Bengaluru / Mumbai: Amazon Inc. has approached the Singapore International Arbitration Center (SIAC), claiming that Future Group has breached the contract under which the U.S.-based e-commerce major took a stake in its subsidiary and requests the deal with Reliance Industries Ltd to purchase the retail assets of the Indian company to be stopped.
SIAC is a non-profit organization that offers an alternative process for resolving disputes arising from cross-border transactions.
Amazon agreed to buy 49% of one of Future’s unlisted Future Coupons firms last year, with the right to buy from the flagship Future Retail Ltd. This right can be exercised between the third and the tenth year after purchase.
Amazon has also sent a legal notice to Future Group, led by Kishore Biyani, about its ₹Sale of assets of Rs 24.7 billion to Reliance Retail Ventures Ltd, calling it a breach of a 2019 agreement between Amazon and Future, and has written to the stock exchanges and the stock market regulator: mint reported Wednesday.
“We have taken steps to enforce our contractual rights. As the matter is under trial, we are unable to provide details, “said an Amazon spokesperson when approaching SIAC.
A person familiar with the development said that it was mentioned in the contract between Amazon and Future Group that in case of any dispute related to breach of the agreement, the matter will be brought before SIAC.
“Since Future Group has not yet responded to the legal notice, as a logical progression of the mutually agreed contract, the case has been transferred to SIAC. Amazon’s main goal is to ensure compliance with contractual obligations, which will indirectly affect the RIL-Future deal, as the SIAC can now include Indian regulators, who would have to approve the deal. If Future Group does not comply with the contract, SIAC may impose a strong sanction on Future Group, but that is not the main objective of Amazon, “added the person above, requesting anonymity.
A Future Group spokesperson did not comment on the inquiries.
Amazon claims that a clause between Future Group and Amazon clearly stated that Future Group could not sell any assets within 10 years of the agreement with Amazon. The right of first refusal (RoFR) was on Biyani’s own shares.
With the acquisition of the Future Group retail business, Reliance Retail has become one of the biggest competitors to Flipkart, owned by Amazon and Walmart Inc. in India.
Amazon’s course of action could well derail one of the largest purchase transactions of the recent past.
Suneera Tandon also contributed to the story.
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