ETtech Explainer: Inside Amazon's victory against Future Group in Reliance deal
The Singapore International Arbitration Centre (SIAC) ruled in favour of Amazon on Thursday, confirming that Future Group violated the contract by making a deal to sell its retail business to Reliance in 2020.ET takes a close look at the long-standing legal battle between Kishore Biyani-led Future Group and Amazon that was awarded only Rs 23.7 crore in damages after the Thursday ruling, which is far less than the Rs 1,436 crore it claimed.
What's the case all about?
Back in 2020, Future Group, which owns major retail players like Big Bazaar, Food Bazaar, and Easyday, agreed to sell assets worth $3.4 billion to Amazon rival Reliance Industries as the business was hit hard during the pandemic. However, ecommerce giant Amazon had previously invested $200 million in Future Group and had a contractual right to block such a sale.
Amazon acquired a 49% stake in Future Coupons, a promoter of Future Group that holds a 9.82% stake in the group's retail arm, Future Retail. The deal implied Amazon indirectly having a 4.81% stake in Future Retail Ltd (FRL).
In October 2020, Amazon approached SIAC and obtained a stay on the Future-Reliance deal from the emergency arbitrator. The order was followed by a slew of petitions and counter-petitions between Amazon and Future Group in the Delhi High Court and in the Supreme Court. SIAC is an arbitration centre based in Singapore that handles international disputes, including those involving Indian companies. Emergency arbitration ruling is a temporary relief mechanism to hear urgent matters before the main arbitration panel is even set up.
The legal battle begins
Amazon objected to the Future Group and Reliance deal on the grounds that its investment in FCPL made it mandatory for FRL to take its consent before parting with any of its assets. Amazon has said that in its agreement with Future, Reliance Retail was specifically named as one of the entities to whom the Indian retailer could not sell its assets.
Future Retail further alleged that Amazon interfered with the Rs 23,000 crore deal with Reliance Industries and misused SIAC's interim verdict.
The Competition Commission of India (CCI) in December 2021 suspended its approval of Amazon's 2019 deal with Future, denting the US ecommerce giant's attempts to block the sale of Future's retail assets to Reliance Industries. Future Group accused Amazon of violating Indian foreign investment laws and the Foreign Exchange Management Act (FEMA) by misrepresenting facts. CCI later made a statement that Amazon suppressed information while seeking clearances for the deal.
ET had reported in November 2021 that Amazon had asked Future Group to withdraw its applications with the CCI. Amazon later filed an appeal against the CCI suspension decision at the National Company Law Appellate Tribunal (NCLAT). Next year in February, Reliance, which had not played a public role in the dispute, suddenly took control of hundreds of Future stores, citing non-payment of rent that was due.
However, Future denies any wrongdoing, saying Amazon was illegally seeking to exert control over Future's retail business and said it would face liquidation if the Reliance deal fell through.
What's at stake? Amazon has invested $6.5 billion in India. The Future partnership had helped Amazon to boost its online portfolio of grocery deliveries by integrating the Indian company's stores on its website. The recent ruling by the SIAC in favour of Amazon has hit Reliance's growth plans in India's retail market.
In a confidential legal filing, Amazon said that Reliance's consolidated position with Future "will further restrict competition in the Indian retail market."
What lies ahead?
Amazon India's legal head, Rakesh Bakshi, had asked Future Group for generous compensation in return for withdrawing its objections to the Reliance deal. In a final award issued late Thursday night, the three-member tribunal said that the Future-Reliance deal is a breach of the Shareholders' Agreement (SHA) and Share Subscription Agreement (SSA) signed between Amazon and Future Coupons Pvt Ltd (FCPL) in 2019.However, the tribunal found that even if all contractual agreements had been fully performed, Amazon would not have recovered its entire investment due to the declining financial condition of FRL.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
28 minutes ago
- Time of India
2,536 new buses to be inducted into RTC fleet for women's free travel scheme in Andhra Pradesh
Vijayawada: As many as 2,536 additional buses would be inducted into the existing fleet of Andhra Pradesh State Road Transport Corporation (APSRTC) to implement the free bus travel scheme for women. Officials of the state-run corporation submitted the estimates on the scheme to chief minister N Chandrababu Naidu on Saturday. APSRTC has not included new buses in its fleet for a long time, and there will be an additional requirement of buses as the passenger rush is likely to increase once the scheme is implemented. Officials estimate that an amount of Rs 996 crore is required to induct new buses. They also explained the need to improve other facilities like drinking water, sanitation, bus information systems, and other amenities at bus stations. In a review meeting on the free bus scheme with the CM, officials said they estimate the number of journeys by women is likely to increase by about 78% after the scheme is rolled out. The total number of trips by women is likely to increase from 49.91 crore to 88.90 crore trips annually. Naidu suggested officials to go for new buses or take buses on rental basis if required. He said all new buses to be inducted into APSRTC fleet henceforth should be electric-AC buses. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Perdagangkan CFD Emas dengan Broker Tepercaya IC Markets Mendaftar Undo He also suggested exploring the possibility of converting existing diesel buses into electric ones. He also wanted GPS installation in every bus to be made mandatory, while stressing on the cleanliness of bus stations and buses. The chief minister made it clear that the scheme will be rolled out from Aug 15 despite financial difficulties. "In view of the challenges being faced by the state, public money should be utilised efficiently," he said, and suggested looking for additional revenue sources focusing on cost reduction. Even in the procurement of new buses, he asked officials to explore all options to ease the financial burden on the govt. He suggested officials to study the best implementation models, explore options to generate own power for EV buses, hand over maintenance to private players, and explore battery swapping options.
