FRL after it bought 49% in Future Coupons for Rs 1,500 crore last year in August.
The multinational online retailer reportedly said that the sale to RRVL violated the non-compete agreement and several related clauses mentioned in an August 2019 contract through which it had bought the stake in Future Coupons. As per Amazon, the contract stipulated that Future cannot sell any shares to any other competitor and that Amazon had the right of first refusal.
