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RIL share falls 2%, Future Retail dives 9% after interim relief to Amazon's arbitration plea

The share price of Kishore Biyani's Future Retail opened with a loss of 3.28% at Rs 75.25 today and later plunged 9.3% to Rs 70.55 on BSE.

twitter-logoBusinessToday.In | October 26, 2020 | Updated 13:37 IST
RIL share falls 2%, Future Retail dives 9% after interim relief to Amazon's arbitration plea
The legal notice issued by Jeff Bezos-led Amazon had stated that Future Group violated the contract by entering into the deal with rival Reliance

Shares of Reliance Industries were trading 2% lower in Monday's trading session after Amazon won an interim order against its partner Future Group, related to the Rs 24,713 crore Future-RIL deal.

Similarly, share price of Kishore Biyani's Future Retail opened with a loss of 3.28% at Rs 75.25 today and later plunged 9.3% to Rs 70.55 on BSE.

American e-commerce giant Amazon.com Inc received an interim relief after Future Group was told by the arbitration panel to not proceed with the deal with Reliance Retail for now and that Future Group cannot sell the business to RIL for Rs 24,713 crore.

The legal notice issued by Jeff Bezos-led Amazon in Singapore International Arbitration Centre (SIAC) had stated that Future Group violated the contract by entering into the deal with rival Reliance.

Reacting to the development, shares of RIL were trading 2.25% lower at Rs 1812.25, its day's low, against the earlier close of Rs 2,112. In the current session, the market cap of the firm stood at Rs 13.07 lakh crore. Reliance Industries stock price trades higher than 100 and 200-day moving averages but lower than 5, 20 and 50-day moving averages. The RIL stock has fallen 5% in one week and 6% in one month.

Meanwhile, Future Retail shares trade higher than 5-day moving averages but lower than 20, 50, 100 and 200-day moving averages. The stock has fallen 14% in one month and 78% since the beginning of the year. Its market cap stood at Rs 4,026 crore, as of today's session.

In a clarification note on the news related to the Singapore order in favour of Amazon in the matter of Future-RIL deal, Future Retail said," Company has received a communication from the Singapore International Arbitration Centre (SIAC), enclosing an interim order of the Emergency Arbitrator in the arbitration proceedings under shareholders' agreement between Amazon, Future Coupons Private Limited and the promoter group. FRL is examining the communication and the order, the press release added later

"FRL has been legally advised that actions taken by the FRL or its board, which are in full compliance of the relevant agreements and eminently in the interest of all stakeholders cannot be held back in arbitration proceedings initiated under an agreement to which FRL is not a party. As per the advice received by FRL, all relevant agreements are governed by Indian Law and provisions of Indian Arbitration Act for all intents and purposes and this matter raises several fundamental jurisdictional issues which go to the root of the matter," Future Retail said in its press release.

Earlier in August 2020, RIL had announced the acquisition of the retail and wholesale business and the logistics and warehousing business from Future Group as going concerns for Rs 24,713 crore.

Last year, Amazon had bought a 49% stake in one of Future's unlisted firms, Future Coupons Ltd, with the right to buy into flagship Future Retail after a period between 3 and 10 years. Future Coupons owns 7.3% stake in Future Retail.

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