Future Retail will go into liquidation if its deal to sell assets to Reliance Industries fails, the group told a Singapore arbitrator while arguing against Amazon.com Inc’s bid to scupper the deal, a legal order seen by news agency Reuters showed.
Amazon on Sunday won an injunction from a Singapore arbitrator to halt Future Retail’s deal to sell assets to Reliance. Amazon alleged Future Retail had breached certain contract provisions it entered into last year in a separate deal with the US firm.
The dispute centres around Future Retail’s decision in August to sell its retail, wholesale, logistics and some other businesses to Reliance Industries for $3.38 billion, including debt.
Amazon argues that a 2019 deal it had with a Future unit had clauses saying the Indian group couldn’t sell its retail assets to anyone on a “restricted persons” list including any firms from Reliance Industries chief Mukesh Ambani’s group. The deal specified any disputes would be arbitrated under Singapore International Arbitration Centre rules.
Shares in Reliance Industries and Future Retail fell on Monday. Both companies reacted to the arbitrator’s decision by saying they want to complete the deal “without any delay”, setting the stage for a showdown between Reliance Industries and Amazon – each led by one of the world’s richest men.
A 130-page order by the arbitrator reveals how Jeff Bezos-led Amazon argued that Future breached agreements which barred it from selling retail assets to entities including Reliance, whose boss Mr Ambani is Asia’s richest man. It also shows the level of concern at Future if the deal breaks.
Future’s retail unit – which has more than 1,500 outlets – will need to pack up if the transaction with Reliance doesn’t go through, hitting the livelihoods of thousands of employees and workers at its vendor firms, the Indian group argued before the arbitrator, according to the order which is not public.