THE FUTURE GROUP AND AMAZON SAGA - Aakash Batra

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 Today we will talk about one of the most intriguing battles fought in the Indian courts in recent years, The Future Group vs Amazon, which in disguise can also be termed as "Battle of Giants" with it ostensibly being a fight between Reliance and Amazon. This battle was supposed to, yes I can talk in past tense, be a deciding factor in deciding if India, a market of over billion people will be dominated by whom? We can safely conclude by looking at the recent judgement by CCI that the answer to that question is Reliance.


Let's start with looking at the timeline of the case. It's August 2019 and Amazon and The Future Group are in talks of buying and selling, respectively, stake in a subsidiary of The Future Group, Future Coupons. The deal goes through for 1500 crores. Amazon buys a 49% stake in Future Coupons. Future group received the money in December and both companies went home happily. 


Come August 2020, the struggling Future Group agrees to sell all of its retail, wholesale, and logistics business by way of a slump sale for Rs 24,713 crore to Reliance Retail a subsidiary of the Reliance Group i.e., Reliance Industries Limited (RIL)

This included sale of its supermarket chain Big Bazaar, clothes supermart Brand Factory and FoodHall. 


Amazon was not able to digest this as the company that they bought a 49% stake in, Future Coupons, held a 7.3% stake in Future Retail Limited (FRL) which gave Amazon a 3.58% ownership of FRL. They tried to sort out this issue with FRL behind doors but it was to no avail. They went ahead and filed a case with Singapore Emergency Arbitrators (EA) based on a non compete clause in their deal with FRL that barred FRL from doing business with some companies, including RIL. The EA ruled in favor of Amazon and stayed the FRL and RIL deal.


Post this ruling, FRL moved Delhi HC alleging interference from Amazon. Meanwhile, Competition Commision of India i.e., CCI gave a nod to RIL-FRL deal. At this moment in time both companies had tasted mini success in their pursuit of getting the result in their favor. But they couldn't have gotten complacent from just this. There was a continuous tug of war going on the Delhi High Court in which initially a single judge bench of Delhi HC ordered to maintain status quo in RIL-FRL deal. Then after being challenged by FRL this ruling was lifted by another bench of 2 judges. Now, Amazon moved SC and challenged the lifting of the single judge order by 2-judge bench.


While this battle was going on in the courts, regulators kept on doing their jobs. SEBI also approved the RIL-FRL deal. In March 2021, came a shocker for FRL when Delhi HC stayed the deal and reprimanded Kishore Biyani, the promoter of FRL and stated that he willfully disobeyed the order of the court. It also directed to attach all the assets of  Kishore Biyani, all promoter and the directors. It also asked FRL to approach all the regulators to recall the grant of deal approval. 


This order was undone by the HC after being  challenged by FRL. During this time SC also agreed to hear Amazon's plee seeking a stay on RIL-FRL deal. The case took a very interesting turn when FRL contested that when they were doing a deal with Amazon, Amazon hid some facts regarding the deal. When this was brought to the notice of CCI, it started looking into the 2019 deal of Amazon and The Future Group. 


Now, in December the case that Amazon had filed aginst the  deal by remains to be heard on January 11in SC. The apex had also ordered SEBI, NCLT and CCI to not pass any decisions regarding this until it hears rhe case. FRL also tried to get the year old order by Singapore's International Arbitration Centre (SIAC) to be stayed but SIAC denied this request.


While this is going on, CCI has ruled in favor of FRL in the other case that pertains to FRL's allegations that Amazon hid facts from FRL during their deal in 2019 and has suspended the same. Not only this, CCI has also fined Amazon 200 crores for the same. This implies the whole basis on which Amazon's case was built seemed to have fallen on its face. Now, it remains to be seen how will Amazon turn the tide in its favor? 


The world was observing this legal fight very carefully for one very important reason, they all wanted to see if India respects the order given by international arbitrators. I can say that India passed this test as not in any order did our courts say that the SIAC's order was not valid. At every juncture the decision of SIAC was upheld by our Apex Court and Delhi HC. This case will also be the deciding factor in deciding if Amazon will dominate India the same way they dominate US or Reliance is going to be India's Amazon.


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