Home / Companies / News /  Setback for Future Group as Delhi HC halts RIL deal

The Delhi high court halted Future Group’s sale of its assets to Reliance Industries Ltd (RIL), handing a tentative win to Amazon.com Inc., which is locked in a bruising battle for dominance with billionaire Mukesh Ambani, in India’s lucrative retail market.

On Tuesday, the court ordered Kishore Biyani’s Future Retail Ltd to maintain status quo on the assets until “the pronouncement of the reserved order".

The court said it was prima facie of the view that a Singapore tribunal order, which asked the company owned by Biyani not to proceed with the deal, was enforceable in India.

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In its petition, Amazon alleged that the 24,713 crore deal with Reliance Industries violates its investment agreement with Future Group that barred the company from selling its assets to Mukesh Ambani’s conglomerate among other specified entities.

The court’s observation that the Singapore tribunal order is enforceable in India is a significant victory for the American e-commerce giant, controlled by billionaire Jeff Bezos. Amazon had approached the Delhi court on 25 January with a plea seeking detention of Future Group founders, including its promoter Kishore Biyani, and seizure of their assets for violating the tribunal order.

The tribunal passed an interim order favouring Amazon in October, barring Future Retail from taking any steps to sell or encumber its assets.

“The respondents (Future Retail) are directed to file an affidavit to place on record the actions taken by them after October and the present status of all those actions, within days. All the concerned authorities are directed to maintain status quo with respect to matters of violation of the order dated 25 October and shall file the status report with respect to the present status within 10 days (of) the receipt of this order," ruled justice J.R. Midha. The judge said a detailed order specifying the reasons will follow soon.

Biyani’s Future Group, which needs to complete the deal without delay to prevent a possible bankruptcy, has been caught in the fight between two of the world’s wealthiest men. At stake is control of India’s retail market, estimated to reach $1.3 trillion by 2025, amid a surge in online shopping.

Amazon and Walmart-owned Flipkart together control over 80% of the Indian e-commerce market and have been competing to make inroads into the traditional retail market in India.

In a statement, Amazon said: “We have utmost respect for the Indian legal system and appreciate the interim order of the hon’ble Delhi high court to uphold the enforceability of the emergency arbitrator’s order and maintain status quo."

While a Reliance Industries spokesperson declined to comment, Future Group said, “the company is legally advised that the basis of the interim award of the emergency arbitrator has been superseded by the judgement dated 21 December, passed by the learned single judge, Justice Mukta Gupta. The company will explore all legal remedies and take appropriate steps to pursue the scheme of arrangement".

On 21 December, a single-judge bench of the Delhi high court allowed the deal to go through, subject to regulatory approvals. The order upheld the Singapore ruling and declined Future’s plea to stop Amazon from approaching regulators to bar the Reliance-Future deal.

The Competition Commission of India had approved the deal in November, and the Securities Exchange Board of India gave its conditional nod last month. Future Retail has already approached the National Company Law Tribunal, Mumbai, for approval of the deal.


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