The year long court battle between Amazon and Future Group over Reliance being the new owner of the latter ends with a verdict that neither Kishore Biyani nor Mukesh Amabni ever imagined. Amazon.com Inc. has been awarded a major victory by the Supreme Court of India in a case in which the US-based ecommerce giant tried to block a $3.4 billion Reliance-Future deal.
The tug of war between two of the richest men in the world, Amazon’s Jeff Bezos and Reliance Industries’ Mukesh Ambani, could have a major impact on India’s retail sector. It will also determine if Amazon can challenge Reliance’s dominant position in the country’s almost trillion-dollar retail market.
Future and Amazon are locked in legal battles over Reliance-Future Retail. Dazeinfo has been reporting about all the major developments in this regards. The global eCommerce giant accuses the Kishore Biyani led retail giant Future Retail, which wants to sell its assets to Reliance, of violating existing contracts. Future Retail, however, denied any wrongdoing.
Today, the Supreme Court’s two-judge bench ruled that the October decision of a Singapore arbitrator, which put the Reliance-Future agreement on hold after finding merit with Amazon’s objections, was valid and applicable to India as well. Future Retail argued it wasn’t but Amazon had claimed that the order was binding.
In 2019, both Amazon and Future Coupons, a group company of Future Retail, signed a $200 million deal to use the Singapore arbitrator for any disputes. The agreement has a clause of Amazon getting ‘first-right to reject‘ in case of Future Retail wants to sell its assests.
Future Retail shares crashed nearly 10% following the order, while Reliance Industries shares were down 1.3%
Future has over 1,700 outlets that sell groceries in 400 indian cities. Future Retail is a valuable asset for Amazon and Reliance as each of them are trying to gain dominant position in India’s retail market, which is estimated $1.4 trillion market by 2025.
After Amazon’s victory in the Supreme Court case, shares of Future Retail plunged 10% to Rs 52.55 in intra-day trading on Friday.The shares of Reliance Industries also took a big hit. BSE data showed that the Reliance Industries Limited (RIL) shares fell 2.53 percent to Rs 2079.20. The stock was at 11.44 AM down 2.4% at Rs 1,082 and the BSE barometer Sensex was 0.41 percent lower at 54.271.
Other Future Group companies saw their stock prices fall as well. Future Enterprises and Future Supply Chain Solutions were all locked in 10% lower circuits on BSE. Future Consumer stock tumbled 16% to Rs 6.66 during the same period.