A conflict has played out before several judicial forums over the fate of Future Retail, a company in grave health with creditors and two of the world’s richest men entangled in its fate. Freny Patel reports

Update: Banks can now initiate insolvency proceedings against Future Retail after the Mumbai-bench of the National Company Law Tribunal (NCLT) on 20 July admitted Bank of India’s plea under the insolvency and bankruptcy code. The NCLT has dismissed Amazon’s petition seeking intervention and said that the US e-commerce major is not a stakeholder and “does not have any locus standi”.

L enders to the beleaguered Future Group are in a tight spot after a tug-of-war between two of the world’s richest men – Mukesh Ambani and Jeff Bezos – took on a new twist in April this year. The e-commerce giant Amazon complicated Future’s insolvency proceedings that were initiated by lead lender the Bank of India (BoI), and filed an intervention application.

With outstanding loans of more than INR100 billion (USD1.2 billion), Future Retail had decided to sell its retail, warehousing and logistics businesses to Reliance Retail for INR247.13 billion and pay off lenders.

But the valuation of Kishore Biyani’s Future Retail has been dissipating due to the pandemic and also to Reliance Industries backing out of the proposed USD3.33 billion acquisition after its hostile takeover of about 1,000 Future Group stores. Now, lenders’ hopes of recovering even a small percentage of their INR100 billion exposure to the cash-strapped retailer hangs by a thread as Future Retail has few assets or businesses left.

Adding fuel to the fire, Amazon filed an intervention application, challenging the insolvency proceedings on grounds that the lenders had colluded with Future Retail, and that the bankruptcy proceedings would compromise its rights.

In March 2022, the BoI issued a public notice claiming a charge over Future Retail’s moveable fixed assets and current assets including receivables, stock, spares, inventories and cash flows.

Lenders led by the BoI approached the National Company Law Tribunal (NCLT) and initiated insolvency proceedings against the beleaguered retailer in an attempt to recover their dues. The consortium of lenders including lead banker the BoI, Andhra Bank, Axis Bank, Bank of Baroda, Central Bank of India, Corporation Bank, Punjab National Bank, and Union Bank of India await the NCLT’s verdict on maintaining Amazon’s intervention application.


Amazon complicated the insolvency proceedings by alleging that the banks and Future Group had colluded, and that the initiation of the insolvency was a facade to dilute its rights. “This is malicious intent with which the Bank of India has filed the petition,” the lawyer for Amazon, Zal Andhyarujina, argued before the NCLT bench, urging judge Pradeep Narhari Deshmukh to dispose of the petition and impose a penalty.

Amazon’s intervention application will test India’s insolvency proceedings. Generally, third parties do not have any rights or say in the debt recovery procedure, and their applications are rejected.

“The intervention application against the initiation of corporate insolvency of Future Retail, if decided in Amazon’s favour, may completely void the insolvency of Future Retail,” Link Legal’s New Delhi-based partner, Ketan Mukhija, tells India Business Law Journal. “The US e-commerce major may try to showcase that with its investment of around INR15 billion in Future Coupons/Future Retail, the debts may be settled in due course, post obtaining approval from the antitrust watchdog, for its stake in Future Coupons.”

Mukhija says any intervention application filed by a financial creditor to avoid insolvency proceedings is largely based on two grounds. First, where the debt or loan has become time-barred and therefore unenforceable, having a limitation of three years; and second, where the settlement has been arrived at leaving no dues to proceed with under the insolvency proceedings.

You must be a subscribersubscribersubscribersubscriber to read this content, please subscribesubscribesubscribesubscribe today.

For group subscribers, please click here to access.
Interested in group subscription? Please contact us.