Amazon is likely to move the Supreme Court next week against the order of the National Company Law Appellate Tribunal which recently upheld the Competition Commission of India’s December 2021 order regarding non-disclosure by the big business of e-commerce.
The NCLAT order dealt a blow to Amazon as apart from upholding the Rs 200 crore fine imposed by the ICC, it also upheld its suspension of the 2019 deal to acquire a 49% stake in Future Coupons (FCPL). Approval of the deal was granted by CCI in 2019, but after complaints from some parties that certain information was withheld, CCI suspended the deal. The complaints had come after Future Retail’s decision to sell its retail and logistics business to Reliance Retail. This transaction was contested by Amazon because it claimed the first right of refusal of any sale by FRL in its capacity as a 49% stakeholder in FCPL.
“Amazon failed to make fair, frank and direct disclosures regarding the 2019 deal with Future Group. The court agrees with the TCC’s view and thus orders Amazon to deposit Rs 200 crore as penalty,” the court said, while fully agreeing with the TCC that Amazon had provided limited information about its acquisition of strategic rights and interests in Future Retail.
The deal has now fallen through because FRL lenders did not approve it as Reliance Retail had already taken over around 900 stores because Future defaulted on rent payments.
Still, there are cases in the Delhi High Court between FRL and Amazon regarding the matter.
The Delhi High Court Single Judge Bench of Judge C Hari Shankar is already hearing half a dozen cases, including Amazon’s plea seeking enforcement of a Singapore court order halting the sale of Future Group’s retail assets to Reliance Retail and another to prevent Future Retail from further disposing of its assets.
Meanwhile, Amazon has also filed its intervention in the National Company Law Tribunal, Mumbai Bench opposing Bank of India’s insolvency petition against indebted Future Retail on the grounds that the banks colluded with FRL and that bankruptcy proceedings at this stage would compromise his rights.
BoI had in April approached the NCLT to recover the Rs 1,441 crore debt from FRL. The banks’ total exposure to the FRL is estimated at around Rs 17,000 crore, a figure that could rise to Rs 25,000 crore if defaults continue, some creditors had argued earlier.