An interim injunction restraining Amazon from writing to SEBI, CCI and other authorities regarding the order of arbitral against its sale of assets got declined for granting to the plea of the Future Retail Ltd’s (FRL) by the Delhi High Court on Monday. It was in November when the FRL leader, Kishore Biyani accused adoption of a media strategy by Amazon for having reports of every development and converted into a line of communication with stock exchanges concerning the proceedings of Amazon-Future Coupon in Singapore. The resolution of the FRL was also termed by the court and approved the transaction with Reliance Retail as valid.
Deal of Future-Reliance
The Future Group of Biyani entered into an agreement in August of this year with Reliance Retail to sell its wholesale and retail warehousing and logistics to the latter. Reliance Retail is a subsidiary of the umbrella Reliance Industries Limited (RIL) group. According to the deal retail and wholesale units of the supermarket chain Big Bazaar, clothes supermart Brand Factory, and premium food supply unit Foodhall to Reliance Retail by the Future Retail. Immense pressure was there on the Future Group from its lenders for managing its debt. The group saw the deal as a bid for cutting down on the same.
Amazon objecting to the deal
Future Retail of Biyani had signed another deal last year with the global e-commerce giant, Amazon. The deal was worth nearly Rs 2000 crore wherein Amazon acquired 49 per cent stake in the Future Coupons. Amazon said after the deal of Future Retail with Reliance was a violation of a non-compete clause and a right-of-first-refusal pact which they had signed with the Future Group. It is also required in the deal that Amazon was to be informed by the Future Group before entering into any sale agreement with the third parties. But, Future Group is saying that it is selling only its assets of the company and not any stake. Hence, there is no violation of the contract by them.
Decision of the High Court of Delhi
A plea also got moved by FRI against Amazon.com seeking appropriate relief and also stops the latter from interfering in its deal with Reliance Retail Ventures Limited and Reliance Industries Limited. A letter was also sent to the Singapore Exchange Securities Trading Limited, Department of Corporate Services of the Bombay Stock Exchange (BSE), and the listing department of the National Stock Exchange by Amazon asking them not to approve the deal. FRI said the application was taken to High Court so as for preventing of misusing by the SIAC’s passed interim order.
Delhi High Court also upheld the award given by the arbitrator as valid and the regulators and statutory authorities can take any decision in accordance with the law. The e-commerce giant will be allowed to make its case on the basis of mainly of arbitration award now that the Amazon is failed to stop by the Future Retail from presenting itself to the various government bodies and regulators.