In a huge win for Amazon and an equally significant setback for Reliance, the Supreme Court on Friday ruled in favour of Amazon’s efforts to halt the Rs 24,713 crore deal between Reliance and the Future Group. The decision adds another chapter to what is promising to become a battle of billionaires that has not been seen before in India’s retail landscape.
A bench of Justices Rohinton F. Nariman and B.R. Gavai held that Reliance cannot go ahead with its deal with the Future Group while upholding an October 2020 decision of a Singapore-based Emergency Arbitrator that barred the two from going forward with the deal.
The Supreme Court’s verdict comes as a setback for Reliance’s retail plans which included a takeover of 1,800 stores of Big Bazaar, EasyDay, FBB and Food Hall to spread its footprint across the country. The firm was also taking over the Rs 19,000 crore of debt and liabilities of the Future Group as part of the deal.
Following the news, Reliance shares were down 2% on the stock markets, even as Future retail shares tanked 10% on worries of a protracted, value-destroying battle.
Last October, a Singapore-based single judge arbitration panel had ruled that Reliance Retail and Future Group should not proceed with the deal until it hears the matter.
Amazon had been referring to a non-compete clause in its transaction with Future Coupons which barred it from any deal with 30 companies, including Reliance Industries.
In its order, the panel had said that the deal between Future and Reliance violated Amazon’s contractual rights.
However, despite the outcome of the arbitration, the Competition Commission of India or CCI had approved the deal in November 2020.
In its response, Amazon had moved the Delhi High Court in January to get the emergency arbitration award recognised in India and a single-judge bench had then stayed the deal. However, soon after, the Future Group moved the Delhi High Court again where a division bench vacated the order passed by the single-judge bench.
It was after this that the e-commerce giant had approached the Supreme Court.
Last month, CCI had accused Amazon of hiding factual aspects and making false submissions about its investment in Future Retail when it sought the watchdog’s approval for the deal in 2019.