Amazon is expected to file an appeal with the Supreme Court next week against the National Company Law Appellate Tribunal’s decision to uphold the Competition Commission of India’s December 2021 judgement on non-disclosures by the e-commerce giant.
The NCLAT ruling was a setback for Amazon since, in addition to maintaining the CCI’s penalty of Rs 200 crore, it also upheld the suspension of the 2019 plan to purchase a 49 percent share in Future Coupons (FCPL). CCI approved the acquisition in 2019, however after several parties complained that critical information was not given, CCI placed the agreement on hold. The objections arose in the aftermath of Future Retail’s decision to sell its retail and logistics divisions to Reliance Retail.
Amazon opposed to this deal because it claimed first right of refusal to any sale by FRL in its position as a 49 percent owner in FCPL. “Amazon has failed to provide fair, honest, and transparent disclosures about the 2019 arrangement with Future Group.” “The tribunal concurs with the CCI’s assessment and orders Amazon to deposit Rs 200 crore as a penalty,” the panel said, while agreeing with the CCI that Amazon provided limited disclosures about its acquisition of key rights and interests in Future Retail. The transaction has now collapsed because FRL’s bankers refused to accept it, despite the fact that Reliance Retail had previously taken over about 900 outlets since Future had defaulted on rent payments.
There are still proceedings pending in the Delhi High Court between FRL and Amazon.
The Delhi High Court’s single judge bench, presided over by Justice C Hari Shankar, is already hearing a half-dozen cases, including Amazon’s request to enforce a Singapore tribunal’s order halting the sale of Future Group’s retail assets to Reliance Retail and another to prevent Future Retail from further alienating its assets.
Meanwhile, Amazon has filed an intervention before the National Company Law Tribunal, Mumbai Bench, contesting the Bank of India’s insolvency suit against debt-laden Future Retail, claiming that the banks conspired with FRL and that bankruptcy proceedings at this point would jeopardise its rights. BoI had sought the NCLT in April to collect Rs 1,441 crore from FRL. Banks’ entire exposure to FRL is believed to be at Rs 17,000 crore, a number that might rise to as much as Rs 25,000 crore if loan defaults persist, according to some creditors.