Shares of Mukesh Ambani-led Reliance Industries fell as much as 2.43 per cent to hit an intraday low of Rs 1,892.55 on the BSE after Amazon.com on Monday requested a court to block partner Future Group’s $3.4 billion deal to sell its retail assets to Reliance Industries, in its latest attempt to derail the deal, a court filing seen by Reuters showed. Amazon has asked the Delhi High Court to enforce the decision of a Singapore arbitrator, which both sides had agreed to use in case of disputes, the filing showed.
In October, the arbitrator issued an interim order saying the deal should be put on hold. Amazon argues Future breached some pre-existing clauses by entering into a deal with Reliance, but the Indian group has maintained the arbitrator’s order is not binding and needs to be ratified by an Indian court. Future has “deliberately” disobeyed the arbitrator’s order, Amazon argued in its court filing, which is likely to be heard by the court in New Delhi later this week.
The US group’s latest court move comes after Indian stock exchanges last week gave the go ahead to the Future deal, after communicating with India’s markets regulator, the Securities and Exchange Board of India (SEBI).The Amazon filing also argued that Future should not rely on any regulatory approval it has received, in light of the arbitrator’s injunction. Future and Reliance did not immediately respond to requests for comment, while Amazon declined to comment.
Any violation of the arbitrator order invites the “same consequences” as a violation of an Indian court order would, Amazon argued, urging the court to also detain Future Group CEO Kishore Biyani, and some other respondents in the case, in a civil prison. Future, in a statement to India’s BSE and NSE stock exchanges, said it had been informed by Amazon lawyers about the court filing, and that it would defend the case. Future and a spokesman for Biyani, as well as Reliance, did not respond to Reuters’ requests for comment.
As of 2:19 pm, Reliance Industries shares were trading 1.81 per cent lower at Rs 1,902 in-line with the Sensex which was down 2 per cent. Reliance Industries was the top drag on the Sensex, it alone wiped out 100 points from the Sensex, data from BSE showed.