The questionable merger of the year in India was between Reliance Industries Limited (RIL)

and Future group which is a wholesale and retail market. Reliance Retail is present in 180
towns and cities of India whereas Future Group Retail stores are present in 400 towns and
cities of India. This deal gives accessibility to 1800 stores of Future Group to RIL.
Generally, a competitor takes time to establish itself in a new place but with this deal, RIL
has knocked down its competition in just one go. This transaction will strengthen Reliance
Retail which is already the largest retailer by the number of stores.
But why is it questionable?
In 2019 Amazon purchased 49% stakes in Future Coupons which is a promoter company of
Future group. After this transaction, Amazon also holds 3% in Future Group. Under this deal
there were a certain number of terms and conditions and one condition was that Future
Group cannot sell its assets to a list of companies. RIL was in that list of companies. This
makes the deal between Future Group and RIL invalid.
Amazon challenged the deal and took it before the Singapore Arbitration Forum. As per the
conditions of Amazon if any dispute arises between Amazon and Future Group it will be
dealt with by the Singapore Arbitration Forum. That’s why the dispute is taken there and
not before an Indian court. In this arbitration proceeding, the judgment came in favor of
Amazon.
But then why this case is still on hold?
In India, there is no expressed mechanism and provisions which enforce International
Arbitration orders here in the territory of India.
Amazon has urged SEBI and CCI not to approve this deal between Future Group and RIL. CCI
has approved the deal. Even the High Court has approved the deal and stated that the
regulatory bodies have the authority to take the final decision. Now the ball is in the court of
SEBI.