Amazon.com Inc and India’s Future Group have been locked in a complex legal stand-off. It has stalled Future’s $3.4 billion sale of assets to the US firm’s rival Reliance Industries NSE 1.08 % for more than a year.
The problem started in 2019, when Amazon and Future became business partners. The U.S. company invested $200 million in a gift voucher unit of the Indian group.
According to Amazon, that deal came with certain non-compete clauses that prohibited Future from selling retail assets to certain rivals. They also include Reliance, run by Mukesh Ambani. The deal also included clauses for settlement of any disputes under rules laid down by the Singapore International Arbitration Centre.
In 2020, Future was hit hard by the COVID-19 pandemic and decided to sell assets to Reliance. Amazon then approached Singapore arbitrators and successfully stopped the sale.
Both parties have challenged each other with lawsuits in Indian courts, including the Supreme Court, since the “seat of arbitration” remains in New Delhi and Indian law governs the proceedings.
The conflict was carried to India’s antitrust agency (Competition Commission of India (CCI). Future complained that Amazon was making incorrect and contradictory submissions about the intent of the 2019 deal.
Amazon said it never concealed any information. Last December the company accused CCI of suspending its approval of the 2019 deal with Future, saying there was “a deliberate design on the part of Amazon to suppress the actual scope” of the deal and its interest in Future’s retail businesses.
While Amazon contends the CCI acted beyond its powers, Future maintains the U.S company no longer has any right to assert its claims as the 2019 deal itself now lacks regulatory approval.
This month the Delhi High Court halted the Singapore arbitration proceedings between the two sides in light of the Indian antitrust decision. However, Amazon has appealed the decisions in Indian courts which are yet to hear the matter.