SINGAPORE EMERGENCY ARBITRATION TO AMAZON’S RESCUE

SINGAPORE EMERGENCY ARBITRATION TO AMAZON’S RESCUE

On 25th October, Amazon won a favourable ruling in an Emergency Arbitration led by the Singapore International Arbitration Centre (SIAC). This ruling was given in the dispute between the Futures Groups and Future Coupons which is a Kishore Biyani controlled organisation owning various retail outlets including Big Bazar. Amazon invoked these proceedings under the shareholder’s agreement with its promoters i.e. the Future Group.  

The Future Groups (respondent) is now debarred from entering into an agreement with Mukesh Dhirubhai Ambani Group’s Reliance Retail Ventures. This injunction also prohibits the respondent from taking the plunge towards the Board Resolution dated August 2020 in relation to the transaction with Reliance. Additionally, this injunction prohibits the respondents from applying or filing any applications before any other authority or Agency in India. Per this ruling, the respondents can no longer complete their transactions with the organisation owned by Mukesh Dhirubhai Ambani.

Welcoming the arbitration order, Amazon said: “We welcome the award of the Emergency Arbitrator. 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.”

Although the formation of a tribunal may be time-consuming or the Tribunal is not in place, the SIAC has an alternative to execute an Emergency Arbitration session for granting interim relief. 

In 2019, a deal struck between Future coupons and Amazon giving 5% ownership of the former to the latter. Amounting to INR 1,430 Crore, a negative list exists which doesn’t let the Future Group transact with 30 entities. Mukesh Dhirubhai Ambani Group is a part of that list as well.

In August 2020, Reliance Retail Ventures Limited (RRVL) which is a subsidiary of Reliance Industries Limited acquired the wholesale, logistics and warehousing business of Future Groups. Reliance Retail had agreed to acquire the business for a total of Rs. 24,713 crore which will now not be possible, courtesy of this interim relief.

However, RRVL did not digest this interim order smoothly. RRVL said that it has entered into the transaction of acquisition of assets and business of Future Retail Limited with proper legal advice and complying with the rights and obligations are fully enforceable under Indian law. Further, it added that Reliance Retail wills to enforce its rights and finish the transactions in terms of the scheme and agreement with the Future Group without further ado.   Future Retail Limited (FRL) was legally advised that its board is in full compliance with the relevant agreement. Therefore, in the interest of all the shareholders, the transaction cannot be held back under arbitration proceedings to which Future Retail is not a party. Further, it also added, “As per the advice received by FRL, all relevant agreements are governed by Indian Law and provisions of Indian Arbitration Act for all intents and purposes and this matter raises several fundamental jurisdictional issues which go to the root of the matter.”

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