It's been over a year since Amazon and India's Future Group have been locked in a complex legal stand-off which has stalled Future Group's $3.4 billion sale of assets to Reliance Industries.
After battling it out in courtrooms for several months, Amazon and Future agreed on March 3rd 2022, to hold discussions to resolve their dispute, which was rather an unexpected turn of events.
But what exactly has been the dispute? The fierce battle has been to gain supremacy in one of the world¡¯s fastest-growing retail markets, i.e. India.
Let¡¯s have a look at what the Amazon-Future Group dispute has been about.
Also Read:?Future Retail Shuts Down Big Bazaar As Reliance Plans Takeover
In 2019, Amazon and Future had become business partners when the former invested $200 million in a unit of Future group.
As per Amazon¡¯s argument, that deal came with non-compete clauses that prohibited Future from selling retail assets to certain rivals, including Reliance, which is run by one of India's richest men, Mukesh Ambani. Moreover, the deal also included clauses for settlement of any disputes under rules laid down by the Singapore International Arbitration Centre, as per a report by ET.
But in 2020, Future Group, which was hit hard by the pandemic, decided to sell assets to Reliance.
Then, Amazon approached Singapore arbitrators and successfully stopped the sale.?
Amazon has argued that various agreements signed in the 2019 deal with Future gave Amazon the special rights over Future's retail assets, some of which it had also hoped to ultimately own if India's rules for foreign investors got eased. So, the potential Future-Reliance deal "destroys" the latter prospect, Amazon had said, as per ET.
But Future Group denies any wrongdoing, saying Amazon is illegally seeking to exert control on Future's retail business. On the other hand, Future group's flagship retail arm Future Retail says it faces liquidation and its more than 27,000 employees can become jobless if the Reliance deal fails to go through.
Last year, Future had complained to India's antitrust agency that Amazon was making incorrect and contradictory submissions about the intent of the 2019 deal.
Amazon said it never concealed any information, but in December 2021 the agency suspended Amazon¡¯s 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.
Later, in a setback for Amazon, an Indian court in January 2022 halted the Singapore arbitration proceedings between the two sides in light of the antitrust decision.
In a sudden move on February 25, 2022, Reliance, which had not played a public role in the dispute yet, began executing a ¡®de facto¡¯ takeover of some 500 Future stores.
Reliance had assumed many of the leases held by cash-strapped Future and has now moved to take over possession citing missed rental payments, as per ET.
Then, last week on March 3, 2022, Amazon said this "whirlpool" of litigation must end. Future Group agreed to hold the talks, which are currently ongoing.
Also Read:?Reliance Places $1B Order For 5G Robots With Startup Addverb
For the?latest financial content,?keep reading Worth.?Click here.