Amazon- Reliance Case:

Salient features:

 The Future Group had in August 2020 entered into an agreement with Reliance Retail, a
subsidiary of Reliance Industries, to sell its retail, wholesale, logistics and warehousing
business for nearly Rs 26,000 crore. As a part of the deal, Future Retail is supposed to sell its
supermarket chain Big Bazaar and sister chain of retail outlets like Brand Factory, Home
Town, Central, eZone and others to Reliance Retail. Future Group said that it is facing
immense pressure from its lenders to manage the debt. The lenders include State Bank of
India. The lockdown only added stress to the company's financial health. In a bid to manage
this debt, the Future Group signed this deal with Reliance. Prior to signing this deal, the
Future Group had been wooing several businesses.

 Back in August 2019, the Future Retail had signed another deal with Amazon. As a part of
this deal, Amazon had acquired 49 per cent stake in Future Coupons -- a promoter group
entity of Future Retail.

At the time of the deal, according to Amazon, it had set a condition for Future Group not to
sell its assets to a list of companies which included Mukesh Ambani's Reliance Industries.
Going by this contention, the deal between Reliance and Future is invalid.

 Amazon then challenged this deal and initiated an arbitration process at Singapore
International Arbitration Centre (SIAC). Amazon argued that Biyani's asset sale to Reliance
Retail is a breach of a 2019 agreement between Amazon and Future. The SIAC ruled in favor
of Amazon and put the Reliance-Future deal on hold.

Current situation of deal between Future group and Reliance:

According to Emergency Arbitral order, the deal is neither null and void nor approved. Initially
the case was in high court, and the high court also agreed with Emergency arbitral order. Then
Amazon took the case Supreme Court, and is also accepted Emergency Arbitrary order.

Issue of Contract Law:

It is the agreement between two parties creating mutual obligations enforceable by law. To
make the contract legally enforceable, there must be mutual understanding of two parties,
there must be a valid offer and acceptance, and there must be capacity and legality.
  Future group was in a contract with Amazon and according to that Future group can’t
sell its share to any company. Future Group agreed to that contract but after
sometimes, Future group made another contract with Reliance to sell its retail,
wholesale, logistics and warehousing, which was not acceptable, because Future group
break the contract rule which it had made with Amazon before.
 When Future group was in a contract with Reliance industries, before that ‘Future
coupon’ a part of future group was in a contract with Amazon. The contract between
Future group and Reliance was against the rule of future coupon and Amazon.
 Amazon and Future group took the case to Singapore International Arbitration centre.
Then SIAC issued an emergency Arbitral order to hold the case.
 There is another issue in the case which was done by Future group and that is, it broke
the rule of the contract.
 Reliance industries made a contract with future group, because it wasn’t aware about
Future group’s other contract which has already made with Amazon.
 Also the High Court agreed with Amazon’s allegation and also the high court also said
the contract made between Future group and Reliance is not null and void.
As Reliance was not aware of Future group’s contract with Amazon and as Future group broke
the rule of their contract, therefore, both Reliance and Amazon were right at their respective
places.