On Thursday, shares of Future Retail slipped 4.97% to Rs 86.95 after the Court of Singapore International Arbitration Centre (SIAC) turned down a plea by the company to be excluded from being a party to the Amazon-Future Coupons' arbitration proceedings.
In October, a single-judge bench of V K Rajah had given an interim arbitration award, barring Future Retail from taking any step to dispose of or encumber its assets or issuing any securities to secure any funding from a restricted party.
According to PTI, Future Retail had approached the Court of SIAC saying the arbitration proceedings were part of a contract which the company is not a party. After this news report, the stock hit a lower circuit at the stock exchanges.
Amid a severe cash crunch, Future Group had struck a deal with Reliance Industries Limited (RIL) in August, wherein RIL's subsidiary Reliance Retail Ventures Limited is to acquire the retail, wholesale and logistics businesses of the Future Group for Rs 24,713 crore.
However, the US-based e-commerce giant dragged Future Group to arbitration at SIAC claiming that the latter had breached its contract with the former by finalising a deal without its approval. Amazon bought 49 percent in one of Kishore Biyani-led Group's unlisted firms- Future Coupons Ltd (FCL) - in 2019 with the right to buy into the listed flagship FRL after a few years if the government were to undo its bar on foreign ownership of multi-brand retailers.
As per their contract, Future Group was restricted to sell off or transfer its assets to the third party without their consent.