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In a setback to the $3.4 billion Future-Reliance deal, India’s Supreme Court has halted the regulatory approval, crucial for the deal to go through, handling a legal win to Jeff Bezos led Amazon.com Inc. ALSO READ | Future-RIL Deal In Limbo After High Court Backs Amazon, Authorities Asked To Maintain ‘Status Quo’
The order led Future Retail shares to dip 5% to Rs 71, while Reliance Industries shares were trading down 2.57% at Rs 2027 in a weak Mumbai market on Monday.
Hearing American e-commerce giant’s petition, the Supreme Court on Monday overturned the Delhi High Court order that allowed the deal to go through.
The deal has already got approval from India’s competition watchdog, the Competition Commission of India (CCI), and is now at National Company Law Tribunal (NCLT) for its approval.
The Supreme Court noted that the company tribunal can continue hearing the case but must not give a final nod till further orders. When asked for comments, Ashish K Singh, Managing Partner, Capstone Legal, told ABP News Network, “The SC hearing on a petition filed by Amazon has barred the NCLT from issuing any orders in the $3.4 billion deal between Reliance Industries and Future Group. This has further deepened the legal dispute between Amazon and Future Group.”
Amazon, which wants to scuttle the transaction in its bid to control the country’s retail sector, moved the SC early this month against the Delhi High order.
The apex court also sought written statements from Future Retail, which argues that it will have to face liquidation if the deal collapses.
The case will come up for further hearing after five weeks. Amazon.com alleges that Future violated a partnership contract to sell its assets to its rival Mukesh Ambani-led Reliance Retail, as Amazon bought a 49% stake in Future’s holding firm last year, with the right to buy into Future Retail Ltd. after a few years.
The legal battle is seen as a tussle between two of the world’s richest men—Jeff Bezos and Mukesh Ambani—to dominate India’s estimated $1 trillion retail markets and test foreign investor patience.
ALSO READ | Amazon Vs Future FRL Deal: Delhi HC Lifts ‘Status Quo’ Order Against Future Retail-Reliance Deal
Facing cash crunch due to COVID-19, Future cut a deal with Reliance last year, infuriating Amazon. Jeff Bezos-led e-tailer accuses Future and its founder Kishore Biyani of flouting the Singapore arbitration court’s interim order in October, which halted the sale of assets.
However, Delhi High Court allowed the asset sale last week, following which Amazon moved to India’s Supreme Court against the order. Now, India’s apex court order restores advantage for Amazon.com and a setback for the Kishore Biyani led Future Group and Mukesh Ambani’s Reliance Retail.
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