In a ruling exactly where each the parties can claim some relief as nicely as disappointment, the Delhi High Court on Monday rejected Future Group’s plea that Amazon be restrained from writing to regulatory authorities not to accord approval to the former’s deal with Reliance Retail. However, the court’s order also stated that the Future-Reliance Retail deal was in accordance with Indian laws, therefore dealing a blow to Amazon’s claim. What can be more damaging to Amazon is that the court also stated that its deal with Future Coupons – prior to Future-Reliance deal – is in the nature of manage and hence expected prior government approval in the absence of which it is in violation of FEMA/FDI guidelines. The basis of Amazon’s complaint relating to the deal with Reliance Retail was its prior deal with Future Coupons exactly where it had veto powers and if that is observed as illegal then it certainly is a setback for the e-commerce firm, legal observers keep.
Amazon, which owns 9.83% equity in Future Retail, when contesting the latter’s deal with Reliance Retail had argued that it has veto energy more than any sale of Future Coupons, in which it owns a 49% stake.
In short, the court has upheld the interim award by Singapore International Arbitration Centre in favour of Amazon as legal. It has also declared the Future-Reliance deal to be legal and left the final choice to the regulatory authorities ahead of which the deal is below examination ahead of a final approval is provided. Legal observers stated that given that the ruling is by a single judge bench, the parties are certain to challenge it ahead of the division bench as the subsequent course of action.
“..both FRL (Future Retail) and Amazon have already made their representations and counter representations to the statutory authorities/regulators and now it is for the statutory authorities/regulators to take a decision thereon.. Consequently, the present application is disposed of, declining the grant of interim injunction as prayed for by FRL, however, the statutory authorities/regulators are directed to take the decision on the applications/objections in accordance with the law,” the court stated.
“On two counts, FRL has been able to make out a prima facie case of tortious interference by Amazon. It is clarified that it is not the making of the representation by Amazon to the statutory authorities or the regulators, which is an actionable wrong but making a representation based on incorrect assertions which makes the act based on unlawful means,” the order stated.
FRL had moved the HC in search of to restrain Amazon from approaching regulatory bodies to stall the Future Group’s transaction with Reliance Retail. Future sold its retail assets to Reliance in August, but Amazon stated the deal breached agreements Future produced with the e-commerce firm in 2019.
Thereafter the US-primarily based enterprise took FRL into an emergency arbitration more than alleged breach of contract. The SIAC on October 25 passed an interim order in favour of Amazon barring FRL from taking any step to dispose of or encumber its assets or issuing any securities to safe any funding from a restricted celebration. Subsequently, Amazon wrote to Sebi, stock exchanges and CCI, urging them to take into consideration the Singapore arbitrator’s interim choice as it is a binding order.
In the meantime, the Competition Commission of India (CCI) has authorized the acquisition of the retail, wholesale, logistics, and warehousing organizations of Future Group by Reliance Retail.
The SIAC has rejected Future Group’s appeal against the interim order and given that December 4 has commenced final hearings in the matter immediately after which it would pass the final order.