American e-commerce giant Amazon has moved the Supreme Court, challenging a National Company Law Appellate Tribunal (NCLAT) order upholding the Competition Commission of India’s decision to suspend approval for a 2019 investment deal with a Future group firm.
In June this year, NCLAT agreed with the competition watchdog’s findings that Amazon did not make full and necessary disclosure about its strategic interest in its deal with Future group's Future Coupons Pvt Ltd (FCPL). The CCI in December 2021 kept its approval for the deal in abeyance.
Keeping approval in abeyance essentially means that the approval is suspended not quashed.
Amazon has consistently claimed that all material information and facts were placed on record while seeking CCI approval.
Both CCI and NCLAT, however, found that Amazon and failed to disclose its intention and interest in Future group's retail business under its public listed company Future Retail Ltd (FRL).
The issue relates to Amazon's 2019 investment deal with FCPL which stipulated, among other things, that the Kishore Biyani-led group shall not engage in any business with certain restricted entities. This list included Reliance Industries.
In 2020, FRL announced an asset sale deal with Reliance Industries' wholly owned subsidiary Reliance Retail, which set off a series of litigation. Amazon moved the Singapore International Arbitration Centre (SIAC), claiming a breach of contract by Future group.
In 2021, some directors of the Future group companies filed a plea before the CCI seeking a recall of its approval to the 2019 deal with Amazon, claiming that American company did not reveal its real intention and interest in the retail business.
The plea was backed by the Confederation of All India Traders (CAIT). The case culminated with the CCI keeping the approval in abeyance in December 2021.
Separately, the Future group and Amazon are embroiled in a legal battle before the Delhi High Court and arbitration proceedings before the SIAC.
An insolvency court in Mumbai has admitted Future Retail for corporate insolvency resolution under the Insolvency and Bankruptcy Code, while the asset sale deal between Future Retail and Reliance Retail stands cancelled.Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.