Shares of Reliance Industries fell as much as 2.54 per cent to hit an intraday low of Rs 2,079 on the BSE after the Supreme Court on Friday said Reliance Retail cannot go ahead with its $3.4 billion deal to buy Future Groups retail assets. In a big win for Amazon, the Supreme Court today said Reliance cannot go ahead with its $3.4 billion deal to buy Future Groups retail assets. The court backed an arbitrators decision to pause the deal in the Jeff Bezos versus Mukesh Ambani legal fight.
Amazon had taken its partner Future Group to court saying it violated contracts by agreeing to sell retail assets to market leader Reliance Industries last year for Rs 24,731 crore.
Amazon and Future have been locked in legal battles over the Future Group deal, with the US firm accusing the Future Group of violating pre-existing contracts when it sold its assets to Reliance. Future has denied any wrongdoing.
A two-judge bench of the Supreme Court said that an interim decision by a Singapore arbitrator in October – that put the deal on hold after finding merit in Amazon’s objections – was valid and enforceable in India.
Amazon had argued that the order is binding, while Future had argued it was not. Both sides had agreed to use the Singapore arbitrator in case of disputes when Amazon invested $200 million in a unit of Future in 2019. The arbitration proceedings are still ongoing.
Future Retail shares were locked in 10 per cent lower circuit at Rs 52.55 after the court’s ruling.
Future, India’s second-largest retailer with over 1,700 stores, has said it will be pushed towards liquidation if the deal with Reliance falls through.
As of 12:58 pm, Reliance Industries shares were down 1.98 per cent at Rs 2,091, underperforming the Sensex which was down 0.28 per cent.