Amazon last month asked Future Group to withdraw its applications, which accuse the US company of flouting foreign investment and Foreign Exchange Management Act (FEMA) rules by misrepresenting facts, from the Competition Commission of India, said people familiar with the matter.
This withdrawal was meant to be a prelude to a possible out of court settlement over the dispute that has arisen between the two companies over the proposed sale of Future's retail assets to Reliance Retail.
In a meeting held about a month ago between executives from both companies, people familiar with the matter said Amazon had also asked Future Group for a generous compensation in return for withdrawing its objections to the Reliance deal. The six-hour meeting was attended by Future Group's founder Kishore Biyani and other officials, while Amazon India's legal head Rakesh Bakshi and other executives represented the US giant.
However, the meeting was inconclusive as Future was not ready to accept pre-conditions for a settlement process without seeing a definitive agreement, said the people mentioned above.
An Amazon spokesperson said any claims suggesting a demand for compensation are misplaced and motivated.
Complaints by FCL, FRL
"Amazon's objections are based on breach of contract and specific performance of the contract. Any claims suggesting a demand for compensation are misplaced and motivated. We have consistently offered to help FRL even during the pendency of arbitration proceedings before various courts and this should not be construed as offer for settlement. Amazon has also written to independent directors to communicate the same. Amazon is still willing to help FRL via meaningful engagement and discussions," said the spokesperson.
Future Group did not respond to an email query seeking comment on the development.
Independent directors of the listed making similar allegations of misrepresentation and foreign direct investment (FDI) and FEMA violations against Amazon.
In March this year, Future Group promoter firm Future Coupons Pvt Ltd (FCPL) had complained to the CCI that Amazon had allegedly concealed information and misrepresented facts while seeking the competition watchdog's approval for its ₹1,431 crore investment to purchase a 49% stake in FCPL in 2019. FCPL owns about 10% of Future Retail Ltd (FRL), the flagship entity that runs Big Bazaar, Food Bazaar and Easyday chains.
FCPL accused Amazon of flouting India's FDI and FEMA rules by misrepresenting facts to the commission.
It said that Amazon told CCI that it was investing in FCPL due to its compelling business proposition as well as the growth potential of its business. But in "contradictory" statements to the Singapore International Arbitration Centre (SIAC) and to Indian courts Amazon subsequently said that through its FCPL shareholding it has "strategic rights" over FRL and the listed company with its nationwide network of retail stores represent a "irreplaceable strategic asset" to Amazon.
CCI had subsequently issued a showcause notice to Amazon
Last week, the Delhi High Court ordered the CCI to dispose of FCPL's March plea in two weeks. ET had reported in October that Future Group and Amazon were considering an out-of-court settlement over the dispute that has arisen over the ₹25,000 crore deal between Future Group and Reliance Retail that was signed last year
Amazon is objecting to the deal on the grounds that its investment in FCPL made it mandatory for FRL to take its consent before parting with any of its assets. Amazon has said that in its agreement with Future, Reliance Retail was specifically named as one of the entities to whom the Indian retailer could not sell its assets.
In October 2020, Amazon approached SIAC and obtained a stay on the Future-Reliance deal from the emergency arbitrator. The order was followed by a slew of petitions and counter-petitions between Amazon and Future Group in the Delhi High Court and in the Supreme Court.
In August, the Supreme Court ruled that the SIAC emergency order is valid and enforceable in India, handing out a major victory in the case to Amazon.
Meanwhile, the arbitration matter continues at the SIAC and the centre is expected to give a final ruling early next year.
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