American e-commerce giant Amazon sought $40 million from Future Retail in exchange for the Future Group and Reliance Industries going ahead with the “disputed transaction”, the Indian retailer told the Singapore International Arbitration Centre (SIAC).
"In August 2020, over two phone calls ... Abhijeet Mazumdar on behalf of the claimant... asked for $40 million as compensation in exchange for the Future Group and Reliance proceeding with the disputed transaction," a document submitted by the Future Group to the arbitrator in late 2020 said. Moneycontrol has reviewed a copy of the document that came to light recently.
Mazumdar is the head of private investment and corporate development at Amazon. He joined the e-commerce company in 2014 after spending more than five years at the venture capital firm Bessemer Venture Partners.
Amazon and Future Group are locked in a legal dispute over the sale of the Indian company’s retail, logistics and warehousing assets to Reliance Retail Ventures (RRVL), a unit of Reliance Industries, for Rs 24,713 crore. The Future group agreed to the sale in August 2020.
Saying that Amazon was well aware that it was in talks with Reliance since August, Future also told SIAC that Amazon's claims that it did not have any information about the transaction were incorrect.
Amazon, which owns a 49 percent stake in Future Coupons, an unlisted company, has challenged the Future Group-Reliance Retail deal, claiming it did not consent to such a transaction. It said the deal breached some existing agreements.
The Kishore Biyani-owned Future Group has reiterated that it made a public announcement of the transaction on August 29, 2020. "This event also received widespread media coverage. So, leaving aside the messages, calls and emails, the claimant was aware of the disputed transaction for more than a month before it initiated the present arbitration proceedings," it said.
Following the development, Amazon has issued an official statement saying the claims made by the Future Group are false and misleading.
"Amazon denies the false and misleading claims being made by the Future Group on a purported request for compensation to forego the right of first refusal. This is a questionable and an ill-timed attempt to mislead the public at large more particularly when Amazon has filed a special leave petition in the Supreme Court. Amazon has consistently offered to assist FRL during the economic downturn caused by COVID and reiterated our openness for a dialogue even during the Delhi High Court hearings, which was declined by Future Group," said the e-commerce giant spokesperson.
Further, according to the interim order passed by the emergency arbitrator in October, the e-commerce company had said the promoters of the Future Group chose to enter into the “disputed transaction” without providing Amazon the details of the "Reliance/MDA Group offer."
SIAC in its interim order in October had also noted that on June 30, 2020, when Amit Agarwal, Senior Vice President and Country Manager, Amazon India, sent a media article reporting a potential transaction with Reliance to Rakesh Biyani and raised concerns, he dismissed the report saying nothing had been concluded.
Rakesh is the managing director of Future Retail and a cousin of Kishore Biyani.
Amazon approached SIAC in October. The company and the Future Group had an agreement that in case of a dispute they would approach SIAC.
It's fairly common to have a foreign-seated arbitrator when one or more foreign parties are involved in a contract. SIAC is popular in India, given its reputation of being efficient and a convenient forum for international commercial arbitrations, sources say.
Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
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