Amazon has asked the Supreme Court to pause the CCI review of Future Coupons deal, Future Retail employees have asked the court to allow the Reliance deal to proceed, and the court itself has deferred the hearing in the case to December 8 after registering its discontent that both companies are “filing truckload of volumes.” Here’s a round-up of all the recent updates on the Amazon vs Future Group case.
In November 2019, Amazon received approval to acquire a 49 percent equity in Future Coupons, the promoter entity of Future Retail, which operates 900 stores in India. Since Future Coupons owned a 7.3 percent stake in Future Retail, the deal gave Amazon a 3.58 percent stake in Future Retail. Then, in August 2020, Reliance announced that it will buy most of Future Group’s retail, wholesale, and logistics business in a deal worth Rs 24,713 crore. Amazon objected to this acquisition saying it had the right of first refusal because of its stake in Future Coupons. Both Amazon and Future have been engaged in a legal battle over this issue since October 2020.
- Supreme Court: On August 6, the Supreme Court ruled in favour of Amazon and halted the Reliance–Future Retail deal. The court held that the emergency arbitrator’s award obtained by Amazon in Singapore can be legally enforced in India. Later in the month, Future Group filed a fresh legal challenge in Supreme Court against Amazon. On September 9, the court stayed all Delhi HC orders in the case and asked SEBI, CCI, and NCLT to not pass any final orders regarding the Reliance–Future deal for four weeks.
- Singapore arbitration court: On October 21, a Singapore arbitration court ruled that Future Retail is a party to the agreements signed between Amazon and Future Coupons and must participate in the arbitration process, which was set to begin sometime this month, but hasn’t yet.
- Competition Commission of India (CCI): Following up on a complaint filed by Future Group, CCI in a letter dated June 4 accused Amazon of concealing facts and making false submissions when it sought approval for the Future Coupons investment and asked the company for an explanation. Making the same accusation, Future Retail independent directors this month sent a letter to the CCI and asked it to revoke the approval. The Confederation of All India Traders (CAIT) followed up a day later with a letter of its own to CCI and on November 15 filed public interest litigation at the Delhi High Court asking for an intervention. The Delhi High Court on November 16 ordered CCI to rule on revoking the approval given to Amazon’s investment in Future Coupons within two weeks.
What has happened since then?
- CCI says it will issue an order in due course, Amazon asks Supreme Court to pause the CCI review: According to Reuters, Amazon has filed a petition with the Supreme Court asking it to pause CCI’s expedited review of the Future Coupons deal. This news comes after CCI and Amazon had a closed-door meeting on November 24 in which the e-commerce company’s lawyers declined to explain their position on the matter stating that they had asked the court to pause the process, Reuters reported. CCI meanwhile noted in an internal document that it will not give extensions to Amazon to explain its position and will issue an order on the matter in due course. CCI’s decision on this could have significant ramifications because if it revokes the approval given to Amazon, it renders the company’s right of first refusal to the Reliance—Future deal ineffective, which could theoretically allow Reliance to go ahead with its acquisition of Future Group.
- Future Retail employees ask for clearance of deal: Employees of Future Retail on November 20 filed a petition with the Supreme Court asking it to allow the Reliance deal to proceed because their livelihoods are at stake if the deal doesn’t happen, Reuters reported. Future “will be pushed into liquidation, resulting in its 27,000 employees losing their livelihoods. The families of employees will be on the streets,” the FRL Employee Welfare Association said in its filing, according to Reuters.
- Supreme Court defers hearing: The Supreme Court on November 23 deferred the hearing in Amazon–Future case to December 8. While deferring, the judges noted their discontent at the “truckload of volumes” submitted by both the companies and asked if it was to drag on the case or harass the judges. The companies are now expected to submit a shorter compilation of documents relevant to the case.
- Amazon asks Future Retail to withdraw the CCI complaint: The Economics Times on November 23 reported that Amazon has asked Future Group to withdraw its complaint from CCI in order to pursue an out-of-the-court settlement. Sources told ET that Amazon is considering withdrawing from the battle in lieu of compensation. The company, however, said: “Any claims suggesting a demand for compensation are misplaced and motivated.”
A complete timeline of events
November 2019: Amazon received approval from the Competition Commission of India (CCI) to acquire a 49 percent equity in Future Coupons, the promoter entity of Future Retail, which operates 900 stores in India, including 293 Big Bazaar stores. Since Future Coupons owned a 7.3 percent stake in Future Retail, the deal gave Amazon a 3.58 percent stake in Future Retail.
August 2020 – Reliance Industries announced it will buy most of Future Group’s retail, wholesale, and logistics business in a deal worth Rs 24,713 crore.
October 7, 2020 – Amazon accused Future Group of breach of contract and slapped it with a legal notice over the Future-Reliance deal. Amazon reportedly had a non-compete-like pact and right of first refusal against deals with competitors like Reliance Retail.
October 25, 2020 – Amazon obtained an injunction order against the Future-Reliance deal from an emergency arbitrator appointed by the Singapore International Arbitration Center (SIAC).
November 2, 2020 – Future Group urged stock exchanges to ignore Amazon’s objections to the Reliance deal saying that the emergency stay on the transaction obtained by Amazon from the Singapore arbitration court had no legal force in India. Amazon later accused Future Group of misleading shareholders and insider trading.
November 7, 2020 – Future Group moves Delhi High Court against Amazon interfering in the acquisition by Reliance arguing that Amazon’s agreements were with the various promoters of Future Retail and not Future Retail itself.
