Delhi High Court Halts Future’s $3.4 Billion Deal Following Amazon’s Objections

The High Court of Delhi in India has suspended Reliance Industries’ $3.4 billion deal to acquire Future Group’s retail assets following objections by Amazon that the deal violated contractual agreements, Reuters reported Tuesday (Feb. 2).

Amazon alleged that the deal violates its own contract with Future Group, Reuters reported. The eCommerce giant filed a petition asking the court to suspend the deal. Future maintained that it did nothing wrong and has the option of challenging the order in a higher court.

With over 1,700 stores, Future is India’s second-largest retailer. It had planned to sell its retail businesses to Reliance and has said it could face liquidation if the deal doesn’t happen, according to Reuters.

Amazon said its 2019 deal with a unit of Future had verbiage that prohibited selling to anyone on a “restricted persons” list, including Reliance, Reuters reported.

Two of the world’s richest men — Amazon’s Jeff Bezos and Reliance’s Mukesh Ambani — are leading the battle between the two powerhouse firms. The outcome could be a turning point in Amazon’s drive to topple Reliance’s dominance in the country.

Justice J. R. Midha ruled Tuesday that an immediate order is important to “protect the U.S. company’s rights,” per Reuters.

“This court is of the clear view that the (arbitration) order … is enforceable,” Midha added, according to Reuters. “All the concerned authorities are directed to maintain status quo.”

Midha directed a government counsel to relay the court’s decision to all authorities who are involved in reviewing the Future-Reliance deal. Future had acted “in violation” of the arbitrator’s order, he added.

In January, Amazon asked that Future’s founder, Kishore Biyani, be sent to prison and his assets seized. Amazon owns a 49 percent stake in Future Coupons, which owns a 7.3 percent stake in Future Retail.

Also last month, the Securities and Exchange Board of India gave the green light to Reliance’s $3.4 billion acquisition of Future Group’s retail assets.