Understanding the Battle between Reliance and Amazon for the ‘Future’

By Anugya Jha

Despite being hit hard by the second and first wave of COVID-19, the World Bank has projected 10% economic growth for India in the financial year 2022. In the last few decades, Indian economy has become a golden nest for the business maestros around the globe, who are desperate to spread their arms as wide as possible over a magnanimous population, forming a young-rudimentary yet a very promising market, ready to be cashed. 

The Jeff Bezos led Amazon which is the world’s largest e-commerce business has prepared for a battle against Asia’s richest billionaire, Mukesh Ambani’s Reliance to win over an Indian retail chain Future Group which would give them or prevent the other from gaining an easy access to numerous, widely spread, popular retail stores across India. 


Future Group, which holds several popular retail chains such as Big Bazar, Brand Factory, FBB etc. has more than 1500 retail stores across various Indian cities. It suffered a massive revenue loss of nearly Rs 7,000 crore in the early few months of the COVID induced lockdown since the stores were completely shut. 

Sinking in deep debts with no shores ahead, Future Group founder Kishore Biyani, in August 2020, struck a deal of nearly worth Rs 24,713 crores with Reliance. Selling its assets and liabilities in retail, wholesale, logistics, and warehousing businesses to the Reliance group, Mr. Biyani contented that the deal would help them settle their debts. But, adding an interesting twist to the play, Amazon, in October 2020 contested this deal and accused the Future Group of breaching the mutually accepted Shareholders Agreement (SHA), by announcing an asset sale deal with Reliance, starting a rigorous legal tussle with its Indian counterpart and putting the Reliance-Future deal on hold. 

What was the Future-Amazon deal? 

In the October of 2019, Amazon had acquired a 49% stake in Future Coupons by entering into a SHA with the Future Group. Through this deal, Amazon got roughly 4.8% stake in Future Retail Limited (FRL) as well. The said agreement consisted of a provision that prevents the Future Group from entering into a sale agreement with around 30 restricted persons/companies, with Reliance being on top of the list. 

The deal had also given Amazon the right of first refusal to acquire more shares in FRL between 3-10 years of the agreement. This means that it could exercise its contractual right to acquire FRL’s holdings in the company before anyone else between 3-10 years from the date of the aforesaid agreement, only if it declines to enter into the transaction, the Future Group would be free to entertain other offers. 

What have been the legal advancements?

Amazon, baffled by the announcement of Reliance acquiring the assets of the Future Group, filed a complaint to the Singapore International Arbitration Centre (SIAC), which was the agreed seat of arbitration in case of any arising dispute. In accordance with the provisions of the SIAC rules, an emergency arbitrator was appointed who decided to put a hold on the billion-dollar Reliance-Future deal. This resulted in a miniature win for Amazon and a temporary halt on the transaction being processed between Reliance and Future Group until the Arbitration Tribunal was fully composed. 

To this, Future-Reliance contended that the order passed by the Emergency Arbitrator was not binding in accordance with the Indian Laws. Further, they stated that the Reliance retail deal had not been objected to but rather supported by the regulatory bodies in India, which included Competition Commission of India, Securities and Exchange Board of India and National Company Law Tribunal. 

Amazon approached the Delhi High Court for the enforceability of the arbitration order and to its win, the single judge bench upheld the Emergency Award Passed in favour of Amazon and halted the Future-Reliance Deal. 

Going ahead, FRL filed an appeal in the Delhi High Court challenging this and the division bench overturned the single bench’s order. The bench stated that the agreement between Amazon and another Future Group firm cannot be enforced as FRL was not a party to the pact. 

Post this, Amazon approached the Supreme Court challenging the order passed by the division bench of the Delhi High Court. The apex court on 19th April 2021, in the latest development of the tussle, ordered a stay on all the further proceeding before the single judge and the division bench of Delhi High Court in the Amazon-Future case and said that it will hear the matter at length. 

What’s at risk?

The royal tussle of three combatants (Amazon, Reliance and Future Group) is essentially for dominance in the promiscuous consumer retail market of India which is estimated to be $1 trillion in value. The Future Group, with its survival depending upon this deal and compounding obligations foresee a fate of bankruptcy, if the deal fails. The dispute is complex in the sense that while Business giants battle for the future of the market, the apex court will  ‘battle’ over deciding the matter of institutional arbitration in India, with mending the confidence in the mind of the international business community. 

(Anugya is a 3rd year law student at Faculty of Law, Jamia Millia Islamia. She tweets at @AnugyaJha3)

The Analysis (TA) is a research and communication group | Analyzing India’s legal, policy and political affairs. Write to us at contact@theanalysis.org.in

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