A Singapore arbitration panel has put on hold Future Group's $3.38 billion asset sale to Reliance Industries Ltd, an interim win for Amazon.com Inc, which had alleged the deal between the Indian firms breached existing agreements.
Amazon received an emergency order to halt the companies from proceeding with the deal until an arbitration tribunal is formed, a source with direct knowledge of the matter told Reuters.
Amazon last year bought a 49% stake in Future Coupons Ltd, which owns a 7.3% stake in Future Retail. In August, Mukesh Ambani's Reliance decided to buy retail, wholesale and some other businesses of Future Group FURE.NS in a deal valued at $3.38 billion, including debt.
But Amazon's investment came with contractual rights that include a right of first refusal and a non-compete-like pact, media had reported, and Amazon later started arbitration proceedings in Singapore.
"It's a comprehensive victory for Amazon"
"It's a comprehensive victory for Amazon," a source with direct knowledge of the decision said. "They've won an injunction to stop the deal." Two sources familiar with the matter said the temporary injunction was not automatically enforceable in India and that the order would have to be ratified by an Indian court.
In a statement, Amazon said: "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." Reliance Retail intends to complete the transaction under the terms of the agreement with Future Group without any delay, Reliance Retail Ventures Ltd (RRVL) said in a statement on Sunday.
"RRVL has entered into the transaction for acquisition of assets and business of Future Retail Limited under proper legal advice and the rights and obligations are fully enforceable under Indian Law," the statement added.
Future Group was not immediately reachable for comment.