The Delhi high court permitted Future Retail Ltd (FRL) to proceed with the sale of its assets to a unit of Reliance Industries Ltd (RIL), leaving it to regulators to decide the fate of the deal, while allowing Amazon.com Inc. to approach appropriate forums to oppose the transaction.
In its ruling on Monday, a single-judge bench of the Delhi high court said the ₹24,713-crore transaction between Future Group and Reliance Retail Ventures Ltd did not violate any statutory legal provisions, and both parties were free to seek approval for the deal from regulators.
The ruling, which can be challenged in a higher court, shifts the spotlight to the Securities and Exchange Board of India (Sebi) and the ministry of corporate affairs where Amazon is challenging the deal. The Competition Commission of India, the third regulator, cleared the transaction in November.
Neerav Merchant, Partner at Majmudar & Partners recently spoke to finance publication, Mint on the final ruling and its implications.
In his words, “It is important to know how the concerned parties have perceived the interim award, which was obtained by Amazon in October 2020, because, FRL seems to be going ahead with the deal, despite the SIAC interim award. This raises a pertinent question, i.e., how would the concerned litigants (in the present case) react, had such interim award been pronounced by an arbitral tribunal seated in India. The very fact that Amazon (and FRL) have, in connection with this matter, approached the regulators or authorities in the past; hence, not much is left in terms of injuncting Amazon against. The honorable court would have also factored in this fact, among the other reasons it provided for not injuncting Amazon.”
Read the full ruling here.