What was the gist of the case?

This case pertains to the Rs.24,500 crore deal by which RIL was to acquire the retail operations of Future group. Amazon had objected to the deal as it was in contravention of the agreement that Amazon had signed at the time of taking a stake in Future Coupons. As per the deal, Amazon should be given the right of first refusal before selling, which was not followed by the Future group. That led Amazon to approach the SIAC which asked for the deal to be put on hold till final order is passed by SIAC. 

What happens to the deal now?

Of course, this does raise questions over the RIL-Future deal. From RIL’s point of view, the plan to expand its brick-and-mortar business gets delayed to that extent. Of course, there are still legal options available. The Supreme Court has only passed an order on the subject of validity of the SIAC order. The first step now is for SIAC to go into the merit of the case and pass its final order. If that favors Future group, then the deal can continue. However, if the SIAC rules against Future group, then they can still approach the High Court and then the Supreme Court for a second review. 

Big stakes for Future Group?

For the Future group, the issue is one of immediate liquidity, which the banks are already aware of. If the RIL deal does not go through, then Amazon can make a counter offer and if it does not have any objections, then the RIL deal can go through. From the perspective of Future group, the impact may not be too much, either ways. If the SIAC order goes in their favor, then the deal goes through anyways. If the order is adverse, then the onus is on Amazon to make a good bid after having stalled the deal. It may end up looking as a deal spoiler if it is not able to make a proper counter offer. 

Bigger stakes for Amazon / RIL

Ironically, the stakes are much bigger for Amazon and RIL. For Amazon, this is their best chance to delay Reliance’s retail plans so that it can get a heads–up in the process. For RIL, time is the key and Future group was the perfect fit. Any delay in the deal would mean that Reliance may eventually lose interest in the deal and look for alternatives. In that case, the onus will be on Amazon to offer a valid counter offer. In fact, Future group may not have much to worry about. The onus is on Amazon to show that it has a Plan-B for Future Group in place. For RIL, they have spent the last one year with little progress on the deal. The SIAC order has put the entire onus on Amazon and RIL to find a workable and acceptable solution!