Amazon has filed an appeal in the Indian Supreme Court against its Mumbai-based partner Future Group to avoid the sale of Future’s $3.4 billion retail assets to Amazon’s business rival, Reliance Industries.
Amazon says that in 2019 contracts in which the US e-commerce giant purchased a 49 percent stake in Future Group’s promoter company Future Coupons Ltd., Future Group has breached non-compete clauses.
The agreement also had clauses against selling the properties of the Indian company to those on a list of “restricted persons,” which included Reliance Industries.
The Future Group claims, among other things, that it has not violated any terms as it merely sold its properties and has not transferred any stake to Reliance.Amazon is appealing an order of the Delhi High Court Division Bench at the Supreme Court that had stayed the execution of an earlier order granting Amazon interim relief. The order for interim relief was issued by Justice Midha’s single-judge bench of the same court, directing all parties and the authorities concerned to preserve the status quo until a comprehensive order for interim relief was issued. The Division Bench held, however, that there was no justification for the status quo order and that it was not possible for regulatory bodies such as the Securities and Exchange Board of India (SEBI) and the Competition Commission of India (CCI) to be stopped from ‘complying with the rule.’
Amazon contends that “illegal,” “arbitrary” and without jurisdiction is the Division Bench order. It further argues that if the Division Bench order is not retained by the top court, the business will face “irreparable harm.”
Although the CCI approved the “acquisition of retail, wholesale, logistics, & warehousing companies” arrangement between Reliance and Future Group in November, Amazon won an injunctive award at the Singapore International Arbitration Centre by an emergency arbitrator.
Future Group, which is India’s second largest retailer, has stated that if the agreement with Reliance Industries falls through, it will be at risk of liquidation. In India’s consumer retail industry, both Reliance and Amazon are giants. In the pandemic-hit e-commerce market, the final outcome of this litigation is expected to have a major effect on competition.