The National Company Law Appellate Tribunal (NCLAT) ruled today (June 13) that the Competition Commission of India (CCI) was right in fining e-commerce giant Amazon Rs 202 crore for a deal it made with the Future Retail Group in 2019, ANI reported.
That deal — made with the subsidiary Future Coupons Pvt Ltd — required the Future Group to get Amazon’s approval before being merged with or sold to any other company.
When Reliance Retail announced that they would acquire Future Retail for Rs 24,713 crore in 2020, that provision got triggered, setting off a months long legal fight which was waged in arbitration in Singapore, the Supreme Court of India, and in the Competition Commission as well.
We have reached out to Amazon for comment.
The CCI had ruled that Amazon was liable to pay this fine because it had not notified authorities of the “actual purpose and particulars” of the deal. This is a setback to Amazon’s legal battle to secure a halt on Future Retail’s sale to Reliance, citing its contractual right to a veto on such a transaction.
As recently as this month, Amazon reportedly warned Future’s promoters that proceeding with the transaction would tantamount to ‘fraud’ and ‘malfeasance’. But the CCI’s order striking down this deal may prove a nuisance in pursuing this effort. Reliance is meanwhile leveraging its ownership of many Future’s retail locations to capture the chain’s physical properties, effectively hollowing out the company of it advantages. Amazon’s lawyers have protested this in court as well.
In a newspaper advertisement, Amazon warned that such transfers were a “fraud on the Constitutional Courts in India”. Future’s agreement with Amazon had Mukesh Ambani as a restricted person to deal with, and a Singapore arbitration panel upheld Amazon’s contentions and ordered that the transaction be put on hold.
Future Retail’s lawyers argued that the firm was ‘broke’ and so its properties were being seized for non payment of rent, and that Reliance was acting as an ‘outside’ party in claiming the properties.
