India’s Supreme Court on Friday (Aug. 6) affirmed an emergency arbitrator’s decision, sought by Amazon, preventing the planned sale of the Future retail chain to Reliance Industries.
Future Group, the court ruling notes, is the second-largest brick-and-mortar retailer in India. Reliance Industries is a giant conglomerate in the country.
In its decision, the Supreme Court India noted that the provisions of a 2019 investment deal involving Amazon and Future Retail Limited had language blocking any asset sale of which Amazon did not approve.
The ruling states: “It appears that the basic understanding between the parties was that Amazon’s investment in the retail assets of (Future Retail Limited) would continue to vest in (Future Retail Limited), as a result of which (Future Retail Limited) could not transfer its retail assets without (a company partially owned by Amazon’s) consent, which, in turn, could not be granted unless Amazon had provided its consent.”
The decision follows a lengthy court fight that focused in large part on the authority of emergency arbitrators.
Owners of Future Group approved the sale of the retail stores to Alliance in August 2020. In October of 2020, Amazon sought and won the emergency injunction, temporarily blocking the sale.
Some parties involved in the planned sale declined to adhere to the emergency order and continued to pursue the deal. Amazon sought additional intervention in court and won another temporary order blocking the deal in February.
Read more: Delhi High Court Halts Future’s $3.4 Billion Deal Following Amazon’s Objections
Friday’s decision not only affirmed Amazon’s right to block the Future Group sale, but also affirmed the poer of emergency arbitrators to make temporarily binding decisions in disputes involving businesses.
“In many ways, the ruling provides reassurance that Indian courts would step in and respect the arbitration process,” arbitrator Promod Nair told the Financial Times. “The fact that a foreign investor succeeded in judicial proceedings against Reliance, essentially India’s biggest industrial conglomerate, is a wonderful testament to the neutrality of the Indian judicial system.”
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