In setback for Future Group, Delhi HC rejects new plea
The Delhi High Court on Tuesday dismissed a petition filed by Future Group seeking to quash the arbitration proceedings with Amazon in Singapore. Justice Amit Bansal reportedly said the plea had been rejected. Future, in its petition, had asked the court to quash the proceedings on grounds that the Indian competition watchdog has suspended the 2019 Amazon-Future deal over which the case is based.
Why does this story matter?
The court ruling might be seen as a setback for Future Group. In December, the Competition Commission of India (CCI) had suspended its approval of the Amazon-Future deal. Based on the CCI order, Future Group said the arbitration proceedings should be declared illegal. However, Amazon maintains its transactions with Future are not void as CCI has given it a chance to reapply the deal.
A brief about the controversial deals
Amazon had invested in Future Group in 2019, acquiring a 49% stake in Future Coupons Ltd. Future is notably India's second-largest retailer, with more than 1,700 stores. But in August 2020, Reliance Retail said it would acquire Future's retail, wholesale, logistics, and warehousing businesses. Amazon objected to that deal saying it was in violation of the 2019 agreement with Future.
Singapore arbitrator had ruled in Amazon's favor
A case between Amazon and Future Group is ongoing before the Singapore International Arbitration Center (SIAC). The Singapore arbitrator had earlier ruled in favor of Amazon, terming the Future-Reliance deal as invalid. However, both the parties have since filed several parallel cases in various courts in attempts to overrule the decision taken by the arbitrator.
Amazon given 60 days to reapply by CCI
In December 2021, the CCI suspended its approval for the Amazon-Future deal, saying the American company had made "false and incorrect statements" while seeking the nod. It also imposed a penalty of Rs. 202 crore on the e-commerce giant. Amazon was given a period of 60 days to reapply for approval with "true, correct, and complete" information.