This is for the first time in India that two years after an approval has been granted and FDI has come in, the order has been kept in abeyance: Amazon Counsel
The power to keep an order in abeyance is a matter of positive law which the regulator has not been granted under the Competition Act, 2002: Amazon
The NCLAT bench will continue hearing the case on February 28
Ecommerce giant Amazon on Friday (Feb 25) argued before the NCLAT that the Competition Commission of India (CCI) does not have the power to suspend its own orders or revisit prior approvals.
This came as the appellate tribunal began hearing Amazon’s plea against CCI decision that revoked the 2019 approval for the transaction between Amazon and Future Group.
The NCLAT bench will continue hearing the case on February 28. While listing the matter for Monday, NCLAT also said that it would try to commence daily hearings in the matter.
Senior counsel, Gopal Subramaniam, arguing for Amazon, said that, “This is a serious matter. This is for the first time in India that two years after an approval has been granted and FDI has come in, the order has been kept in abeyance.”
He also added that the jurisdiction and statutory authority of CCI were in question in the appeal filed by Amazon.
Further, Amazon counsel argued that the power to keep an order in abeyance is a matter of positive law which the regulator has not been granted under the Competition Act, 2002.
Subramaniam was quoted by Bloomberg Quint as saying that, ”…positive law is never implied and has to be by way of legislative prescription. A power of abeyance cannot be read without legislative prescription. Even if one presumes that the regulator has the power to suspend, it can be exercised only under specific conditions.”
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Subramaniam also told the NCLAT that there was no suppression of information by Amazon.
In December last year, CCI had revoked its approval for the 2019 deal between Amazon and Future Coupons Private Limited (FCPL). The antitrust watchdog had also levied a fine of INR 200 Cr on the etailer citing withholding of information by Amazon before seeking approvals.
The Amazon counsel also said that CCI had passed the order despite knowing that Amazon and FCPL were locked in an arbitration process at Singapore International Arbitration Centre.
The Genesis Of the Tussle
In 2019, Amazon acquired a 49% stake in Future Coupons—a promoter entity of Future Retail. The deal was okayed by the CCI but it is where the drama began.
The relationship quickly soured as Amazon sought arbitration in 2020 after Future Group announced its asset sale deal with Reliance Retail. Future Retail, in return, claimed that it was not bound by the deal between Amazon and Future Retail’s promoter firm.
The asset sale deal was itself stayed by an Arbitrator in October of 2020 and this order was later affirmed by the Supreme Court in August last year. Amidst this legal war, FCPL moved CCI accusing Amazon of suppressing information leading to the December 2021 order of CCI.
Meanwhile, Amazon has claimed that it followed due diligence while securing the CCI approval for the 2019 deal. On the other hand, Future group has sought quashing of its arbitration proceedings with Amazon and has approached the Delhi High Court for the same. Incidentally, the Delhi HC will also hear the matter on Monday.
Earlier this week, Apex Court sought fast-tracking of proceedings at the NCLAT and set aside three Delhi High Court orders that restrained Future Retail’s merger deal with Reliance Retail.
The Confederation of All India Traders(CAIT) has also come out in support of Future Group, backing their decision to terminate the deal with Amazon.
All in all, there seems to be no end to this saga. The cases seem to be piling up and no resolution seems to be in sight, even though all this while, it is business as usual in India.