Amazon has filed a petition in an Indian court seeking detention of Future Group’s founder and seizure of assets for violating an arbitration court’s order that temporarily halted the sale of its retail operations to Reliance Industries, people with knowledge of the matter said.
The Delhi High Court will hear the matter on Jan 28. Besides seeking prison for tycoon Kishore Biyani, the e-commerce giant wants enforcement of the Singapore arbitrator’s ruling in October against the US$3.5 billion (S$4.6 billion) deal, the people said, asking not to be identified citing rules on speaking to the media.
The Jeff Bezos-led American firm, in its petition, alleged deliberate and willful disobedience of the order temporarily restraining the Future Group from going ahead with the sale, the people familiar said. It also wants the court to issue an injunction stopping the deal. Representatives for Amazon in India declined to comment on the petition.
In a late evening statement to stock exchanges, Future Retail, the listed flagship of the group, said it is aware of the petition filed by Amazon and will defend itself.
The cash strapped Indian retailer, which says it would collapse should the deal with billionaire Mukesh Ambani’s conglomerate fail, is essentially caught between two of the world’s richest men as they compete for dominance in India’s estimated US$1 trillion consumer retail market. The new petition marks further escalation in what’s already a fierce legal wrangle across courtrooms in two countries.
Going All Out
Amazon, which owns a minority stake in one of Future Group’s firms, has accused the Indian retailer of violating a contract when it agreed to sell its retail assets to Reliance. Both Reliance and Future have in the past expressed their commitment to the deal.
The latest petition signals that Amazon is going all out after writing letters to India’s market and antitrust regulators in a bid to block the deal. Despite Amazon’s objections, the antitrust regulator gave its approval in November. Last week, India’s oldest exchange BSE sent a letter saying it has no ‘adverse observations’ to certain matters regarding Future’s deal with Reliance.
Future Retail had petitioned the same Indian court in November urging it to bar Amazon from meddling in its asset sale by writing to local regulators. During court arguments at that time, Future lawyers cast it as a troubled Indian retailer that was being driven to bankruptcy by a global giant, while Amazon hinted the spat was about India’s willingness to enforce business contracts.
The stakes are high for the two billionaires. For Amazon’s Bezos, who lost the retail battle in China, India is the last billion-people-plus market that can boost his company’s growth. Blocking Reliance is key as it’s already the country’s biggest brick-and-mortar retailer.
Acquiring Future’s retail, wholesale, logistics and warehousing units would almost double Reliance’s footprint and give it unparalleled edge over rivals – an advantage Amazon is not willing to cede. Reliance, with its plans to take on Amazon and Walmart’s Flipkart in online retail, isn’t willing to back off either.