Indian Supreme Court has stopped regulatory approval for Future Group’s $3.4 billion asset sale to billionaire Mukesh Ambani’s Reliance Industries, halting the deal for now and handing a legal win to American eCommerce giant Amazon.
Agreeing with Amazon’s petition, the top court overturned a lower court’s ruling and said the company tribunal can continue hearing the case but must not give a final nod till further orders. The court also sought written statements from Future Retail and said it will hear the case after five weeks.
The latest verdict restores the legal advantage for Jeff Bezos-founded Amazon that secured an interim stay on the deal from a Singapore arbitration tribunal in October last year. It accused the Future Group of violating a partnership contract when it agreed to sell assets to the conglomerate of India’s richest man. The latest order, however, endangers Future Retail, which is struggling to pay debt and has warned of insolvency.
Future Retail can move the Singapore arbitration tribunal to lift the interim stay the emergency arbitrator had imposed, that has formed the basis of Indian Supreme Court’s order.
The cash strapped Indian retailer, which says it would collapse if the deal with Reliance fail, is caught between two of the world’s richest men as they compete for dominance in India’s estimated $1 trillion consumer retail market. The legal dispute over Future has turned into a fierce legal battle across courtrooms in two countries. Amazon is unwilling to give any competitive advantage to Reliance in the only billion-people-plus market left in the world after the American firm lost out to local rivals in China.
The case is also keenly watched by investors as it gives an idea about the validity of emergency decisions by foreign arbitrators in India. The verdict comes at a time when Amazon is increasing its footprint in the country. The US firm announced this month that it was setting up manufacturing operations in the South Asian country.