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 and Reliance Industries’ deal to acquire Future Group’s retail assets should be called off. SIAC, a non-profit body is an alternative method of dispute resolution arising from cross-border transactions involving foreign’ companies beyond the traditional forum of court.
Amazon has also sent a legal notice to Future Coupon, the promoter entity where it bought 49% stake, claiming that the contract stipulated that Future cannot sell any shares to Reliance or any other competitor and that Amazon had the right of first refusal.
The Seattle based retailer has raised objections to Future Coupons not seeking approval from it even when the US company had the rst right for any stake sale. The agreement also had a clause restricting them from selling their shares to any third party or competitor without their consent. It also clearly mentioned Reliance.
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 Future Coupons for Rs 1,500 crore last year. It also says it has the first right to buy Biyani’s entire holding in this company between three and ten years after the transaction.
After foreign ownership rules were amended in February last year, Amazon adopted the route of an investment through Future Coupons so that it could adhere to regulations governing overseas investment in retail.