Small Damages, Big Message: Amazon’s Legal Win Sends a Signal

Following nearly five years of court proceedings, Amazon has triumphed in a significant—if partial—victory in its months-long struggle with Future Group over the collapse of a $3.4 billion agreement with Reliance Retail. The Singapore International Arbitration Centre (SIAC) ruled Future Group violated its agreement with Amazon by approving the sale of assets to Reliance in 2020.

 

Key Highlights:

 

The Background: Amazon acquired a 49% holding in Future Coupons in 2019 for ₹1,431 crore. Amazon acquired indirect control over Future Retail virtually. The deal came with a rider, which prohibited Future from selling assets to specific competitors—Reliance being one such group.

The Breach: Future Group, with increasing losses and debt from the pandemic, divested its retail, logistics, and warehousing business to Reliance in 2020. Amazon objected, invoking its contractual veto rights.
 

The Verdict: SIAC ruled that Future Group had breached its agreement with Amazon. But Amazon received only ₹23.7 crore as damages—far less than the ₹1,436 crore it had sought. The tribunal also granted ₹77 crore worth of legal costs.
 

Why Low Damages?
The court noted that even if the deal had been fulfilled, Amazon likely would have been unable to recover its whole investment since Future Retail's finances were deteriorating.

 

What's Next?

 

While the court affirms the legal reasoning of Amazon, its financial consequence is nil. The case also reflects the growing importance of international arbitration in Indian business litigation.

 

Sources: ETtech, Bar & Bench, MSN News