Amazon-Future Group Dispute.
SIAC Rules in Favor of Amazon, Awards Rs 23.7 Crore in Future Group Dispute: Singapore – The Singapore International Arbitration Centre (SIAC) has concluded a significant chapter in the prolonged legal saga between e-commerce giant Amazon and Kishore Biyani’s Future Group, awarding Amazon ₹23.7 crore in damages. The tribunal found that Future Group had breached its contractual obligations by attempting a transaction with Reliance Industries, in direct violation of their existing agreement with Amazon.
In a decision that clarifies the enforceability of pre-existing commercial pacts, the three-member SIAC tribunal, comprising Prof. Albert Jan van den Berg, Prof. Jan Paulsson, and presiding arbitrator Senior Counsel Michael Hwang, determined that a resolution passed by Future Retail Limited’s (FRL) Board of Directors approving the deal with Reliance constituted a breach of its agreement with Amazon.
While Amazon had initially sought a substantial ₹1,436 crore in damages, representing its investment in Future Coupons Private Limited (FCPL), the tribunal awarded a significantly smaller sum of ₹23.7 crore. However, Amazon also received a considerable award for legal costs, with the tribunal granting ₹77 crore towards arbitration expenses and an additional ₹6 crore for arbitration fees. This amount represents approximately 60% of the estimated ₹125 crore in legal costs incurred by Amazon during the arbitration proceedings. The tribunal declined to award costs related to allied proceedings initiated or defended in Indian courts and tribunals.
Explaining the Future Group and Amazon Dispute
The core of the dispute traces back to Amazon’s 2019 investment of ₹1,431 crore for a 49% stake in FCPL. This strategic move aimed to provide Amazon with indirect access to Future Retail Limited (FRL), India’s second-largest retail chain and operator of Big Bazaar stores, circumventing foreign direct investment restrictions in multi-brand retail. The shareholder agreements explicitly included restrictive covenants, barring Future Group from selling assets to a pre-defined list of 30 “restricted persons,” which notably included Reliance Industries. Amazon’s long-term strategy involved gaining control of Future Group’s extensive network of approximately 1,800 stores across India.
The conflict escalated in August 2020 when Future Group, facing severe financial distress amidst COVID-19 lockdowns and mounting debts of ₹22,000 crore, announced a ₹24,713 crore deal to divest its retail, wholesale, logistics, and warehousing businesses to Reliance Industries. Amazon swiftly objected, asserting that this proposed transaction directly violated their 2019 agreements.
Amazon subsequently initiated arbitration proceedings at the SIAC in October 2020, successfully securing an emergency arbitration award that effectively halted the Reliance-Future deal. The case evolved into a complex multi-jurisdictional battle, involving not only the SIAC but also various Indian courts and regulatory bodies, including the Competition Commission of India (CCI), which later suspended Amazon’s original 2019 deal approval due to non-disclosure of material information.
Legal Representation
Amazon was represented by a team of prominent legal counsel, including Senior Advocates Gopal Subramanium, Gourab Banerji, Amit Sibal, and Nakul Dewan, instructed by P&A Law Offices, AZB & Partners, and Wong Partnership LLP.
Future Coupons and the promoter group were represented by Senior Advocate Dayan Krishnan and Senior Counsel Abraham Vergis (Singapore), instructed by Agarwal Law Associates.
Future Retail Limited had King’s Counsel Harish N. Salve and Senior Advocate Darius Khambata representing them, instructed by Ameet Naik for Naik, Naik and Company.
