The $3.4 billion offer by Reliance Industries to purchase Future Retail has been stayed by the Singapore International Arbitration Centre (SIAC) in response to a claim filed by Amazon, according to a Reuters report on Monday (Oct. 26) that cited sources.
The emergency order from SIAC holds up the deal until an arbitration tribunal is formed, a source told Reuters.
Amazon is claiming the deal breaches current agreements. The eCommerce giant owns a 49 percent stake in Future Coupons, which owns a 7.3 percent stake in Future Retail.
The SIAC’s interim order is valid for 90 days; the arbitration panel will reach a final verdict during that timeframe.
Future Retail told Reuters that it was looking into the SIAC’s order and would do what was necessary to close the deal “without delay.”
“The rights and obligations (under the deal) are fully enforceable under Indian Law,” Future Retail added, per Reuters.
Future Retail also told Indian stock exchanges that it was not “party to the agreement under which Amazon had invoked arbitration proceedings” and that the situation “raises several fundamental jurisdictional issues.”
The injunction might not be enforceable in India unless it is ratified by an Indian court, per sources.
“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,” Amazon said in a statement.
Reliance and Future said on Sunday (Oct. 25) that they are moving forward with the deal despite Amazon’s protests. In a statement, Reliance said it “intends to enforce its rights and complete the transaction in terms of the scheme and agreement with Future group without any delay.”
The deal gives Reliance owner and billionaire Mukesh Ambani heightened domination over retail in the Indian marketplace.
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