With respect to upholding sanctity of contractual obligations, it is prudent that Sebi and other authorities take into consideration the interim order of the Singapore arbitrator when they are reviewing the proposed deal, one of the sources said.
The arbitrator's order has called for an arbitration process to be followed by Future and Amazon, and that the Future-RIL transaction be stayed.
Amazon declined to comment on the matter.
Amazon had agreed to purchase 49 per cent of one of Future's unlisted firms -- Future Coupons Ltd -- last year with the right to buy into flagship Future Retail Ltd after a period of three to ten years. Future Coupons holds 7.3 per cent equity in BSE-listed Future Retail Ltd -- that operates popular supermarket and hypermarket chains such as Big Bazaar -- through convertible warrants.
The e-commerce giant had dragged Future to arbitration at Singapore International Arbitration Centre (SIAC) after the indebted Kishore Biyani group firm signed a pact to sell retail, wholesale, logistics and warehousing units to billionaire Mukesh Ambani's Reliance in August this year.
Amazon's argument is that Future violated the contract by entering into the deal with rival Reliance.
On Sunday, Amazon had won an interim award by the Singapore-based single judge arbitration panel, putting the Future-RIL deal on hold.
The deal would help Reliance almost double its footprint as India's largest retailer.
With the dispute, Amazon is drawing battle lines with Reliance in the race for India's estimated USD 1 trillion retail market, where online shopping is gaining ground. It needs the Indian partner to strengthen its foothold after becoming the authorised online sales channel for Future Retail's stores that sell everything from groceries to cosmetics and apparel.
The tussle between Future and Amazon comes at a time when Reliance has been bolstering its position in the country's retail segment.
Reliance Retail Ventures Ltd (RRVL) -- run by India's richest man Mukesh Ambani -- has been on a fund raising spree and since September, it has raised Rs 37,710 crore crore by selling stake in its retail arm.
RRVL operates India's largest, fastest-growing and most profitable retail business spanning supermarkets, consumer electronics chain stores, cash and carry wholesale business, fast-fashion outlets and online grocery store JioMart.
It operates about 12,000 stores in nearly 7,000 towns, with 640 million footfalls across core categories of grocery, consumer electronics and apparel. Revenues of RRVL stood at Rs 1.63 lakh crore in FY20.
The investments equip Reliance Retail with funds to compete in both offline and online formats. The investments come as the country's retail sector prepares for the upcoming festival season and would help Reliance to launch an assault on rivals such as Walmart-owned Flipkart and Amazon.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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