Court rules block future group trust agreement
The Indian Supreme Court on Friday (August 6) upheld the decision of an emergency arbitrator, requested by Amazon, preventing the planned sale of the Future store chain to Reliance Industries.
Future Group, the court ruling notes, is India’s second-largest brick-and-mortar retailer. Reliance Industries is a giant conglomerate in the country.
In its ruling, the Indian Supreme Court noted that the provisions of a 2019 investment agreement involving Amazon and Future Retail Limited included language blocking any sale of assets that Amazon did not approve of.
The ruling states: “It appears that the basic agreement between the parties was that Amazon’s investment in the retail assets of (Future Retail Limited) would continue to be vested in (Future Retail Limited), in as a consequence of which (Future Retail Limited) might not transfer its retail assets without the consent (of a company partially owned by Amazon), which, in turn, could only be granted if Amazon had given its consent . “
The decision follows a long legal battle that has largely focused on the authority of emergency arbitrators.
The owners of Future Group approved the sale of the retail stores to Alliance in August 2020. In October 2020, Amazon applied for and was granted the emergency injunction, temporarily blocking the sale.
Some parties involved in the planned sale refused to adhere to the emergency order and continued to pursue the agreement. Amazon requested further intervention in court and won another temporary order blocking the deal in February.
Read more: Delhi High Court suspends Future’s $ 3.4 billion deal over Amazon objections
Friday’s decision not only asserted Amazon’s right to block the sale of Future Group, but also asserted the power of emergency arbitrators to make temporarily binding decisions in disputes involving companies.
“In many ways, the ruling provides assurance that Indian courts will step in and respect the arbitration process,” arbitrator Promod Nair told the Financial Times. “The fact that a foreign investor was successful in legal proceedings against Reliance, essentially India’s largest industrial conglomerate, is a wonderful testament to the neutrality of the Indian justice system.”