Setback For Amazon; Delhi HC Lifts Stay On Reliance-Future Group Deal

SUMMARY

The HC has stayed the status quo on Future Group’s deal with Reliance

It said SEBI and CCI cannot be restrained from giving approval to the deal

A single-judge Delhi HC bench that awarded Amazon the status quo earlier is yet to give its final order

After scoring a minor win at the Delhi HC last week, Amazon will now have to deal with a major hurdle as a two-judge bench of the same court has stayed the status quo on Future Group’s deal with Reliance Retail.

While the matter is set to come up in the court again later this month, the court noted that authorities like markets regulator Securities and Exchanges Board of India (SEBI) and the Competition Commission of India (CCI) could not be restrained from “proceeding in accordance with law”.

But that’s not the last decision in the case as a single-judge bench that earlier awarded Amazon the status quo order is also yet to give its final order. Last week, the Delhi high court granted interim relief to the US ecommerce giant and ordered regulatory authorities to maintain the status quo until a detailed interim order is delivered.

The bench of Justice JR Midha noted that the emergency award (EA) from the Singapore International Arbitration Centre that Amazon had received in October was enforceable.

In court yesterday, the Future Group argued that Amazon’s indirect stake in Future Retail through Future Coupons is not adequate enough for the company to procure Future Retail, which is why Amazon’s opposition holds no water.

“The bench comprising Chief Justice D N Patel and Justice Jyoti Singh, has stayed the operation and effect of order passed by single judge, for the prima facie reason that the company is not a party to the shareholders agreement dated August 22, 2019, executed between Amazon, Future Coupons and the promoters of Future Retail, under which arbitration was initiated by Amazon in Singapore,” Future Group said in a BSE filing.

The $3.4 Bn Reliance Retail-Future Group deal has been in the balance ever since the US-based tech giant raised a petition in the Singapore International Arbitration Centre (SIAC) last year in October. Amazon owns 49% stake in the promoter-entity of Future Retail called Future Coupons through which it also acquired 3.58% stake in Future Retail.