Heading for a settlement? Amazon counsel approaches Reliance Retail for talks

Law firm AZB & Partners has approached Reliance Retail on behalf of Amazon, with a proposal to hold talks for an out-of-court settlement of the American ecommerce company’s dispute over Future Group‘s deal to sell its retail assets to the Reliance Industries unit, a person familiar with the development said.

The initiative follows an undertaking given by the lawyers of Amazon and the Future Group in the Supreme Court last week that they would seek to settle the 18-month-long dispute through dialogue.

“The agenda of the meeting will be sent to Reliance soon,” the person said, asking not to be named. The tripartite meeting is expected to start later this week, he added.

Reliance Retail, Amazon and the Future Group did not respond to emails seeking comment till press time Wednesday. AZB managing partner Ajay Bahl declined to comment.

Reliance Industries is unlikely to sell any stake or form any sort of partnership with Amazon if Amazon makes such a demand as part of its bargain to resolve the impasse, the person said.

RIL a Major Omni-channel Player

Partnering Amazon does not fit into Reliance’s scheme of things, he added.

“Reliance has already established itself as a major omni-channel player in Indian retailing and partnering with Amazon is not going to help Reliance take (its online venture) JioMart global either, as Amazon would not like to create more competition in other markets,” he said. “So, a partnership is not needed.”

If Reliance Retail agrees to discussions, it would be the first such interaction of the three parties. Last Thursday, a Supreme Court bench led by Chief Justice NV Ramana had postponed its hearing of the dispute to March 15, after the attorneys of Amazon and the Future Group proposed to work towards a solution outside of courts.

Amazon has contested the deal to sell the assets of Future Retail to Reliance Retail for around Rs 25,000 crore. The US company claims that the terms of its 2019 investment in a promoter firm of Future Retail give it the first right of refusal for any stake sale in the retail company and also bar the Indian group from selling a stake to Reliance. Its legal challenge, which has stalled the deal and pushed the Future Group to near bankruptcy, is currently being fought in the Supreme Court, the Delhi High Court and in various tribunals within India and in Singapore.

Amazon has won an order from the Singapore International Arbitration Centre in 2020, staying the Future-Reliance deal until the arbitral body decided on the dispute, while the Competition Commission of India has suspended its approval to Amazon’s investment in the Future Retail promoter firm, saying that the ecommerce firm had misrepresented facts in its application.