Kishore Biyani’s Future Retail (FRL) said that it is not a party to the agreement under which Amazon has invoked arbitration proceedings, as the battle for India’s retail market between Mukesh Ambani and Jeff Bezos heats up.
According to sources close to Amazon, Future’s statement is being seen as “antagonistic” by Amazon India, and counter to the contractually agreed-upon method to resolve the dispute.
“There are enough provisions for the international arbitration ruling to be enforced in India without approaching the Indian courts. International arbitration was part of the deal between the two companies,” this person added, who is aware of Amazon’s thinking on the matter.
However, multiple sources added the latest situation is an indication of Future Group’s plans of approaching Indian courts to challenge the matter. These sources said, at this point, both the parties could end up at Indian courts to enforce or challenge the interim ruling. “The jurisdiction will be Delhi high court, if the matter reaches there. This is definitely an option on the table (for Future),” one of the people mentioned earlier added.
A Future Group spokesperson declined to comment beyond its media statement on Monday. “In any enforcement proceedings, FRL would take appropriate steps to ensure that the proposed transaction will proceed unhindered without any delay,” it said.
Reliance, which said in August it is buying Future Group assets for Rs 24,713 crore, had issued a similar comment on Sunday, indicating it wants to go ahead with the formal process of closing the deal, currently pending with regulators like the Competition Commission of India (CCI). As of Monday evening, regulators were yet to be informed officially about the SIAC order on the Reliance-Future deal. The SIAC interim order is valid for 90 days. A final order is expected to come before this deadline expires.
“As per the advice received by FRL, all relevant agreements are governed by Indian law and provisions of Indian Arbitration Act for all intents and purposes and this matter raises several fundamental jurisdictional issues which go to the root of the matter. Accordingly, this order will have to be tested under the provisions of Indian Arbitration Act in an appropriate forum,” the company added.
Earlier in October, Amazon had approached SIAC over its dispute with Future Coupons, one of the holding companies of Biyani’s Future Group where Amazon had invested Rs 1,431 crore, citing breach of terms due to its sale of retail assets to Reliance Industries. This was preceded with a legal notice from Amazon to Future Group citing breach of terms by the latter.