The Singapore International Arbitration Centre (SIAC) has issued an emergency ruling in favour of Amazon.com, putting on hold conglomerate Reliance Industries’ bid to acquire Indian’s Future Retail.
ALB had earlier reported that Reliance was purchasing Future Retail’s assets for 247.13 billion rupees ($3.38 billion).
Amazon, which has an indirect holding in Future Retail, has alleged that the latter had breached certain contract provisions it entered into with the company. According to Reuters, Amazon argued that a 2019 deal it had with a Future unit had clauses saying the Indian group couldn’t sell its retail assets to anyone on a “restricted persons” list, including companies owned by Mukesh Ambani, such as Reliance. The deal specified any disputes would be arbitrated under Singapore International Arbitration Centre rules.
However, even though Amazon obtained the interim award at the SIAC, enforcement in India might be a challenge. In particular, the fact that the SIAC ruling is just an interim injunction might weaken the chances of an immediate enforcement of the arbitration award, as Indian laws are not very clear in that regard.
Additionally, if there is a non-compete clause in the contract signed between Future and Amazon, it can work against Amazon as a non-compete agreement might be seen as anti-competition, which is a contravention of public policy.
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