Amazon moves Supreme Court over $3.4bn Future Group-Reliance deal
Amazon has moved India's Supreme Court to stop a $3.4 billion assets sale by its partner, Future Group, to Reliance Industries. The move comes mere days after the Delhi High Court had revoked a previous interim court order that had effectively blocked the deal in Amazon's favor. The US firm has now filed an appeal against the order in the Supreme Court.
What is the issue with the Future Retail-Reliance deal?
Amazon had bought a 49% stake in one of Future's unlisted firms, Future Coupons, in 2019 with a right to buy into Future Retail for a period ranging from three to 10 years. Future Coupons owns a 7.3% stake in Future Retail. In August, Future Group announced that it would sell its retail, wholesale, and logistics businesses to RIL's retail arm Reliance Retail Ventures.
Amazon claims Future violated its contract
According to Amazon, Future violated its contract with the US firm by agreeing to sell its retail assets to Reliance Industries last year. However, both Future and Reliance have continued to push for the deal as the former denies any wrongdoing.
Singapore arbitrator's decision enforceable in India: Amazon
Amazon argued last October's decision by an arbitrator in Singapore—that had put the deal on hold—is enforceable under Indian laws. The Delhi HC had noted that the "group of companies" doctrine was not applicable. Under the doctrine, a deal signed by one firm in a group is understood to include other firms in the group that have not signed the contract.
Delhi HC revoked previous order favoring Amazon on Monday
Meanwhile, the Delhi High Court had on Monday revoked a previous order by a single-judge bench that had blocked the deal by ordering status quo. The HC had allowed procedures before the Competition Commission of India and the Securities and Exchange Board of India to go ahead. However, the previous order was only an interim one. The next hearing is scheduled for February 26.
Interim order in interest of all parties: Amazon to SC
In its petition, Amazon told the Supreme Court that the interim order pausing the deal was in the interest of all parties till the dispute is resolved. Amazon argued that if Future and Reliance continued with the assets sale, it would be difficult to undo.
