Overview.
Amazon is an online technology company with headquarters in the United States that focuses on artificial intelligence, cloud computing, and digital streaming. It has been called “one of the most significant economic and cultural forces in the globe”.
Future Retail runs some of the most well-known retail chains in India. These stores inspire trust by providing consumers with cutting-edge services, high-quality goods at competitive prices, and helpful advice.
There are 1,800 retail locations operated by Future Retail in more than 400 Indian cities and villages. Similar to how a combination with Future Retail would have helped Reliance solidify its position as the top retailer in India with a presence in smaller cities and towns and assisted the Mukesh Ambani-led business in gaining last-mile connectivity for its eCommerce deliveries to rural areas.
Why Did the Dispute Begin?
Future Coupon Private Ltd (FCPL) and Future Retail Limited (FRL) signed a shareholder agreement in August 2019. A Share Subscription Agreement and Shareholders Agreement between FCPL and Amazon.com NV Investment Holdings LLC (Amazon) was signed later that month, giving Amazon a 49 percent ownership position in FCPL. FRL was on the verge of going out of business as a result of lockdowns in the first wave of COVID-19. FRL chose to sell its retail businesses and assets to Reliance for a huge 25,000 crores in August 2020 despite having a debt of a whopping 22,000 crore. The sale of FRL’s assets to Reliance was unlawfully interfered with by Amazon, according to a complaint that FRL filed with the Delhi High Court (HC).
The National Company Law Tribunal (NCLT), the Securities and Exchange Board of India, and the Competition Commission of India all had to approve the sale of FRL to Reliance. Amazon requested that the SIAC Emergency Award be put into effect, and the Delhi HC agreed. On December 17, 2021, the CCI annulled the first Shareholder Agreement between Amazon and FCPL amidst this tumult of several objections, hearings, and forums. The CCI fined Amazon 202 crore after finding that Amazon had concealed a complex web of agreements that essentially gave it control of FRL.
In the meantime, the SC was hearing pleas against several Delhi High Court orders. It asked the Delhi High Court to post the multiple petitions filed in the matter before the same Delhi HC Bench to start a new round of adjudication. According to the joint brief presented by Amazon and Future Group, the SC issued an order on April 6, 2022, permitting SIAC arbitration to continue. They instructed SIAC to first hear Future Retail’s request to end the arbitration on the basis that Amazon’s license to invest in Future Coupon had been cancelled by the Competition Commission of India.
References:
https://www.moneycontrol.com/news/business/startup/what-is-the-amazon-vs-future-battle-all-about-heres-a-timeline-8016951.html