Supreme Court has ruled in favour of Amazon Inc.’s efforts to halt the sale of indebted, cash-starved Future Retail Ltd to Reliance Industries Ltd, in a big boost to the global retailing giant’s ambitions of dominating the crucial $ 1 trillion retail market.
Reading the operative part of the verdict, Justice Rohinton F Nariman ruled that the order of Singapore emergency arbitrator that halted the $ 3.4 billion deal was enforceable in India.
Last week, the apex court had reserved its judgment in the case about the ruling by a Singapore tribunal restraining Future from going ahead with its merger with Reliance.
The bench of Justice RF Nariman dealt with the larger question and held that an award of an EA of a foreign country is enforceable under the Indian Arbitration and Conciliation Act despite the fact that the term EA is not used in arbitration laws here.
The verdict is the end of the local chapter of a bitter battle between Jeff Bezos-founded Amazon and India’s second-largest supermarket chain that Mukesh Ambani’s Reliance Industries wants to acquire. The two behemoths, owned by two of the world’s richest men, are fighting for a bigger slice of the only billion-people plus consumer market that’s still open to foreign firms.
Reliance Industries, helmed by Asia’s richest man Mukesh Ambani, and the distressed Future Retail will now have to fight it out in the arbitration proceedings at Singapore.
The fight highlights the stakes in India’s rocketing retail market where American retailers Amazon and Walmart Inc.-owned Flipkart are battling billionaire Mukesh Ambani’s homegrown leader for supremacy. Amazon has pledged $ 6.5 billion investment in the market while Flipkart recently garnered $ 3.6 billion in the country’s largest fund raise at a valuation of nearly $ 38 billion.
The verdict is a setback for Mukesh Ambani, who owns the country’s largest retail chain and is fast expanding his e-commerce offerings but was relying on Future’s brick-and-mortar stores to add to its footprint.
Amazon, which owns a stake in another unlisted Future unit, went to the Singapore arbitration court accusing the Future Group of violating a partnership contract when it agreed to sell Future Retail’s wholesale, warehousing, logistics and other retail assets to Mukesh Ambani’s conglomerate last year.