Amazon and Future Group have been stuck in a contentious business conflict for more than a year, which has stalled Futures $3.4 billion cash transfer to US rival Reliance Industries, with no end in sight. Here’s what the controversy is about, which is thought to be the driver of who has a say in one of the world’s fastest-growing retail markets. What caused the dispute In 2019, Amazon and Future, India’s second-largest retailer behind market leader Reliance, became business partners after the US corporation invested $200 million in an Indian group gift voucher unit. Amazon claims that the deal contained specific non-compete clauses that prohibited Future from selling retail assets to certain competitors, such as Reliance, which is managed by one of India’s richest men, Mukesh Ambani.
However, Future, which was hit hard by the Covid-19 epidemic, decided to sell assets to Reliance in 2020. Amazon then approached Singapore arbitrators and successfully ended the transaction. Both parties have filed lawsuits in courts, including the Supreme Court, because the place of arbitration is in New Delhi, and Indian law governs the proceedings. What do Amazon and Future say about their partnership?
Future claims that the agreements include: According to the US company, the thought of a Future-Reliance contract undermines the latter. Future admits to no wrongdoing, claiming that Amazon is illegally seeking to wrest control of Futures’ online market. Future Retail, the group’s flagship retail arm, has announced that it will be liquidated and that if the Reliance agreement fails, its more than 27,000 workers will become jobless. In this controversial controversy, both sides have deployed a team of lawyers and top law firms.
What is the bigger picture assuming that Amazon will succeed in a $900 billion retail market with 1.3 billion consumers is the ultimate goal. Reliance, a conglomerate owned by Reliance, has 1,100 supermarkets, while Future has more than 1,500. Both are expanding rapidly into e-commerce, but the Future deal would also strengthen Reliance’s retail presence, which has attracted major foreign investors. Amazon has invested $6.5 billion in India, a key growth market for the company, which it considers to be a leading e-commerce market.
Amazon’s efforts to stop billionaire Ambanis’ expansion plans coincide with Keeping Future away from Reliance. Amazon also stated that Reliances’ combined status with Future would further enhance competition in the Indian retail industry, according to a non-disclosure legal filing. What happened to CCI? Future reported to the Competition Commission of India (CCI) that Amazon was making inaccurate and contradictory submissions about the intentions of the 2019 deal.
Although Amazon argues that the CCI acted beyond its power, Future maintains that the US corporation no longer has the right to assert its claims because the 2019 agreement itself lacks regulatory approval.In a blow to the US giant, the Delhi high court suspended the Singapore arbitration proceedings between the two sides earlier this month in reaction to the CCI decision.The case has since been postponed, but Amazon has appealed the court’s decisions which are yet to hear it.