New Delhi: In a big win for Amazon, the Supreme Court today said Reliance cannot go ahead with its $3.4 billion deal to buy Future Groups retail assets. The court backed an arbitrators decision to pause the deal in the Jeff Bezos Vs Mukesh Ambani legal fight.
Here’s your 10-point cheatsheet to this big story:
- Amazon had taken its partner Future Group to court saying it violated contracts by agreeing to sell retail assets to market leader Reliance Industries last year for ₹ 24,731 crore.
- The Singapore Emergency Arbitrator in October 2020 restrained Future Retail from going ahead with its merger with Reliance Retail. That decision is valid and enforceable, the Supreme Court said today.
- The three-member arbitration tribunal has heard the case and has yet to announce a final decision on the Reliance-Future deal.
- Amazon went to the Delhi High Court urging that the arbitrator’s decision be enforced. The single judge bench ordered a status quo, directed that the assets of Future’s Kishore Biyani be seized and asked why he should not face a three-month jail term.
- In February, a bigger Delhi High Court bench stayed the single judge order that had effectively blocked the deal. Amazon then approached the Supreme Court.
- Amazon argued that the Delhi High Court’s order was “illegal” and “arbitrary” and the company, which has committed $6.5 billion in investments in India, would face “irreparable harm” if the Supreme Court did not intervene.
- The legal fight over Future’s assets pits two of the world’s richest men – Amazon’s Jeff Bezos and Reliance’s Mukesh Ambani – as rivals fighting for dominance over India’s colossal retail sector.
- Amazon has argued that a 2019 deal it had with a Future unit included clauses saying the Indian group couldn’t sell its retail assets to anyone on a “restricted persons” list, including Reliance. Amazon has a 49 per cent stake in Future Coupons Ltd, which holds 9.82 per cent in Future Retail.
- Future, India’s second-largest retailer with over 1,700 stores, has said it will be pushed towards liquidation if the deal with Reliance falls through.
- Amazon, on the other hand, has been accused by India’s antitrust regulator of concealing facts and making false claims when it sought approval for its 2019 investment in Future, news agency Reuters reported last month.