AMAZON DISPUTE WITH FUTURE GROUP GOES TO SIAC

AMAZON DISPUTE WITH FUTURE GROUP GOES TO SIAC

Amazon Inc. has approached the Singapore International Arbitration Centre (SIAC), alleging that Future Group violated the contract under which Amazon took a stake in its subsidiary, and is seeking that the Future-Reliance deal be halted.

SIAC offers an alternative dispute resolution process arising from cross-border transactions.

Amazon agreed to purchase 49% of one of Future's unlisted firm Future Coupons last year, with the right to buy into flagship Future Retail Ltd. This right is exercisable between the third and the 10th year after the purchase.

Amazon had also sent a legal notice to the Future Group over its Rs. 24,700-crore asset sale to Reliance Retail Ventures Ltd, terming it to be a breach of an agreement between Amazon and Future inked in 2019. Amazon has also written to the stock exchanges and stock market regulator.

According to an Amazon official, the company has initiated steps to enforce its contractual rights as it approached the SIAC.

According to sources, it has been mentioned in the contract between Amazon and Future Group that any disputes regarding breach of agreement will be taken before the SIAC.

An Amazon official has said that Future Group has not yet responded to the legal notice, and as per terms of the mutually agreed contract, the case has been moved to SIAC. Amazon's main aim is to ensure enforcement of the contractual obligations, which indirectly will affect the RIL-Future deal since the SIAC may now loop in Indian regulators, which would have to approve the deal.

Amazon claims that a clause between Future Group and Amazon clearly stated that Future Group could not sell any asset within 10 years of the deal with Amazon. The right of first refusal (RoFR) was on Biyani's own shares.

It is pertinent to note that with the acquisition of the retail business of Future Group, Reliance Retail has become one of the biggest competitors to Amazon and Walmart Inc.-owned Flipkart in India.