According to THE ET Now TV channel, which first reported the legal opinion, the agreement between Amazon and Future Retail also prevented the Indian company from striking a deal with certain companies. The legal opinion baffled many people in India, as Amazon has reportedly acquired a multibillion-dollar stake in Reliance Retail, India`s largest retail chain, according to previous reports from ET Now and Bloomberg. This communication has no real legal basis. I don`t think it will go to court at all,” another source said. Oct 7 (Reuters) – Amazon.com Inc has sent a legal notice to a promoter of India`s Future Group over the retailer`s deal with Reliance Industries, ET Now reported on Wednesday, citing sources. Amazon`s investment in Future Group came with contractual rights including a right of first refusal and a non-competitive pact, a source here at ET Now said, adding that this was the main reason the legal notice was sent to Future Coupons. Amazon`s legal notice could delay the conclusion of the Future-Reliance agreement. This could have a detrimental effect on future companies in the group, as they have already defaulted more than five times in the last month. Lenders refused to release additional funds for the cash-strapped retail company until the deal with Reliance received all regulatory and legal approvals.

Sources in Future Group hope that the legal dispute with Amazon will be led by Mukesh Ambani for a quick resolution. Amazon has sent a legal notice to Future Group, India`s second-largest retail chain, for breaching the terms of its contract by selling a significant portion of the business to Ambanis Reliance Retail. Global e-commerce giant Amazon has sent a legal opinion to Future Group about its deal with Reliance Retail to sell its retail and wholesale businesses. Amazon reportedly said the deal violated its non-compete clause with Future Group. In August 2019, Amazon acquired a 49% stake in Future Retail`s promoting company, Future Coupons. This agreement gave Amazon an indirect 3.6% stake in Future Retail. Amazon confirmed that it had filed a legal opinion, but did not give details about it because the case is “sub judice”. Reliance Retail and Future Group did not comment. Wednesday midnight (local time), the Future Group had not published the announcement on the stock exchange. Global e-commerce giant Amazon has sent a legal opinion to Future Group, backed by Kishore Biyani, for allegedly violating a non-compete clause in August this year by selling its retail, wholesale, logistics and warehousing business to Reliance Retail. Amazon has sent a legal notice to Future Group, sponsored by Kishore Biyani, about its alleged non-compete violation Industry sources said the legal opinion surprised Future Group.

It`s surprising that Amazon sent a legal opinion nearly two months after the deal was announced. Why didn`t they say anything before? We have evidence of conversations with them. In addition, Amazon cannot acquire a stake in Future Retail until three years after the deal. That was only a year ago. The terms and conditions also state that this is subject to current FDI standards and that current standards do not allow a foreign company to acquire a direct majority stake in an Indian retail company. Therefore, Amazon`s notice has no legal basis, the source said. Amazon cited in its legal notice a contractual agreement that included “a limited list” of companies that Future should not do business with, according to the report. Leading industry sources said the legal opinion had come as a surprise to Future Group since Amazon was first asked to invest before the deal with Reliance. Amazon was also kept informed of the deal, which was only reached after Amazon said it had no objections.

With e-commerce accounting for just 3-7% of total retail sales in India – and Reliance Retail launching its own e-commerce business to fight Amazon and Flipkart – Amazon`s deal with Reliance Retail is seen by many industry analysts as crucial to the future of the US e-commerce company in India. Amazon, which began its journey to India seven years ago, has invested more than $6.5 billion in its local business in the country. Indian shares of Future Retail Ltd fell 9% on Thursday after Amazon.com Inc. sent a legal opinion to Future Group claiming the retailer`s $3.38 billion asset sale to Reliance Industries violated a deal with the e-commerce giant. US e-commerce giant Amazon has sent a legal opinion to Future Group, backed by Kishore Biyani, over its CRO25,000 deal with Reliance Retail. According to the contract signed between Amazon and Future, the sale of the company to competitors (Reliance) is excluded. Amazon claimed in its legal notice that Future Group violated the agreement between the two companies when it struck a deal with Reliance earlier this year. While Amazon and Future Retail declined to comment, sources close to the Biyani family said the legal opinion came as a surprise. “Everything was discussed with Amazon before the signing of the agreement with Reliance.

During all this time, no objections were raised. It is surprising to receive legal advice more than a month after the announcement of the Reliance agreement,” a source close to Future Group said. Future Group declined to comment on the legal notice. TNM has reached out to Amazon for feedback and has not yet heard from them. An Amazon spokesman said it had filed a lawsuit. Future Group did not respond to requests for comment. The announcement follows reports that Future Group is in negotiations with Mukesh Dhirubhai Ambani (Reliance Industries Limited) Group (MDA Group) on the sale of its supply chain and logistics business. When the investment is complete, Reliance Retail will have raised 37,710 CR INR in less than four weeks from global investors such as Silver Lake, KKR, General Atlantic, Mubadala, GIC, TPG and ADIA.

The recent dispute between Amazon and Future Group, first reported by ET, could be resolved through arbitration or court intervention. Biyani had also agreed to certain share transfer restrictions on the company`s promoter shares for the same duration, including restrictions on not transferring shares to specific individuals and, more importantly, a first offer right in favor of Amazon. In August last year, Amazon acquired a 49% stake in Kishore`s Future Coupons Biyani for about 1,500 INR Amazon had acquired a 49% stake in Future Coupons Ltd last year, which holds a 7.3% stake in Future Retail. In August, Mukesh Ambanis Reliance decided to buy Future Group`s retail and other stores. In August, Reliance, led by Mukesh Ambani, announced it would acquire Future`s retail and wholesale businesses, as well as its logistics and warehousing business, in a $3.38 billion transaction, including debt. In recent months, Reliance Retail has attracted investment from several companies, some of which have already invested in Reliance`s digital company Jio Platforms.