Future Group, which is locked in a legal battle with Amazon.com Inc., has asked a Singapore arbitration court to remove Future Retail Ltd (FRL) from the scope of its order that temporarily blocked the Kishore Biyani-led group from selling its assets to billionaire Mukesh Ambani.
In a modification application on 11 March, Future Group has asked the Singapore International Arbitration Centre (SIAC) to review its October interim ruling, two people with direct knowledge of the development said on condition of anonymity.
“Future Group has realized that due to the Singapore court’s order, Future Retail cannot proceed with the deal with Reliance Industries Ltd,” said one of the two people. “The group’s application seeks an interim stay on the emergency arbitration order and removal of Future Retail from the scope of the order till the final outcome is decided.”
The latest plea is an attempt by Future Group to pave the way to complete the ₹24,713 crore asset sale deal with Reliance Industries.
The modification application in the Singapore tribunal follows the Delhi high court upholding the validity of the arbitration court’s order.
Amazon has challenged Future Group’s asset sale to Reliance Industries on the grounds that it violated a contract that Kishore Biyani entered with Amazon for an investment in a group company.
The cash-strapped Future Group is trying to expedite the deal to pay creditors and save the Big Bazaar retail chain from collapse.
Emails sent to spokespeople for Future Group, Amazon and Reliance Industries remained unanswered.
The real battle is, however, between Amazon and Reliance over a bigger slice of the Indian retail market that is estimated to exceed $1.3 trillion by 2025.
Amazon founder Jeff Bezos has made India a key focus of its global plans. Amazon fears that access to assets of Future Retail will give rival Reliance Retail a crucial edge in the battle for dominance of the Indian market.
The Reliance Industries-Future Group deal is still to get court clearance because of Amazon’s lawsuits against Future Group.
Amazon contends that Future Group can’t sell assets to 30 specified entities, including Reliance Industries, without the US company’s consent as per a commercial agreement signed in August 2019.
Future Group, which has been caught in the battle between Bezos and Ambani, has been struggling to repay around $3 billion worth of dues to lenders.
The Reliance Industries-Future Group deal is awaiting clearances from the Supreme Court and the National Company Law Tribunal (NCLT) right now.
The case in the Supreme Court is scheduled to be heard on 19 March.
But even as the legal clearances are awaited, Reliance has extended operational support to Future Retail to prevent a deterioration in asset quality.
Reliance has also extended an internal deadline for the completion of the purchase by six months to accommodate for delays caused by the legal battle. Some of Future Retail’s lease agreements for stores have been transferred to Reliance to ease the burden on the troubled retailer and avoid defaults.
Integration of the workplaces of Reliance Retail and Future Group has also begun, and many Future Group employees have started undergoing training to work under Reliance Retail.
On 22 February, the Supreme Court directed NCLT not to approve the deal till it pronounces its final judgement.