November 20, 2020 – Despite Amazon’s protest, the Competition Commission of India approved Reliance Retail’s ₹24,713 crore acquisition of Future Group’s retail, wholesale, logistics, and warehousing businesses.
December 21, 2020 – The Delhi High Court said that while it wouldn’t stop the Future-Reliance deal from happening, the court wouldn’t interfere with regulators making their own assessment of the legality of the deal.
January 20, 2021 – The Securities and Exchange Board of India (SEBI) gave its conditional approval for the Future-Reliance deal.
March 18, 2021 – A single judge from Delhi High Court upheld the emergency arbitration order obtained in Singapore against Future Group, putting on hold the Future-Reliance deal. The judge upheld that the purchase violated an agreement that was signed between Amazon and Future Coupons, an investor company in Future Retail Limited. The court observed that the Future Group had agreed to give Amazon a veto on transactions like the Reliance Retail acquisition, but failed to hold good to that commitment. The high court also attached the properties of Future Group and its promoters Kishore and Rakesh Biyani and ruled that the company must deposit Rs 20 lakh into the PM-CARES fund, and that company executives must respond on why they shouldn’t be jailed.
March 22, 2021 – A division bench of the Delhi High Court stayed the March 18 order. Amazon appeals to the Supreme Court against this stay order.
July 12 – 17, 2021 – The Singapore International Arbitration Centre (SIAC) helda week-long hearing on Future Retails’ appeal to the validity of the emergency arbitrator’s order.
July 21, 2021 – The Supreme Court began hearing arguments from Future Retail and Amazon.
July 23, 2021 – CCI in a letter dated June 4 accused Amazon of concealing facts and making false submissions in 2019 when it sought approval for an investment in Future Coupons.
August 6, 2021 – The Supreme Court ruled in favor of Amazon by accepting its appeal against the Delhi HC order dated March 22, which let the deal between Reliance and Future Retail proceed. The court held that the emergency arbitrator’s award obtained by Amazon in Singapore can be legally enforced in India.
August 12, 2021 – Future Group filed a Special Leave Petition in the Supreme Court against the March 18 order of Delhi HC, which is yet to come up for hearing. An SLP can be filed against orders which are otherwise non-appealable.
August 17, 2021 – Amazon wrote to the Securities and Exchange Board of India (SEBI) asking the market regulator to withdraw the conditional approval it has given to the Future – Reliance deal.
August 18, 2021 – The Delhi High Court told Future Group that, unless it gets a stay order from the Supreme Court by September 17, the court will implement its single-judge order issued on March 18 restraining the sale of Future Retail to Reliance and attaching its properties
August 28, 2021 – Future Group files a fresh legal challenge in Supreme Court against Amazon.
September 9, 2021 – The Supreme Court stayed all Delhi HC orders in the Amazon vs Future case and asked SEBI, CCI, and NCLT to not pass any final orders regarding the Reliance–Future deal for four weeks.
September 28, 2021 – The National Company Law Tribunal allowed Future Group to convene meetings of its shareholders and creditors for approval of its deal with Reliance. The tribunal refused Amazon’s application opposing this.
October 1, 2021 – Reliance extended the deadline to complete the acquisition of Future to March 21, 2022.
October 11, 2021 – Future group firms have convened shareholder and creditor meetings on November 10 and 11 to seek approval to merge the 19 different firms that Reliance is buying into a single entity, Future Enterprises, the Economic Times reported. The firms that have convened meetings include Future Retail, Future Consumer, Future Lifestyle Fashions, Future Markets Networks, and Future Supply Chain Solutions.
October 21, 2021 – SIAC ruled Future Retail is party to the agreements signed between Amazon and Future Coupons and must participate in the arbitration process. Separately, Amazon approaches the Supreme Court seeking an order to stop Future Group companies from convening meetings with their shareholders to seek approval for the Reliance deal.
October 29, 2021 – Delhi High Court declined Future Group’s plea for stay on the arbitration tribunal order.
November 7, 2021 – The independent directors of Future Retail sent a letter to CCI asking the antitrust watchdog to revoke the approval given to Amazon’s acquisition of Future Coupons in 2019. A day later, the Confederation of All India Traders (CAIT) sends its own letter to CCI reiterating the same.
November 9, 2021 – Future Group approached the Supreme Court challenging the Delhi High Court order dated October 29 with a fresh plea to stay the Singapore arbitration tribunal’s October 21 order.
November 11, 2021 – The Supreme Court moved the hearing on Future’s appeal against the Singapore arbitrator’s order to November 23 and asked Future Group not to pursue the case at any other forum.
November 16, 2021 – In response to a petition filed by the Confederation of All India Traders (CAIT) on November 15, the Delhi High Court on November 16 ordered CCI to rule on revoking the approval given to Amazon’s investment in Future Coupons within two weeks.
November 20, 2021 – Employees of Future Retail filed a petition with the Supreme Court asking it to allow the Reliance deal to proceed because their livelihoods are at stake if the deal doesn’t happen.
November 23, 2021 – The Supreme Court deferred the hearing in the case to December 8.
November 24, 2021 – CCI and Amazon hold a closed-door meeting in which the e-commerce company’s lawyers declined to explain their position on the matter stating that they have asked the Supreme Court to pause the process. Reuters reported that Amazon has filed a petition with the Supreme Court asking it to pause CCI’s expedited review of the Future Coupons deal, but the data of the filing is not clear.
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