Amazon has been trying to break off the deal between the Future Retail Group and Reliance. As a part of the deal, the Future Retail Group has announced their plan in selling its supermarket chains, clothing supermarkets, logistics and warehouse units to the Reliance group of industries under its retail sector in the year 2020.
Amazon has considered this deal as a breach of contract with Future Retail Group as being an investor in the future coupons and one of the shareholders in the future retail group. In the agreement between Amazon and the Future Retail Group in 2019, Amazon had arranged on an option known as “call” to purchase all or half part of the Future Retail Group within a span of three to ten years.
Amazon has taken this issue with Future Retail Group to arbitration SIAC (State Institute for Administrative Careers) and the ruling was in favour of Amazon. Later on, Future Retail Group has approached the Delhi High Court condemning Amazon’s interference in this deal to be considered unlawful. The High Court has mentioned that it would not stop the deal or would refuse Amazon from restriction for appealing to the authorities at the statutory by placing this deal on hold.
Then Amazon took this issue to the Supreme Court, where the court has agreed to the judgement made by the SIAC bypassing the ruling in favour of Amazon.
To continue the deal with the Reliance, Future Retail Group has decided to file a petition appeal against the Supreme Court under section 37(20) of the arbitration act against the EA (Emergency Arbitrators) award.
Meanwhile, the decision is still pending by SIAC. If this deal is considered as a breach of contract between Amazon and Future Retail group then the other deal between Reliance and Future Retail Group would be agreed to go ahead.
As a result, shares of the Future Retail has seen a drop by 2 per cent, considering this as a drawback for the deal with Reliance to sell its few assets still being on hold.
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