Amazon has approached the Singapore International Arbitration Centre (SIAC), claiming that Future Group breached the contract under which the US online giant took an indirect stake in their retail business in 2019. The terms of the proposed deal between Future Retail and Reliance Industries does not have its approval and hence should not go through, it said.
Amazon has about 5% stake in Future Retail — which houses all food and grocery stores such as Big Bazaar and Easyday — after it bought 49% in promoter holding firm Future Coupons for Rs 1,500 crore last year. As per Amazon's interpretation of their contract, Future cannot sell any shares to Reliance or any other competitor and that Amazon had the right of first refusal.
“While the agreement said Amazon has the first right to buy Biyani’s entire holding in this company between three and ten years after the transaction, Future Group was restricted to sell off or transfer its assets to third party without their consent from day one, a clause that was clearly breached,” said a person aware of the matter. “The contract had exceptions such as selling or transferring business to affiliates, but strictly prohibited other firms.”