RELIANCE BREACHES THE NON-COMPETE CONTRACT – CLAIMS AMAZON

A war for leadership in the field of E-Commerce market in India is seen to be initiated. Amazon Inc. recently served Future Group ltd. with a legal notice for allegedly breaching the non- compete contract due the deal that they signed with Reliance Industries Limited. Amazon then took a further step and approached the Singapore International Arbitration Center (SIAC) in order to prevent the deal between Reliance and Future Group.

Reliance Retail’s acquisition of Future Group is considered to be a significant move towards expanding its retail business through Jio-Mart and becoming a strong competition to leading ecommerce platforms like Amazon and Flipkart.

According to Amazon, it holds a 3.58% stake in Future Retail Limited as it had acquired a 49% stake in the promoter group entity of Future Group’s retail business, Future Coupons. The company further claims that the selling of a significant part of Future Groups business to Reliance is in breach of the terms of their contract. 

The Emergency Arbitrator of SIAC passed an interim injunction award favoring Amazon and stopping Future Group from taking any steps in relation to the transaction with Reliance. The matter was then brought in front of a Single judge bench, Judge Mukta Gupta in Delhi High Court with a prayer of issuing an ad- interim injunction against Amazon.

Initially Harish Salve argued for issuing an order to stop Amazon from interfering, he further submitted that the Emergency award was not recognized hence it is not binding under the Indian law. To this Adv. Subramaniam contended that the award was passed after considering the Indian law, he justified it on the grounds of Sec 2(8) of the Arbitration & Conciliation Act. He even questioned the maintainability of the ongoing suit.

The Hon’ble court questioned the parties on the law in relation to the concept of non-signatories to the arbitration agreement and then adjourned the hearing for the day. 

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