Amazon.com Inc got a major victory in India’s top court in relation to a dispute wherein the e-commerce giant sought to prevent its partner Future Group from selling $3.4 billion in assets to Amazon’s rival Reliance Industries.
According to analysts, this latest tussle that also involves two of the richest individuals of the world – Amazon’s Jeff Bezos and Reliance’s Mukesh Ambani, is critical in shaping of the pandemic-hit shopping sector of India and in finalizing whether it would be possible for Amazon to stop the dominance of Reliance in the nearly trillion-dollar retail market of the country.
The Future Group deal has seen Amazon and Future getting locked in legal battles in which the United States based Amazon accused the Indian group of breaching pre-existing contracts at the time of selling its assets to Reliance. Accusations have been denied by the Future group.
Validity of an interim decision by a Singapore arbitrator in October in which the Singapore arbitrator ordered putting the deal on hold based on merit in Amazon’s objections was reaffirmed by a two-judge bench of the Supreme Court of India.
While Amazon had claimed that order was binding, Future had argued it was not. At the time when Amazon invested $200 million in a unit of Future in 2019, both the companies had decided to agree to use the Singapore arbitrator in case of disputes.
The arbitration proceedings are still ongoing.
It had been “advised that it has remedies available in law, which it will exercise,” Future Retail said in a statement. No details of the legal options were provided by the company. It however said that it will take up measures to conclude the deal and protect the interests of its stakeholders and workforce.
It welcomed the court’s ruling, Amazon said in a statement, and added: “We hope that this will hasten a resolution of this dispute with Future Group.”
No comments from Reliance were available on the issue.
The retail and e-commerce sector in India is strictly regulated which has caused difficulties for foreign retail giants such as Walmart and Amazon to execute strategies for rapid expansion in the country which currently has one of the fastest growing consumer markets in the world and where brick-and-mortar retailers dominate the retail landscape.
In a previous statement, Future had said the company would be pushed towards liquidation if the deal failed which would impact livelihoods of 50,000 employees and 6,000 small- and medium-sized vendors.
In October, the arbitrator said “economic hardship alone is not a legal ground for disregarding legal obligations”.
According to a lawyer involved in the case in Singapore, an arbitration panel is still being attempted to be convinced by Future to freverse the October interim decision that blocked the deal. That decision is expected in coming weeks.
“Everything is clear for Amazon, it is a big win for them. It’s for the arbitration panel to decide now,” said the lawyer, who declined to be identified, claimed reports.
(Adapted from Business-Standard.com)