Reliance and Amazon are both aggressively expanding their online and offline retail offerings in India in a bid to capture the country’s rapidly growing retail market. But Reliance’s attempt to acquire the debt-ridden Future Retail to do this has been legally challenged by e-commerce giant Amazon. Here’s everything you need to know about the battle between these companies which have been going back and forth since October 2020.
Origins of the issue
Amazon acquires stake in Future Coupons (November 2019): Amazon received approval to acquire a 49 percent equity in Future Coupons, the promoter entity of Future Retail, which operates 900 stores in India, including 293 Big Bazaar stores. Since Future Coupons owned a 7.3 percent stake in Future Retail, the deal gave Amazon a 3.58 percent stake in Future Retail.
Reliance announces it will acquire Future Retail (August 2020) – Reliance Industries announced it will buy most of Future Group’s retail, wholesale, and logistics business in a deal worth Rs 24,713 crore, offering Future a lifeline in the face of mounting debts, potentially saving thousands of jobs.
Amazon accuses Future of breach of contract and obtains injunction order from Singapore (October 2020) – Amazon accused Future Group of breach of contract and slapped it with a legal notice over the Future-Reliance deal. Amazon reportedly had a non-compete-like pact and right of first refusal against deals with competitors like Reliance Retail. On October 25, Amazon obtained an injunction order against the Future-Reliance deal from an emergency arbitrator appointed by the Singapore International Arbitration Center (SIAC).
Future goes to Delhi High Court
Future moves Delhi High Court (November 7, 2020) – Future Group moves Delhi High Court against Amazon interfering in the acquisition arguing that Amazon’s agreements were with the various promoters of Future Retail and not Future Retail itself and that the Singapore emergency arbitrator’s order is invalid.
Delhi HC upholds the Singapore emergency arbitrator’s order obtained by Amazon (March 18, 2021) – A single judge from Delhi High Court upheld the emergency arbitration order obtained in Singapore against Future Group by Amazon, refusing to allow the Future-Reliance deal to go ahead. The high court also attached the properties of Future Group and its promoters Kishore and Rakesh Biyani and ruled that the company must deposit Rs 20 lakh into the PM-CARES fund.
Delhi HC order is stayed by a division bench of the court (March 22, 2021) – A division bench of the Delhi High Court stayed the March 18 order allowing the deal to go ahead. Amazon appeals to the Supreme Court against this stay order.
Amazon goes to Supreme Court
Supreme Court rules in favor of Amazon (August 6, 2021) – The Supreme Court ruled in favor of Amazon by accepting its appeal against the Delhi HC order dated March 22. The court held that the emergency arbitrator’s award obtained by Amazon in Singapore can be legally enforced in India.
Future files fresh legal challenge in Supreme Court (August 28, 2021) – Future Group files a fresh legal challenge in Supreme Court against Amazon.
SC stays all proceedings related to the case for four weeks (September 9, 2021) – The Supreme Court stayed all Delhi HC proceedings in the Amazon vs Future case including the March 18 order, and asked SEBI, CCI, and NCLT to not pass any final orders regarding the Reliance–Future deal for four weeks while the Singapore arbitration court rules on the matter.
What’s next for Future and Amazon?
Order by Singapore arbitrator awaited: Based on the hearings held between July 12-17, 2021, the Singapore International Arbitration Centre is expected to rule on whether Future Retail is a party to the agreements signed by Amazon and Future Coupons by the end of October. If Amazon wins on this front, the SIAC will then start hearing the case on whether Amazon can refuse the acquisition deal from going ahead.
Future, Amazon likely to start negations for out-of-court settlement: According to sources cited by the Economic Times, Future Group and Amazon are likely to start negotiating an out-of-the-court settlement once the Singapore arbitrator gives its initial ruling because waiting for a final verdict from the arbitrator could take years.
A complete timeline of events
November 2019: Amazon received approval from the Competition Commission of India (CCI) to acquire a 49 percent equity in Future Coupons, the promoter entity of Future Retail, which operates 900 stores in India, including 293 Big Bazaar stores. Since Future Coupons owned a 7.3 percent stake in Future Retail, the deal gave Amazon a 3.58 percent stake in Future Retail.
August 2020 – Reliance Industries announced it will buy most of Future Group’s retail, wholesale, and logistics business in a deal worth Rs 24,713 crore.
