Meesho Counters AWS In INR 127 Cr Arbitration

SUMMARY

AWS has alleged that Meesho failed to meet its payment commitments and is seeking compensation for ‘spend shortfall, pending service fees, interest, and arbitration costs’

Meesho has disputed the invoices, alleging ‘deficiencies in the services provided by AWS’ and incurring additional expenses for migrating the job

Meesho has counterclaimed INR 86.49 Cr, citing losses suffered due to disruption of business and inadequate support provided by AWS as well as salary costs incurred during migration

Ecommerce startup Meesho has found itself locked in an INR 127.45 Cr ($14.44 Mn) legal tangle with Amazon Web Services (AWS) India, according to the draft IPO papers it has filed with SEBI.

AWS initiated arbitration proceedings against Meesho before a three-member tribunal in New Delhi under the Arbitration and Conciliation Act 1996, over unpaid invoices related to a private pricing addendum (PPA) signed on February 25, 2022.

Amazon claimed that Meesho had failed to meet its payment commitments under the agreement and sought compensation covering “spend commitment shortfall payment amount, pending service fees, interest on the respective payments and the cost of arbitration”.

Meesho, however, disputed the invoices and complained of “deficiencies in the services provided by AWS”. It has also challenged the enforceability of the minimum commitment provisions under the PPA and the applicability of AWS’s standard online customer terms and conditions.

In fact, the DRHP shows that Meesho has counterclaimed INR 86.49 Cr, citing losses suffered due to disruption of business and inadequate support provided by AWS as well as salary costs incurred during migration from AWS services.

“The PPA contained certain stipulations on spend commitment by the Group in consideration for obtaining the services available on the AWS platform. However, the Group faced stability and scalability issues with various services and despite bringing this to AWS’s attention, AWS was unable to provide adequate support to resolve the issues and was unable to diagnose the underlying cause or provide a solution in relation to these services,” said the IPO papers.

“As such, AWS is in breach of its obligations under the contract and the Group is not liable to pay the commitment invoice to AWS,” accused Meesho.

The DRHP states that the Arbitral Tribunal, through a May 3 order, directed AWS to place the PPA before the collector of stamps for adjudication and stamping. The matter remains pending.

Besides the AWS dispute, Meesho faces overall tax and vendor disputes of over INR 710 Cr as of June 30, 2025. The largest chunk of this comes from an income tax dispute of INR 5,72.0 Cr, while the GST dispute amounts to INR 142.91 Cr and landowner dispute at INR 72 Cr. Vendor litigations stand at INR 1,168.7 Cr, including the AWS arbitration.

The Amazon lawsuit comes at a crucial time for Meesho as it filed its updated DRHP last week for an INR 4,250 Cr public float. The dispute also sheds light on Meesho’s dependency on cloud infrastructure to run its vast value-commerce ecosystem from order fulfilment to payments and recommendation systems.

The company has, however, vowed INR 1,390 Cr from IPO proceeds for strengthening its technology and cloud infrastructure. Other investments from the issue proceeds would include INR 480 Cr in salaries for its machine learning, AI, tech teams and INR 1,020 Cr in marketing and brand initiatives.

Meesho’s operating revenue jumped 23% over the last year to INR 9,389 Cr in FY25, while it stood at INR 2,503.8 Cr in Q1 of FY26.

Its net losses, however, deepened 12 times to INR 3,914.7 Cr in FY25 due to one-time costs tied to its IPO process, like reverse flip tax and perquisite tax. It incurred a reverse flip burden of INR 3,883 Cr. Without these expenses, the loss would have been limited to INR 108 Cr in FY25, said the DRHP.