India's supreme court issued a long-awaited decision in favour of Amazon in its legal battle with Future Retail today. This is a major blow for Mukesh Ambani's Reliance Retail and Kishore Biyani's Future Group's Rs 24,713 crore deal, which Amazon had challenged in several courts.
The Supreme Court ruled on August 6 that Reliance's $3.4 billion plan to acquire Future Group's retail assets cannot go through. In the legal battle between Jeff Bezos and Mukesh Ambani, the court supported an arbitrator's decision to put the agreement on hold.
The emergency award is enforceable under Indian law, according to the bench of Justices R F Nariman, which upheld a previous Delhi High Court's ruling. The Supreme Court stated, "The emergency award order is an order under Section 17 (1) of the Arbitration Act and can be enforced under Section 17(2) of the Arbitration Act."
The top court had reserved its decision on Amazon's appeals against the FRL-Reliance Retail deal on Thursday.
The agreement has been the subject of a heated legal battle between Amazon.com NV Investment Holdings LLC and FRL, with the US-based firm filing a petition in the Supreme Court claiming that the Singapore Emergency Arbitrator (EA) award restraining FRL from proceeding with the merger was valid and enforceable.
In the previous hearing, senior lawyer Harish Salve, who represented Future Retail, pointed to judgments on the validity and enforcement of arbitral awards and stated that there was no notion of EA under Indian law on arbitration and that there was no arbitration agreement to this effect.
Also Read: Reliance Industries retail business likely to grow three times in next 3-5 years: Report
According to Salve, there is no provision for EA under Indian law, and "it cannot be done through the construction process." Salve made the remark in response to a single-judge order of the Delhi High Court upholding the EA's award as legitimate.
Amazon had previously appealed to the Supreme Court against the Delhi High Court's division bench order approving the Reliance-FRL deal. On February 8, the division bench stayed a single-judge order to FRL and other agencies to maintain the status quo on the deal.
The interim decision was issued in response to FRL's appeal of a single judge's February 2 ruling in favour of the US business, stating that the EA's award was legitimate and enforceable.