NEW DELHI/MUMBAI (Reuters) – A Singapore arbitration panel has put on hold Future Group’s $3.38 billion asset sale to Reliance Industries <RELI.NS>, an interim win for Amazon.com Inc <AMZN.O> which had alleged the deal between the Indian firms breached some existing agreements.
Amazon received an emergency order to halt the companies from proceeding with the deal until an arbitration tribunal is formed, a source with direct knowledge of the matter told Reuters.
Amazon last year bought a 49% stake in Future Coupons Ltd, which owns a 7.3% stake in Future Retail. In August, Mukesh Ambani’s Reliance decided to buy retail, wholesale and some other businesses of the Future Group in a deal valued at $3.38 billion, including debt.
But Amazon’s investment came with contractual rights that include a right of first refusal and a non-compete-like pact, media had reported, and Amazon later started arbitration proceedings in Singapore.
“It’s a comprehensive victory for Amazon,” a source with direct knowledge of the decision said. “They’ve won an injunction to stop the deal.”
Two sources familiar with the matter said that the temporary injunction was not automatically enforceable in India and that the order would have to be ratified by an Indian court.
In a statement, Amazon said it welcomed the award of the emergency arbitrator.
“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 added.
Future Group and Reliance were not immediately reachable for comment.
(Reporting by Aditya Kalra and Euan Rocha; Writing by Ann Maria Shibu in Bengaluru; Editing by Nick Macfie)
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