Reliance says its $3.4 billion deal with Future Group ‘fully enforceable under Indian law’ despite Amazon winning an arbitration order

Reliance Retail, India’s largest retail chain, said on Sunday evening that its proposed deal to acquire Future Group’s assets for $3.4 billion — against which Amazon has filed a legal proceeding — is fully enforceable under the Indian law and it intends to complete the deal “without any delay.”

Mukesh Ambani’s firm issued the statement after Amazon won an emergency order from a Singapore arbitration panel to temporarily halt the proposed sale between the two Indian retail giants.

The American e-commerce group, which indirectly bought a 3.58% stake in Future Group’s Future Retail business last year, reached out to a Singapore arbitration panel earlier this month over the multi-billion dollar proposed deal.

Amazon’s deal with Future Retail had given the American e-commerce giant the first right to refusal on purchase of more stakes in Future Retail, the Indian firm had said at the time. Amazon, Walmart’s Flipkart, and Reliance Industries, the most valuable firm in India, are locked in an intense battle to shape how hundreds of millions of Indians would shop in the future.

In a statement, an Amazon spokesperson said the company was “grateful for the order which grants all the reliefs that were sought. We remain committed to an expeditious conclusion of the arbitration process.” The tribunal hearings are expected to commence in a few weeks.

At the moment, it is unclear whether today’s injunction is enforceable in India. Indeed, in a statement, a Reliance Industry spokesperson said that Reliance Retail’s transaction for acquisition of assets and business of Future Retail were conducted under “proper legal advice” and the “rights and obligations are fully enforceable under Indian law.”

Reliance Retail “intends to enforce its rights and complete the transaction in terms of the scheme and agreement with Future group without any delay,” the spokesperson added.

The legal proceeding in Singapore has come as a surprise to many in the industry, as Amazon is said to be preparing to acquire a multi-billion-dollar stake in Reliance Retail, according to earlier reports by ET Now and Bloomberg.

With e-commerce commanding only between 3 -7% of all retail sales in India — and Reliance Retail launching its own e-commerce business to fight Amazon and Flipkart — Amazon’s reported future deal with Reliance Retail is already been seen by many industry analysts as crucial for the American e-commerce firm’s future in India. Amazon, which kickstarted its journey in India seven years ago, has invested more than $6.5 billion in its local business in the country.

Founded in 2006, Reliance Retail serves more than 3.5 million customers each week (as of early this year) through its nearly 12,000 physical stores in more than 6,500 cities and towns in the country.

The retail chain, run by India’s richest man, Mukesh Ambani, has raised about $5.14 billion by selling about an 8.5% stake in its business to Silver Lake, Singapore’s GIC, General Atlantic and others in the past two months.

Ambani’s other venture, Jio Platforms, this year raised over $20 billion from more than a dozen marquee investors, including Google and Facebook.

In the meantime, Walmart’s Flipkart on Thursday acquired a 7.8% stake in Aditya Birla Fashion, a fashion retail conglomerate that operates over 3,000 stores in India, for $203.8 million. Flipkart dominates in the online sales of apparels in India, thanks in part to Myntra, a fashion e-tailer it bought it in 2014. Over the years, the Walmart-owned firm has made several more investments in strengthening its fashion category. In July, it invested $35 million in Arvind Fashions, part of a decades-old Indian retail giant.