The US giant has been pressing the Securities and Exchange Board of India (SEBI) to review Reliance’s August deal to buy retail, logistics and other assets from Future Group for $3.4 billion (roughly Rs. 25,300 crores) including debt.
Amazon argues it had a 2019 agreement with Future which prevented the Indian group’s retail assets from being sold to certain parties including Reliance, which is led by Asia’s richest man, Mukesh Ambani.
The spat is being closely watched as a key test of whether Indian firms, courts and regulators will respect arbitration decisions made in accordance with overseas arbitration rules, and adds to headaches for Amazon in India which is also dealing with antitrust challenges.
The injunction was granted on Sunday October 25 and was reported by media with Amazon issuing a short statement saying it welcomed the decision.
Reliance later that evening said in a stock exchange filing that it had been informed of the arbitration order and would enforce its rights to complete the deal with Future without delay.
It is this October 25 filing which Amazon argues in its 20-page letter that indicates Ambani’s group was privy to “price sensitive” details of the injunction.
Ambani’s group “was not a party to the arbitration proceedings … and could have received details related thereto only from FRL (Future Retail) or its Promoters,” said the letter.
A spokesman for Future Group said in a statement to Reuters it denies the allegations made in the letter and that news of the injunction was in the public domain from Sunday.
Reliance and SEBI did not respond to Reuters requests for comment. Amazon declined to comment on the letter’s contents.
Future Retail, which has argued that Amazon’s agreement last year was only with a separate Future Group unit, issued a statement to the stock exchange on the morning of October 26 saying it was examining the arbitration order and that it believed the order would have to be tested by Indian law.
Future Group, which operates supermarkets and high-end food stores and has more than 1,500 outlets across India, has argued it entered into the deal to sell retail assets to Reliance because its business was severely hit by the COVID-19 pandemic and it was critical to protect all its stakeholders.
It remains to be seen whether Indian courts and regulators will side with Amazon or Future Retail. Future Retail has asked a New Delhi court for an order to restrain Amazon from approaching Indian regulators to block its deal with Reliance. Hearings on the case began on Tuesday.
© Thomson Reuters 2020
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