Shares in Future Group firms fall as court dismisses appeal

A Delhi court had dismissed Future Retail’s appeal to declare arbitration proceedings with as illegal.

A woman shops inside the Big Bazaar retail store in Mumbai, India
Amazon is in a race with India's Reliance Industries for some of the assets of the Future Group as the two compete to dominate Indian retail [File: Niharika Kulkarni/Reuters]

Shares in Future Group companies have fallen a day after an Indian court dismissed Future Retail’s appeal to declare arbitration proceedings with now-estranged partner Inc as illegal.

Justice Amit Bansal at the Delhi High Court said on Tuesday that Future’s filings were dismissed. The arbitration proceedings are set to resume this week.

Future Retail on Wednesday appealed again in the Delhi High Court, seeking to declare the proceedings illegal. The case is likely to be heard by a two-judge bench later in the day.

On Wednesday Future Lifestyle Fashions, Future Consumer, Future Retail and Future Enterprises fell as much as between 3.6 percent and 5.8 percent in a marginally strong Mumbai market.

The Delhi court’s decision is the latest legal twist in the Future-Amazon saga. The arbitration case has blocked the sale of some of Future’s physical assets like stores and warehouses to Reliance Industries Ltd. A halt or termination of the arbitration case would be a setback for Amazon, which is in a race with Reliance to dominate India’s billion-plus consumer market.

Amazon had successfully for months used the terms of its $200m investment in Future in 2019 to block the Kishore Biyani-owned company’s attempt to sell retail assets to Reliance, until the antitrust agency’s suspension of the 2019 deal last December on grounds that Amazon suppressed information while seeking regulatory approval for the deal.

Armed with the antitrust ruling against Amazon, Future Retail had petitioned the Delhi High Court and the arbitration tribunal in Singapore saying that continuing arbitration would be illegal. The Singapore tribunal on December 30 refused to consider Future Retail’s request for terminating the arbitration before starting a final hearing later this week, prompting the Indian retailer to move the Delhi court.

Since August 2019, when Amazon announced its investment in Future, shares of Future Retail have slid about 87 percent.

Future Group, Amazon and Reliance did not immediately respond to Reuters requests for comment.

Source: News Agencies