Amazon threatens legal proceedings against Future Retail, promoters
Ecommerce giant Amazon on Tuesday put out a public notice in a newspaper accusing Future Retail (FRL) and its promoters of committing fraud after Reliance Industries (RIL) took over some retail stores of FRL.
Amazon is fighting a legal battle with FRL to stop the Kishore Biyani-led retailer’s $3.4 billion deal with Reliance Industries Limited (RIL). In October 2020, Amazon sent legal notice to Future for the deal. It alleged it breached Future’s agreement with Amazon. In August 2019, Amazon had acquired a 49 per cent stake in Future Coupons, the promoter entity of Future Retail, for about Rs 1,500 crore. It cited its non-compete agreement with Future as the deal specified any disputes would be arbitrated under the Singapore International Arbitration Centre (SIAC) rules.
Ahead of a crucial hearing in the Supreme Court today, Amazon has in a public notice reserved the right to civil and criminal legal recourse against FRL and its promoters for the transfer of its retail assets to RIL in a "clandestine" manner.
"FRL and its promoters have consistently acted in violation of the order passed by the emergency arbitrator and reaffirmed by the Arbitral Tribunal,” said the notice. “It has now come to light that FRL and its promoters have been attempting to remove the substratum of the dispute by purportedly transferring and alienating FRL's retail assets comprising the retail stores in favour of the MDA Group.”
MDA refers to Mukesh Dhirubhai Ambani. The notice comes at the end of a 10-day window given by the Supreme Court, which this month had given both sides time until March 15 to explore a settlement. During a hearing this month the court told the three parties — Amazon.com, Future Retail (FRL), and its promoter Future Coupons Pvt Ltd (FCPL) —to find ways to reach a settlement. The judges said the two sides could take 10 days to reach a solution.
“It may be noted that FRL and its promoters made false submissions before the Hon'ble Supreme Court that the retail assets would continue to vest in FRL until the scheme of arrangement with MDA Group was finally approved by the NCLT,” said the notice. “These false statements were made knowingly as FRL was on the verge of purportedly allowing handing over of the retail assets to the MDA Group."