India’s Supreme Court has ruled in favour of Amazon in a decision that could shape the growth of e-commerce in India for years to come.
It upheld an order by a Singapore-based arbitration panel against India’s biggest retailer, Reliance, buying the country’s second biggest retailer, Future Group. The court said the order is enforceable under Indian law. Future Group had challenged the order in a high court in Delhi.
It contended that the deal was crucial to keep the company afloat after the coronavirus pandemic upended business. But the court blocked the deal. An appeal led to a second order which said the deal could proceed. Amazon approached the Supreme Court, whose verdict now stops the deal from going through.
Future Group made a deal to sell $3.4bn (£2.44 bn) worth of retail assets to Reliance Industries earlier this year. Had the deal materialized, it would have given Reliance’s retail arm access to over 1,800 stores in more than 420 cities in India, as well as Future Group’s wholesale business and logistics arm.
Amazon objected to this. Since 2019, the e-commerce giant has owned a 49% stake in Future Coupons, which gives it an indirect ownership stake in Future Retail.
The online shopping giant argued that as a part of that purchase, Future Group is prohibited from selling to a select group of Indian companies, including Reliance.
In October 2020, Amazon won an interim order by Singapore’s Emergency Arbitrator that put the deal on hold.