Time of India
38 minutes ago
- Time of India
Twin tower boost for Kochi's IT infra
Kochi: Giving a major boost to IT infrastructure in the state, chief minister Pinarayi Vijayan inaugurated LuLu IT Twin Towers on SmartCity campus in Kochi on Saturday. The state-of-the-art complex, developed with an investment of Rs 1,500cr, was unveiled in the presence of ministers, industry leaders and eminent personalities from various walks of life. Located within SmartCity Kochi special economic zone (SEZ), the project is expected to bring leading global companies to SmartCity campus and generate around 30,000 employment opportunities. While inaugurating the project, Vijayan said the state is transitioning into a digitally driven economy and infrastructure projects like LuLu IT Twin Towers are vital in attracting global tech investments and generating employment for our youth. "If we truly seek development, everyone, including govt, private sector and various political and social organizations, must come together in unity," he said. The CM informed that LuLu group will launch another IT tower project with an investment of Rs 500cr on Infopark Phase II campus in Kochi. Inaugural ceremony was attended by opposition leader V D Satheesan, ministers P Rajeeve and G R Anil, deputy leader of opposition P K Kunhalikutty, BJP state president Rajeev Chandrasekhar, Hibi Eden, MP, Uma Thomas, MLA, and LuLu Group chairman and managing director M A Yusuffali, among others. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Livguard Lithium-X: The Future of Power Backup Livguard Buy Now Undo Satheesan said, "LuLu IT Twin Towers stand as an architectural and technological marvel that reflects Kerala's growing potential in global IT landscape." "This world-class IT infrastructure will act as a catalyst for Kerala's digital economy and support return of skilled professionals to the state," added Chandrasekhar. "The project will drive reverse migration by creating high-quality job opportunities for our youth within Kerala," said Yusuffali. A host of employee-friendly amenities are integrated into the three-storey amenity block, which also features a conference hall designed for business meetings, forums and tech events. Landscaped podium, gardens and open-air seating areas are other attractions. Currently, LuLu operates Cyber Tower 1 and Cyber Tower 2 on Infopark campus, which house leading global companies and provide employment to over 15,000 professionals.
Indian Express
an hour ago
- Indian Express
Union minister Vaishnaw flags off Purulia–Bankura–Howrah MEMU train: ‘101 stations being upgraded'
Union Railway Minister Ashwini Vaishnaw on Saturday virtually inaugurated the first Purulia–Bankura–Howrah MEMU train via Masagram, highlighting the Centre's drive to expand and modernise rail networks. He noted that currently the rail investment in West Bengal has risen from around rupees 4,380 crore in 2009–14 to about rupees 14,000 crore. The new service revives the historic Bankura–Damodar link, covering 283 km at a fare of just Rs 60—cheaper than the Rs 65 Kharagpur route. It will serve daily commuters, students, and traders by offering cleaner, faster travel between Purulia, Bankura, Masagram, and Howrah. Masagram now links the South Eastern Railway's Bankura–Masagram line with the Eastern Railway's Howrah–Bardhaman chord, promising improved access, tourism growth, and economic development across Purulia, Bankura, Hooghly, and Howrah districts. Vaishnaw also inspected redevelopment work at Santragachi Station under the Amrit Bharat Station Scheme, which aims to transform ageing stations into modern transit hubs with enhanced passenger amenities. 'In West Bengal alone, 101 stations are being upgraded at an extraordinary pace,' he said. 'This isn't just development—it's a new era for Indian Railways, replacing 50–60-year-old facilities with modern infrastructure that meets today's expectations for quality and experience.'
