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Sunday, September 25, 2022

Supreme Court Stops Rs 24,000 Cr Big Bazaar-Reliance Deal.

In its dispute with Future Retail Ltd (FRL), the Supreme Court has sided with Amazon.

The Verdict

The SC ruled that the Singapore International Arbitration Centre (SIAC) award preventing the deal from moving forward was valid under Section 17 (1) of the Arbitration and Conciliation Act.

As of October 2020, SIAC barred the deal from moving forward and created a three-member panel to make a final decision.

Reliance Retail’s decision to complete a Rs 24,713 crore deal with FRL is a blow to the company.

Amazon’s Opposition And Accusations

Amazon had objected to the deal and alleged that it violated a contract between FRL and Amazon.

Under a 2019 agreement with Future, FRL prohibited selling them to anyone on a “restricted persons” list, including Reliance.

FRL has violated the Right of First Refusal clause by refusing 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 it hopes to quickly resolve the dispute.

SC’s verdict has more to do with questions of law, such as the legality and enforceability of an award that is academic in nature and less to do with the merits of the dispute.

FRL To File Appeal And Seek Relief

FRL is expected to file a special leave petition before the SC in March this year against a High Court of Delhi judgment.

Midha upheld the decision of the SIAC emergency arbitrator.

The FRL will also appeal against the arbitrator’s interim award to the Delhi High Court under Section 37 (2) of the Arbitration and Conciliation Act.

In doing so, it will seek relief to go ahead with the deal.

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