Supreme Court Stops Rs 24,000 Cr Big Bazaar-Reliance Deal: How This Happened? What Next?
The Supreme Court has taken Amazon’s side in its dispute with Future Retail Ltd (FRL).
The SC said that the Singapore International Arbitration Centre’s (SIAC) award preventing the deal from going ahead held good under Section 17 (1) of the Arbitration and Conciliation Act.
The SIAC had barred the deal from proceeding in October 2020 and created a three-member panel to pass the final verdict which is yet pending.
This is a blow to FRL which was to complete a Rs 24,713 crore deal with Reliance Retail.
Amazon’s Opposition And Accusations
Amazon had objected to the deal and alleged that it was in violation of a contract between FRL and Amazon.
A 2019 deal with a unit of Future contained clauses prohibiting FRL from selling them to anyone on a “restricted persons” list including Reliance.
The Right of First Refusal clause that was violated was that FRL will not be permitted to sell assets to 30 entities including Reliance Industries without Amazon’s approval.
Amazon welcomed the verdict upholding the emergency arbitrator’s award and said that it hopes to quickly reach a resolution in the dispute.
SC’s verdict has more to do with questions of law such as the legality and enforceability of an award which is academic in nature, and less to do with merits of the dispute.
FRL To File Appeal And Seek Relief
FRL will likely file a special leave petition before the SC against an order of Delhi High Court justice JR Midha in March this year.
Midha’s order upheld the SIAC emergency arbitrator’s decision.
FRL will also appeal under Section 37 (2) of the Arbitration and Conciliation Act against the arbitrator’s interim award before the Delhi High Court.
In doing so, it will seek relief to go ahead with the deal.