October 7, 2020 – Amazon accused Future Group of breach of contract and slapped it with a legal notice over the Future-Reliance deal. Amazon reportedly had a non-compete-like pact and right of first refusal against deals with competitors like Reliance Retail.
October 25, 2020 – Amazon obtained an injunction order against the Future-Reliance deal from an emergency arbitrator appointed by the Singapore International Arbitration Center (SIAC).
November 2, 2020 – Future Group urged stock exchanges to ignore Amazon’s objections to the Reliance deal saying that the emergency stay on the transaction obtained by Amazon from the Singapore arbitration court had no legal force in India. Amazon later accused Future Group of misleading shareholders and insider trading.
November 7, 2020 – Future Group moves Delhi High Court against Amazon interfering in the acquisition by Reliance arguing that Amazon’s agreements were with the various promoters of Future Retail and not Future Retail itself.
November 20, 2020 – Despite Amazon’s protest, the Competition Commission of India approved Reliance Retail’s ₹24,713 crore acquisition of Future Group’s retail, wholesale, logistics, and warehousing businesses.
December 21, 2020 – The Delhi High Court said that while it wouldn’t stop the Future-Reliance deal from happening, the court wouldn’t interfere with regulators making their own assessment of the legality of the deal.
January 20, 2021 – The Securities and Exchange Board of India (SEBI) gave its conditional approval for the Future-Reliance deal.
March 18, 2021 – A single judge from Delhi High Court upheld the emergency arbitration order obtained in Singapore against Future Group, putting on hold the Future-Reliance deal. The judge upheld that the purchase violated an agreement that was signed between Amazon and Future Coupons, an investor company in Future Retail Limited. The court observed that the Future Group had agreed to give Amazon a veto on transactions like the Reliance Retail acquisition, but failed to hold good to that commitment. The high court also attached the properties of Future Group and its promoters Kishore and Rakesh Biyani and ruled that the company must deposit Rs 20 lakh into the PM-CARES fund, and that company executives must respond on why they shouldn’t be jailed.
March 22, 2021 – A division bench of the Delhi High Court stayed the March 18 order. Amazon appeals to the Supreme Court against this stay order.
July 12 – 17, 2021 – The Singapore International Arbitration Centre (SIAC) held a week-long hearing on Future Retails’ appeal to the validity of the emergency arbitrator’s order.
July 21, 2021 – The Supreme Court began hearing arguments from Future Retail and Amazon.
July 23, 2021 – CCI in a letter dated June 4 accused Amazon of concealing facts and making false submissions in 2019 when it sought approval for an investment in Future Coupons.
August 6, 2021 – The Supreme Court ruled in favor of Amazon by accepting its appeal against the Delhi HC order dated March 22, which let the deal between Reliance and Future Retail proceed. The court held that the emergency arbitrator’s award obtained by Amazon in Singapore can be legally enforced in India.
August 12, 2021 – Future Group filed a Special Leave Petition in the Supreme Court against the March 18 order of Delhi HC, which is yet to come up for hearing. An SLP can be filed against orders which are otherwise non-appealable.
August 17, 2021 – Amazon wrote to the Securities and Exchange Board of India (SEBI) asking the market regulator to withdraw the conditional approval it has given to the Future – Reliance deal.
August 18, 2021 – The Delhi High Court told Future Group that, unless it gets a stay order from the Supreme Court by September 17, the court will implement its single-judge order issued on March 18 restraining the sale of Future Retail to Reliance and attaching its properties
August 28, 2021 – Future Group files a fresh legal challenge in Supreme Court against Amazon.
September 9, 2021 – The Supreme Court stayed all Delhi HC orders in the Amazon vs Future case and asked SEBI, CCI, and NCLT to not pass any final orders regarding the Reliance–Future deal for four weeks.
September 29, 2021 – The National Company Law Tribunal allowed Future Group to convene meetings of its shareholders and creditors for approval of its deal with Reliance. The tribunal refused Amazon’s application opposing this.
October 1, 2021 – Reliance extends the deadline to complete the acquisition of Future to March 21, 2022.
October 11, 2021 – Future group firms have convened shareholder and creditor meetings on November 10 and 11 to seek approval to merge the 19 different firms that Reliance is buying into a single entity, Future Enterprises, the Economic Times reported. The firms that have convened meetings include Future Retail, Future Consumer, Future Lifestyle Fashions, Future Markets Networks, and Future Supply Chain Solutions.
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