For the past 18 months now e-commerce giant Amazon is fighting a legal battle against Future Group, which owns Central, Big Bazaar, Brand Factory, FBB, Nilgris, and a few other brands. And their case has traveled everywhere from Singapore International Arbitration Center (SIAC), Delhi High Court, National Company Law Tribunal (NCLT), National Company Appellate Law Tribunal (NCALT), Competition Commission of India (CCI), and even to the Supreme Court of India. Despite the 2-year long corporate tussle, Amazon and Future Group’s legal battle is due for its climax – something that will decide the future of India’s retail business.
You might be wondering Amazon is an e-commerce giant and Future Group is almost at the edge of bankruptcy and the company has already been taken over. However, that’s exactly where the problem is – the ‘takeover’ by Reliance. Now, the next question is, if Future wants a deal with Reliance, let them be – why Amazon is jealous and poking their nose in somebody else’s business.
Well, it is their business and here we narrate the entire story about this legal battle between Amazon and Future Group. Also, why ‘Future Retail’ is both important to Amazon and Reliance. After all, it is the question of becoming a retail mogul in one of the most populous countries of the world.
The Deal – In 2019 Amazon Signed a Deal with Future Group
By investing something close to Rs. 1,500 crores in Future Coupons, Amazon acquired a small stake in Future Retail. The only reason why the e-commerce giant entered the deal was that it gave them ‘exclusive rights’ to assets held by Future Retail Ltd. There was a non-compete clause and also a right-of-first-refusal pact. And due to this, Future Group couldn’t sell the likes of FBB, Nilgris, and Big Bazaar to any of its competitors.
The Rescue – In August 2020, Reliance Decided to Take Over
Things really weren’t going well for Future Group with bank debt of more than Rs 12,000 crore, and then there were other expenses, plus the salaries. The pandemic made it all the worse. However, just when they couldn’t think of how to float in the crisis, Reliance entered the scene like a knight in the shining armour and offered to take over the retail business for Rs. 24, 713. This happened in August 2020.
Everybody was happy – from the companies’ owner to its employees because Reliance decided to keep the 30,000 employees on its payroll. However, it violated Amazon’s interest as well as the deal that was signed between the two companies.
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The Hold – In October 2020, Amazon Filed an Emergency Arbitration Case With SIAC
Highly furious with the Future-Reliance deal that hampered its future retail plans in India quite literally, Amazon filed an emergency arbitration case with Singapore International Arbitration Center. In its order on October 25, 2020, the SIAC’s order came in favor of Amazon, and a restraining order was issued against Future. This order kept the Reliance-Future takeover on hold.
The Challenge – In November 2020, Future Knocked the Doors of Delhi High Court
Seeking help on the situation the Future group put their case in Delhi court. The single bench court didn’t really cite Amazon’s protests as invalid or void but said that the claims were based on incorrect assertions.
Meanwhile, during the same time, the Competition Commission of India (CCI) also gave a nod to the Future and Reliance deal despite the protest by Amazon.
The Counter – In January 2021, Amazon Moved to Division Bench of Delhi High Court
On January 2021, SEBI cleared the Reliance-Future deal and at the same time Amazon not content with the single bench decision moved to the division bench of Delhi Hough court seeking reversal order and also for reinforcing the SIAC’s order – It also demanded detention of Kishore Biyani and other directors of Future Group.
One Step Ahead – Future Approaching NCLT (January 26, 2021)
Getting conditional approvals from both CCI and SEBI, Future Group then approached NCLT on January 26, 2021 seeking the tribunal’s approval to conduct share holder’s meeting in relation to the merge with Reliance.
Twist Pe Twist in Amazon and Future Group Legal Battle – February 2021
On February 2, 2021, the High Court affirmed the validity of SIAC’s order and even ordered the status quo. However, the very next day, Future yet again challenged this verdict in the division court. On February 9, 2021, the Court’s verdict came out in Future’s side – giving out a go-ahead to the Future and Reliance deal.
Reaching the Apex Court
Amazon then knocked on the doors of the Supreme Court against the order of the HC Division bench. On February 22, 2021, the SC restrained NCLT from approving any merging of Future and Reliance.
Show-Cause Notice to Biyani – March 2021
Single-judge of Delhi High Court that had passed a short interim order in February delivered a complete detailed order on March 18. It not only upheld SIAC’s order but also issued a show-cause notice to Kishore Biyani along with other directors so as to explain why they should not be sent to prison, as pursued by Amazon in their enforcement application.
The same was used by Amazon in their appeal to SC. However, Future too challenged the March 18 verdict with the Supreme court. Phew!
And the saga of Amazon and Future Group legal battle continued from one court to another
Kahani Mai Twist – CCI Rejected Amazon’s Deal with Fortune in December 2021
We all have heard the Hindi saying, naa rahega baas aur naa bajegi baasuri and something similar happened in December 2021 when CCI suspended its nod in the 2019 deal between Amazon and Future. Post this, the Future group once again started moving courts with the CCI’s order.
Appeal – In Jan 2022, Amazon Went to NCALT National Company Appellate Law Tribunal
…And then at the same even offered Future with Rs. 7000 crore offer. However, Future rejected it as it is pennies in front of Reliance almost 25,000 crores deal.
Meanwhile, the Supreme Court of India has asked the three parties involved to reach an out-of-court settlement in 10 days the last day being March 15, 2022, so that the court’s verdict does not harm any one of the three companies. The companies have agreed to decide things amicably.
Let’s see what the future of the three retail companies hold –
