Future Retail hints at challenging arbitration award
New Delhi: Kishore Biyani-led Future Retail on Monday hinted at challenging an arbitration order that put a temporary hold on its Rs 24,713 crore deal to sell assets to Reliance Industries.
Future Retail said it wasn’t party to the agreement under which Amazon.com Inc had invoked arbitration proceedings.
Amazon, which acquired an indirect minority stake in the retail and fashion conglomerate last year, alleged that Future’s sale of its retail, wholesale, logistics and warehousing businesses to Reliance breached its pre-existing contract, which included a right of the first offer and a non-compete clause.
On Sunday, the Singapore International Arbitration Centre restrained Future Retail and its founders from going ahead with the sale until a final decision is given.
In a statement, Future Retail Ltd (FRL) said it is “examining” the communication received from the SIAC and the interim order of the Emergency Arbitrator.
“It may be noted that FRL is not a party to the agreement under which Amazon has invoked arbitration proceedings,” it said.
“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.” It went on to state that all relevant agreements are governed by Indian law and provisions of the Indian Arbitration Act.
Stating that the interim arm “raises several fundamental jurisdictional issues which go to the root of the matter,” the firm said the order will have to be tested under the provisions of the Indian Arbitration Act in an appropriate forum.
“In any enforcement proceedings, FRL would take appropriate steps to ensure that the proposed transaction will proceed unhindered without any delay,” it said without giving details.
Reliance Retail Ventures Ltd (RRVL), a unit of billionaire Mukesh Ambani’s Reliance Industries Ltd, in a statement on Sunday evening stated that it had “entered into the transaction for the acquisition of assets and business of Future Retail Ltd 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 had said.
