The Singapore International Arbitration Centre (SIAC) has turned down Future Retail’s plea to lift the interim stay on its Rs 24,700 crore deal with Reliance Retail, providing a boost to Amazon’s challenge that the deal was in violation of the agreement that it had with Future Coupons, the parent firm of Future Retail.
The arbitration centre’s rejection of lifting the stay comes a day after it had ruled that Future Retail would be considered a party to the ongoing arbitration between Amazon and Future Group despite the former claiming otherwise.
In its plea, Future Retail had, before the SIAC, said that since it is not a party to the dispute between its own promoter Future Coupons and Amazon, it should be left out of the arbitration.
In a filing with the exchanges on Friday, Future Retail said that it had received the arbitration centre’s decision on its plea, which said that the orders set out in the emergency arbitrator’s award of October 25, 2020 were correctly granted and that they have not been “vitiated by any subsequent events or proceedings”.
In August last year, Kishore Biyani-led Future Retail’s Rs 24,713 crore deal to sell its retail, wholesale, logistics and warehousing units to Reliance Retail came under legal trouble, with Amazon claiming its “contractual rights” have been violated.
This was because in 2019, Future Retail had signed another deal with Amazon. As part of the deal, Amazon had acquired 49 per cent in Future Coupons, the promoter firm of Future Retail in a deal worth nearly Rs 2,000 crore.
As part of the deal between Amazon and Future Coupons, Future Retail would be able to place its products on Amazon’s online marketplace. It had given Amazon a ‘call’ option, which enabled it to exercise the option of acquiring all or part of Future Retail’s shareholding in the firm within 3-10 years of the agreement.