With US retail giant Amazon's win after the Supreme Court verdict that upheld Singapore's Emergency Arbitrator (EA) award against Reliance Industries' acquisition of Kishore Biyani-led Future Retail, questions are galore regarding the future of the deal. A clarity, it seems will emerge only after the final verdict of the Singapore court.
Reportedly, the Singapore International Arbitration Centre (SIAC) has begun hearing the case on July 12. SIAC had issued an emergency award in favour of Amazon staying the sale of Future Group's assets to Reliance in October last year. In January, the SIAC had constituted a three-member panel to pass final verdict, which would typically will take six-nine months.
Hence, SIAC's final verdict will be key to answering the question on the future of the RIL-FRL deal.
The Indian firms had argued in SC that a Singapore’s court order wasn’t valid in the South Asian market. Watchdog Competition Commission of India last year approved the deal between the Indian firms.
While the two companies did not immediately comment on the judgment, a legal expert who did not wish to be named told PTI that Future Retail is expected to file a review plea against the order, and an appeal under section 37 (20) of the Arbitration Act against the EA's interim award before the Delhi High Court to obtain appropriate relief to pursue its deal with Reliance.
The judgment, he said, does not deal with the merits of the dispute between FRL and Amazon. It has dealt with the questions of law which are academic in nature.
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At the same time, given its financial troubles, how long can Future Retail afford to hang on also needs to be seen. Shares of Future Retail Ltd on Friday tumbled almost 10 per cent after the Supreme Court verdict. The stock went into a tailspin and tumbled 9.94 per cent to its lower circuit of Rs 52.55 on the BSE.
Other group stocks also dropped, with shares of Future Consumer diving 16.12 per cent, Future Supply Chain Solutions tumbling 9.99 per cent, Future Enterprises nosediving 9.98 per cent, and Future Lifestyle Fashions 9.94 per cent.
Future Supply Chain Solutions, Future Lifestyle Fashions and Future Enterprises also touched their lower circuit limit.
Shares of Reliance Industries Limited also dipped 2.53 per cent to Rs 2,079.20.
