SIAC awards ₹23.7 Cr to Amazon in Future Group dispute, ₹77 Cr towards legal costs of arbitration

The Singapore International Arbitration Centre (SIAC) has awarded ₹23.7 crore in damages to Amazon in its protracted legal battle against Kishore Biyani-led Future Group..SIAC held that Future Group had breached its contractual obligations to Amazon by entering into a transaction with Reliance, in violation of the terms of their pre-existing agreement.Although Amazon had sought ₹1,436 crore in damages, being the amount it had invested in Future Coupons Private Limited, it got only ₹23.7 crore. Amazon had also sought to recover associated legal costs incurred both in the arbitration proceedings as well as cases before courts and tribunals in India. .The three-member SIAC tribunal has held that the resolution passed by FRL’s Board of Directors approving the transaction with Reliance amounted to a breach of the agreement with Amazon.Sources indicate that the tribunal has awarded only 60% of the legal costs incurred during the arbitration proceedings, while declining to grant any costs related to the initiation or defence of allied proceedings.The three-member tribunal comprised Prof Albert Jan van den Berg, Prof Jan Paulsson and Senior Counsel Michael Hwang, who served as the presiding arbitrator..It has been estimated that Amazon incurred around ₹125 crores towards legal costs and the tribunal awarded ₹77 Crores towards legal costs, and ₹6 crores towards arbitration fees. .The Amazon-Future Group dispute originated from Amazon's 2019 investment of ₹1,431 crore to acquire a 49% stake in Future Coupons Private Limited (FCPL), a subsidiary of Future Group. This investment was designed to give Amazon indirect access to Future Retail Limited (FRL), India's second-largest retail chain operating Big Bazaar stores, since foreign companies face restrictions on direct investment in multi-brand retail.The shareholder agreements included restrictive covenants that prohibited Future Group from selling assets to a list of 30 "restricted persons," including Reliance Industries. Amazon's strategy was to eventually gain control of Future Group's extensive retail network of approximately 1,800 stores across India.The dispute arose in August 2020 when Future Group, facing severe financial distress due to COVID-19 lockdowns and mounting debts of ₹22,000 crore, announced a ₹24,713 crore deal to sell its retail, wholesale, logistics and warehousing businesses to Reliance Industries. Amazon immediately objected, claiming this violated their 2019 agreements.Amazon initiated arbitration proceedings at the SIAC in October 2020, securing an emergency arbitration award that halted the Reliance-Future deal. The case became a multi-jurisdictional battle involving SIAC, Indian courts and regulatory bodies like the Competition Commission of India, which later suspended Amazon's original 2019 deal approval for non-disclosure of material information..Amazon was represented by Senior Advocates Gopal Subramanium, Gourab Banerji, Amit Sibal and Nakul Dewan. They were instructed by P&A Law Offices, AZB & Partners and Wong Partnership LLP..Future Coupons and the promoter group (together the majority respondents) was represented by Senior Advocate Dayan Krishnan and Senior Counsel Abraham Vergis (Singapore), instructed by Agarwal Law Associates. .Future Retail Limited was represented by King's Counsel Harish N Salve and Senior Advocates Darius Khambata and Ritin Rai. They were instructed by Ameet Naik for Naik, Naik and Company.