Amazon Vs. RIL: The battle of the wealthiest

The largest company by revenue globally is in a year-long battle with Reliance Industries Ltd.(RIL) for the Future Group deal.

According to the contract’s terms between Amazon and Future group, the former one has the first right to refuse any purchase stake in the latter. If any consideration to selling share arises in the Future Group, Amazon has a right to rebuff that deal.

In August 2020, RIL negotiated a contract with Future Group to acquire its retail, wholesale, and logistics operations for $3.4 billion. This deal sparked a skirmish between Future Group and Amazon.

The latter called this a breach of their old terms of the contract.

Recent developments in the deal

On 25 October 2020, Amazon obtained an order from Singapore International Arbitration Centre (SIAC), stopping Future Group from selling its business to RIL. However, RIL’s owner dismissed SIAC’s order by saying: “We have proper legal advice, right, and obligations” to take forward the deal.

Even Kishore Biyani, the owner of Future Group, said that the agreement of $3.4 billion would proceed “unhindered wihout any delay.”

Though both RIL and Future Group are confident about their deal, their stocks had to face the investor sentiments’ wrath.

RIL stock fell by 2%, while Future Group decreased by 6% between October 26 to 29, 2020.

Near future of this deal

After Amazon got an interim stay on the RIL-Future deal by an arbitrator in Singapore, legal complications started to fire up. Experts voiced out that “SIAC order cannot be enforced in India” until the court ratifies it.

Future Group referred to SIAC as a non-profit body offering dispute resolution to parties worldwide. It also claimed that SIAC’s orders do not bound the deal. It also highlighted the fact that “Amazon and Future deal” did not include Future retail business.

Future Group is now challenging the SIAC order in the Indian High court. Hence, the time ahead would decide the deal’s fate.

If the Reliance-Future deal turns into a success, it will terrorize the top player Amazon’s E-commerce business. Results may be whichever way, but this bitter sat would be the greatest tussle between the wealthiest men of the world.