Business: Supreme Court of India says that a decision by a Singapore arbitrator in October—that put the Reliance-Future deal on hold after finding merit in Amazon’s objections—was valid and applicable in India.
New Delhi: India’s top court on Friday handed Amazon.com Inc a major victory in a dispute where it sought to block its partner Future Group from selling $3.4 billion in assets to rival Reliance Industries.
The outcome of the tussle involving two of the world’s richest men, Amazon’s Jeff Bezos and Reliance’s Mukesh Ambani, is seen reshaping India’s pandemic-hit shopping sector and deciding if Amazon can blunt Reliance’s dominance of the country’s nearly trillion-dollar retail market.
Amazon and Future have been locked in legal battles over the Future Group deal, with the U.S. firm accusing the Indian group of violating pre-existing contracts when it sold its assets to Reliance. Future has denied any wrongdoing.
A two-judge bench of the Supreme Court said that an interim decision by a Singapore arbitrator in October – that put the deal on hold after finding merit in Amazon’s objections – was valid and enforceable in India.
Amazon had argued that the order is binding, while Future had argued it was not. Both sides had agreed to use the Singapore arbitrator in case of disputes when Amazon invested $200 million in a unit of Future in 2019. The arbitration proceedings are still ongoing.
Shares in Future Retail were up 6% ahead of the ruling, but tanked 10% and hit a lower-circuit breaker in Mumbai trading after the order. Reliance Industries fell as much as 2.3%.
Future Retail said in a statement it had been “advised that it has remedies available in law, which it will exercise.” It did not elaborate on the legal options but said it will take steps to conclude the deal and protect the interests of its stakeholders and workforce.
Amazon said in a statement that it welcomed the court’s ruling, adding: “We hope that this will hasten a resolution of this dispute with Future Group.”
Reliance did not respond to a request for comment.
India strictly regulates its retail and e-commerce sector. That has made it difficult for foreign giants like Walmart and Amazon to rapidly expand in one of the world’s fastest-growing consumer markets, whose retail landscape is dominated by brick-and-mortar retailers.
News Source: Economic Times
