Amazon vs Reliance: Arbitration to include Future Retail, rules Singapore Court

Amazon indirectly owns a 5% stake in Future Retail, which runs all the grocery stores of the group --Big Bazaar, HyperCity, Easyday and Nilgiri's. Amazon’s stake is held through a 49% ownership, bought last year for ₹1,500 crore, in Future Coupons.

The Singapore International Arbitration Centre (SIAC) Wednesday rejected Future Group’s contention that Future Retail, in a proposed divestment deal with the Reliance Group’s retailing arm, be excluded from an arbitration triggered after Amazon’s objections to the transaction announced three months ago. Instead, SIAC ruled the arbitration would proceed further for both Future Retail and Future Coupons. Amazon has a 49% stake in the latter.

“Having considered the jurisdictional objection, the parties’ submissions on the same and the circumstances of the case, the court of SIAC has decided...that the arbitration shall proceed,” said the tribunal in its ruling. “Accordingly, SIAC shall now proceed with the constitution of the tribunal in this matter.”

Under Rule 28.1 of the proposed arbitration, if any party objects to the existence or validity of the arbitration agreement, or competence of the SIAC to administer the arbitration before the constitution of the tribunal, the registrar determines if such an objection needs to be settled by a court. Subsequently, the court decides if the arbitration can proceed.


Amazon Indirectly Owns 5% in FRL
Last month, SIAC in its interim order had directed the Future Group to put on hold its proposal to sell the retail business to Reliance until it gave a final judgement on a plea filed by Amazon. Future Retail, however, objected to the direction to put on hold the proposal, and approached the court with the argument that the company was not a party to the dispute between Future Coupons and Amazon. Hence, the direction was not binding on Future Retail, it had argued.

Amazon indirectly owns a 5% stake in Future Retail, which runs all the grocery stores of the group --Big Bazaar, HyperCity, Easyday and Nilgiri's. Amazon’s stake is held through a 49% ownership, bought last year for ₹1,500 crore, in Future Coupons.

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However, in August, Reliance Retail Ventures, a unit of Reliance Industries, agreed to buy the retail assets of the Future Group on a slump sale basis for about ₹25,000 crore.

The US ecommerce major claimed that Future Group breached a contract under which Amazon had acquired an indirect stake in its retail business.

SIAC, a non-profit body, provides an alternative method of dispute resolution in cross-border transactions involving foreign companies, settling cases privately and confidentially outside the public court system.
How the battle between Amazon and Reliance is turning into a foreign vs local debate
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According to a report by Bloomberg, a battle between Amazon.com Inc. and Reliance Industries Ltd. to dominate India’s $1 trillion consumer market is stoking nationalist rhetoric in a courtroom and outside, as the two companies tussle over the future of a distressed local retailer. At the center of the case is Amazon’s efforts to block Reliance’s planned purchase of Future Group’s assets, saying the Indian retailer violated a contract by agreeing to a sale to a rival controlled by billionaire Mukesh Ambani.

According to a report by Bloomberg, a battle between Amazon.com Inc. and Reliance Industries Ltd. to dominate India’s $1 trillion consumer market is stoking nationalist rhetoric in a courtroom and ou..
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The legal spat has not only revealed the intensity of the fight between two of the world’s richest men -- Jeff Bezos and Ambani -- but has also sparked a “foreign versus local” debate. A lawyer for Future, in his argument, painted Amazon as the “Big Brother in America” out to crush a small local company, while a retailer lobby group declared its “support to Indian company Future Group in its fight against Foreign Amazon.”

The legal spat has not only revealed the intensity of the fight between two of the world’s richest men -- Jeff Bezos and Ambani -- but has also sparked a “foreign versus local” debate. A lawyer for F..
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For its part, Amazon wants Indian courts and regulators to enforce a business contract in what it views as a commercial dispute. If Future is allowed to renege on its contract with Amazon, it may signal to global investors that investments in India are risky, the U.S. company alleges. That is an inconvenient image at a time when Prime Minister Narendra Modi needs foreign investment to create jobs and reboot an economy pummeled by the pandemic.

For its part, Amazon wants Indian courts and regulators to enforce a business contract in what it views as a commercial dispute. If Future is allowed to renege on its contract with Amazon, it may sig..
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The stakes are high for both Amazon and Reliance. Securing Future’s assets will give Reliance, already India’s biggest retailer, an unparalleled edge in a market where most of the consumers still prefer shopping in stores. That’s an advantage Amazon is not willing to cede. Nor is Amazon willing to be upstaged by nationalistic arguments after losing ground to home-grown rivals in China. India, with its billion-plus consumers, is effectively the last big growth frontier.

The stakes are high for both Amazon and Reliance. Securing Future’s assets will give Reliance, already India’s biggest retailer, an unparalleled edge in a market where most of the consumers still pre..
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Ambani has been playing the nationalist card as well. The tycoon, who’s been warning against data colonization since 2018, often presents Reliance as a homegrown champion and its telecommunications, retail and digital ventures as nation-building initiatives. This week, Reliance Retail introduced the “Indie” and “Swadesh” -- meaning from one’s own country -- taglines on its e-commerce websites to promote indigenous handicrafts and textiles, dovetailing with Modi’s call to be “Vocal for Local.” In a key May speech, Modi mentioned “self-reliance” at least 17 times during a 33-minute address to the nation.

Ambani has been playing the nationalist card as well. The tycoon, who’s been warning against data colonization since 2018, often presents Reliance as a homegrown champion and its telecommunications, ..
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