Ecommerce major Amazon on Tuesday published ads in leading Indian newspapers accusing Future Retail and Reliance of “fraud” following Reliance Industries’ sudden takeover of many of Future’s stores.
In ads headlined “PUBLIC NOTICE” in leading Indian newspapers on Tuesday. Amazon said: “These actions have been done clandestinely by playing a fraud on the constitutional courts in India, the arbitral tribunal and Indian statutory authorities/agency,”
Amazon has challenged the proposed $3.4 billion sales of Future Group’s retail assets to Reliance. They first announced in 2020, and the case is currently before India’s Supreme Court.
Amazon has been contesting the planned $3.4 billion sales of Future Group’s retail assets to Reliance and the case is currently before the Supreme Court. The eCommerce giant has argued that Future violated the terms of a 2019 deal the companies signed when the US e-commerce giant invested USD 200 million in a Future Group unit. Amazon’s position has been backed by a Singapore arbitrator.
The development comes even though both FRL and Amazon have held settlement talks earlier this month over their long-running dispute. This comes even as both FRL and Amazon have held settlement talks earlier this month over their long-running dispute over the RIL deal.
Future’s Words
Future said in the files this month that it was unable to pay rent at many branches given its tight financial situation and that Reliance, which had taken over many of its leases, had given it resignation letters.
According to a source with direct knowledge of the matter, who was not authorized to speak to the media and declined to be identified. Amazon is concerned that Reliance will continue to take over future stores even as talks continue.
The newspaper ads aimed to alert all parties involved, including Future’s lenders, that transferring assets to Reliance is prohibited by law, the source added.
What’s the Matter?
Mukesh Ambani’s Reliance Industries and US giant Amazon have been vying to get the upper hand in one of the world’s fastest-growing retail markets, which is India. This is the reason why, for more than a year, Amazon.com Inc and Future Group have been locked in a complex legal stand-off that has stalled Future’s $3.4 billion sales of assets to rival Reliance Industries.
After trading barbs in courtrooms for months, Amazon and Future unexpectedly agreed on March 3 to hold discussions to resolve their dispute.
That deal, Amazon argues, came with non-compete clauses that prohibited Future from selling retail assets to certain rivals. It includes Reliance, run by one of India’s richest men, Mukesh Ambani. The deal also included clauses for settlement of any disputes under rules laid down by the Singapore International Arbitration Centre.
But in 2020, Future – 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. It includes the Supreme Court since the “seat of arbitration” remains in New Delhi and Indian law governs the proceedings.
In a sudden move on Feb. 25, Reliance, which had not played a public role in the dispute, started executing a de facto takeover of some 500 Future stores that represent the crown jewels of its retail network.
Reliance had assumed many of the leases held by cash-strapped Future and has now moved to take over possession citing missed rental payments.
That spooked Amazon, sources say. On March 3, Amazon cited a takeover of shops and extended an olive branch during a Supreme Court hearing, saying the “whirlpool” of litigation must end. Future agreed to the talks, which are currently ongoing.
