Lawstreet Journal

Future-Reliance Divestment Deal: SIAC decides to proceed with Arbitration proceedings

Lawstreet Journal 30 Nov 2020 8:18pm

Image courtesy: Lawstreet Journal Business Future-Reliance Divestment Deal: SIAC decides to proceed with Arbitration proceedings

Earlier this week, SIAC (Singapore International Arbitration Centre) had rejected the Future Group’s contention that Future Retail, which is to engage in a proposed divestment deal with the Reliance Group’s retailing arm, be excluded from the arbitration. 

The matter has been triggered after Amazon objected to the divestment deal. The SIAC dismissed the jurisdictional objections raised by the Future Group on a prima facie basis.

The SIAC decided to proceed accordingly. A tribunal will be constituted in this matter for both Future Retail and Future Coupons, in which Amazon has a 49 percent stake. 

In October 2020, a single-judge bench of V K Rajah had granted an interim arbitration award, barring Future Retail Ltd (FRL) from taking any step to dispose of or encumber its assets or issuing any securities to secure any funding from a restricted party.

In August 2019, Amazon bought a 49 percent stake in one of Kishore Biyani-led Future Group's unlisted firms “Future Coupons Ltd (FCL)” with the right to buy into the listed flagship FRL after a few years, if the government were to undo its bar on foreign ownership of multi-brand retailers.

Due to the Nationwide lockdown imposed to curb the COVID-19 outbreak, FRL soon ran into a severe cash crunch. Therefore, FRL decided to sell assets for Rs 24,713 crore to Reliance Industries Ltd (RIL).

Then, Amazon dragged FRL to arbitration at SIAC claiming that its contract with the unlisted FCL barred a transaction with a number of persons and companies, including Reliance.

Amazon has also written to markets regulator SEBI and Stock Exchanges, urging them… Continue Reading...

Tagged: Reliance Industries   Reliance Industries Limited  
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