US retail giant Amazon and India’s Future Group have been locked in a legal battle for more than a year now. The stand-off has halted Future’s ₹ 24,500 crore ($3.4 billion) deal with Reliance Industries.
U.S. retail giant Amazon and India’s Future Group have been locked in a legal battle for more than a year now. The stand-off has halted Future’s ₹ 24,500 crore ($3.4 billion) deal with Reliance Industries. Adding more twists, Amazon has filed fresh legal challenges in its long-running dispute with Future after the antitrust agency Competition Commission of India (CCI) suspended a 2019 deal between the two sides, news agency Reuters reported citing sources. According to the report, Amazon has filed an appeal against the CCI suspension decision at the National Company Law Appellate Tribunal (NCLAT). Separately, the US retail major has also filed a challenge in the Supreme Court against the Delhi High Court decision, which stated that the arbitration proceedings must remain on hold until February 1 in light of the antitrust suspension of the deal.
Here’s Your 10-Point Cheatsheet To This Big Story:
- It all started in 2019 when Amazon and Future had become business partners when the U.S. company invested $200 million in a gift voucher unit — Future Coupons — of the Indian group. That deal, Amazon argues, came with certain non-compete clauses that prohibited Future from selling retail assets to certain rivals, including Reliance. The deal also included clauses for settlement of any disputes under rules laid down by the Singapore International Arbitration Centre.
- But in 2020, Future, which was hit hard by the Covid-19 pandemic, decided to sell assets to Reliance.
- Amazon then approached Singapore arbitrators and successfully stopped the sale. Both parties have also challenged each other with lawsuits in Indian courts.
- The potential Future-Reliance deal “destroys” the latter prospect, the U.S. company has alleged. However, Future denies any wrongdoing, saying Amazon is illegally seeking to exert control on Future’s retail business. Future Retail – the group’s flagship retail arm – says it faces liquidation and its more than 27,000 employees can become jobless if the Reliance deal fails.
- RIL has operations including 1,100 supermarkets, while Future has more than 1,500. The Future deal will boost the retail footprint of Reliance.
- For its part, Amazon has invested $6.5 billion in India.
- The CCI got involved when Future complained to the antitrust agency that Amazon was making incorrect and contradictory submissions about the intent of the 2019 deal.
- In December last year, the CCI suspended its approval of the 2019 deal with Future, saying there was “a deliberate design on the part of Amazon to suppress the actual scope” of the deal and its interest in Future’s retail businesses.
- While Amazon contends the CCI acted beyond its powers, Future maintains the U.S. company no longer has any right to assert its claims as the 2019 deal now lacks regulatory approval.
- The arbitration has since been on hold, but Amazon has appealed the decisions in Indian courts. The courts are yet to hear the matter.