What is the Future-Reliance deal? 

In August 2020, Kishore Biyani’s Future Group entered into an agreement with Reliance Retail, a subsidiary of the umbrella Reliance Industries Limited (RIL) group, to sell its retail, wholesale, logistics and warehousing to the latter. 

As a part of the deal, Future Retail will sell its supermarket chain Big Bazaar, premium food supply unit Foodhall and fashion and clothes supermart Brand Factory’s retail as well as wholesale units to Reliance Retail. 

Following the nationwide lockdown in March, to contain the spread of Covid-19, the retail business of Future Group had come under more stress. 

Sales in many of its premium food sales arm Foodhall and Brand Factory had come to a near halt in the lockdown, which lasted more than two months. 

Future Group was under immense pressure from its lenders, led by the State Bank of India, to manage its debt, and the deal was seen as a bid by the group to cut down on the same. 

Before the August sale to Reliance, Biyani had been wooing several business groups to sell shares in several companies of Future Group in an attempt to cut down on the debt, but had not seen much success. 

Why is Amazon objecting to the Future-Reliance deal? 

In 2019, Biyani’s Future Retail had signed another deal with global e-commerce giant Amazon. 

As part of the deal, Amazon had acquired 49 per cent stake in Future Coupons, the promoter firm of Future Retail in a deal worth nearly Rs 2,000 crore.

(A corporate promoter is a firm or person who does the preliminary work incidental to the formation of a company, including its promotion, incorporation, and flotation, and solicits people to invest money in the company, usually when it is being formed) 

While Future Retail would be able to place its products on Amazon’s online marketplace, the two had also agreed that the Future Retails products would also be a part of Amazon’s new plan, which intended to deliver products in select cities within two hours of a customer ordering them. 

Future Retails has more than 1,500 stores pan India.(imp) 

The deal had also given Amazon a ‘call’ option, which enabled it to exercise the option of acquiring all or part of Future Coupon’s promoter, Future Retail’s shareholding in the company, within 3-10 years of the agreement. 


Amazon claims that its contract with the unlisted Future unit(Future Coupons) barred a transaction with a number of persons and companies, including Ambani and Reliance. 

Amazon said the deal was a violation of a non-compete clause and a right-of-first-refusal pact it had signed with the Future Group. (right of first refusal basically means that while entering into a deal with a third party, Future Group had to take Amazon on board, Amazon’s consent should be necessary for Future Group

The deal also required Future Group to inform Amazon before entering into any sale agreement with third parties. 

What’s the fight really about? 

The fight is essentially for the dominance of India’s estimated $1 trillion consumer retail market. 

Reliance is already the country’s biggest brick-and-mortar retailer. Acquiring Future’s retail, wholesale, logistics and warehousing units would almost double its footprint and give it unparalleled edge over rivals — an advantage Amazon is not willing to cede.(Future Group has

around 1800 retail outlets in India,Reliance gets complete access to that with the deal with Future Group)(Amazon be like wtffff) 

Blocking Reliance is crucial for Amazon if it wants to hold sway over the only billion-people plus consumer market still open to foreign firms. It has pledged to invest $6.5 billion, a sign of its commitment to the Indian market. 

Future Group is caught in the middle of this tussle between companies helmed by two of the world’s richest men. 

On its part, the Future Group has said that it had not sold any stake in the company, and was merely selling its assets and had therefore not violated any terms of the contract. 

Singapore Arbitration 

After accusing Future of breaching its contract, Amazon secured emergency relief from an arbitration court in Singapore in October that temporarily restrained Future Group from going ahead with the asset sale 

Along these lines, Amazon also sent a letter to the Securities and Exchange Board of India (SEBI), the Bombay Stock Exchange and the National Stock Exchange (NSE) asking them not to approve the Future-Reliance deal as there was an interim stay order on the same. 

Amazon sought enforcement of the arbitration order in India and asked a local court in January to detain Biyani as well as seize Future Group’s assets if it doesn’t comply. 

Asking the agencies to take note of the stay order, Amazon is learnt to have said that if the deal went ahead, it would show companies across the world that orders by reputed tribunals such as the Singapore International Arbitration Centre (SIAC) were not respected in India. 

 A judge at the Delhi High Court earlier this month agreed with Amazon and halted the asset sale. 

What Happened Next?

Future Retail appealed the order before a two-judge panel, which within days overturned the ruling saying that the agreement between Amazon and another Future Group firm cannot be enforced as Future Retail was not a party to that pact. (basically implying that a deal with Future Coupons cannot be construed as a deal with Future Retail) 

The setback for Amazon comes weeks after it wrote letters to local regulators requesting them to stop approvals for the deal. 

The US e-commerce firm can — and most likely will — appeal the adverse ruling in India’s Supreme Court. 

The local antitrust regulator, Competition Commission of India, gave its approval to the deal in November. 

The stock exchanges said in January that they had no adverse observations. 

Future Group is now awaiting a company court’s (National Companies’ Law Tribunal)(NCLT) nod on the deal. 

What are the arguments by the two sides? 

During courtroom arguments, Future’s lawyers have said that Future Retail — the entity selling the assets — was not part of the contract between Amazon and the unlisted group firm(Future Coupons) in which Amazon acquired a stake 

Future Group’s lawyers have also argued that its existence hinges on the sale to Reliance, and an aborted deal would result in the loss of tens of thousands of jobs. They say the Indian retailer is being driven to bankruptcy by a global giant. 

Amazon’s counsel argued that both the Future firms were controlled by the same owners. Amazon has hinted that this spat is about India’s willingness to enforce business contracts. 

If Future is allowed to renege on a contract, it’ll mean business contracts are not sacrosanct and investments in India are risky — an inconvenient image as the nation looks to lure foreign investment.

Who’s hanging by the thread awaiting a verdict? 

Future Retail and the group at large, since their survival depends on it. The group defaulted on obligations in August 2020 and missed an interest payment on its dollar bond this January. Future Retail has posted losses for four straight quarters and its shares have plunged 76% in the past year. The Indian retailer will go bankrupt if the deal fails, Salve has argued in court in the past. 

The firm has refused to explore an out-of-court settlement with Amazon as it has already sought regulatory approvals for the deal with Reliance. 

Amazon doesn’t want Reliance to acquire Future’s assets even if it means its actions “sink the ship,” Salve said. Amazon has denied that saying it intends to save the Indian retailer.

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