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Amazon asks CCI to revoke $3.4-billion Future-RIL deal approval

The e-commerce firm has said the CCI Approval for the Impugned Transaction was "illegally obtained" and is a nullity in the eyes of law

Topics
Amazon | CCI | Future Retail

Peerzada Abrar  |  Bengaluru 

Amazon

US e-commerce giant has written to Ashok Kumar Gupta, chairman of Competition Commission of India (CCI) and other top executives and asked the country’s antitrust regulator to revoke its approval for Future Retail's (FRL) $3.4 billion sale of retail assets to Reliance. said the Approval for the Impugned Transaction was “illegally obtained” and is a nullity in the eyes of law. The letter has also been sent to Finance Minister Nirmala Sitharaman and Rao Inderjit Singh,Minister of State, Ministry of Corporate Affairs.

In Aug 2019, acquired a 49 per cent stake in Future Coupons, the promoter entity of Future Retail, for about Rs 1,500 crore. Amazon is now fighting a legal battle with FRL to stop the Kishore Biyani-led retailer’s $3.4 billion deal with Limited (RIL).

“We are writing to you in respect of the EA Order restraining FRL, FCPL and the Biyanis from taking any steps in relation to, in furtherance or in aid of, the Impugned Transaction,” said Amazon’s letter dated November 24 and seen by Business Standard. “We also write to you in furtherance of the Letter dated October 29, 2020, and the Letter dated November 25, 2020, addressed to the Hon’ble Commission for taking cognizance of the EA Order and recalling the Approval for the Impugned Transaction.”

Amazon said that FRL precipitated approval of the Impugned Transaction from the Hon’ble Commission in violation of the binding directions contained in the EA (emergency arbitrator) Order. Consequently, the Approval for the Impugned Transaction in violation of the EA Order has no legal basis and constitutes a nullity.

On October 25, 2020, an emergency arbitrator constituted under the Rules of the Singapore International Arbitration Centre, 2016, passed the EA Order containing the directions against FRL, FCPL and the Biyanis. This included that the respondents are injuncted from taking any steps in furtherance or in aid of the Board Resolution made by the Board of Directors of FRL on 29 August 2020 in relation to the Disputed Transaction. It said without prejudice to the rights of any current Promoter Lenders, the Respondents are injuncted from directly or indirectly taking any steps to transfer/dispose/alienate/encumber FRL’s Retail Assets.

The letter said in spite of the binding directions contained in the EA Order, FRL continued to pursue the approval for the Impugned Transaction by terming the EA Order a “nullity”. The FRL Letter was thus issued in direct contravention of the EA Order, in a brazen attempt to subvert the rule of law. “Pursuant to such contumacious conduct, FRL misled the Hon’ble Commission, and precipitated the grant of the CCI Approval for the Impugned Transaction,” alleged the letter.

On September 9, 2021, the Hon’ble Supreme Court stayed the Enforcement Proceedings initiated by Amazon before the Hon’ble Delhi High Court in anticipation of orders to be passed by the Arbitral Tribunal on FRL’s Vacate Application. The Hon’ble Supreme Court did not stay the Enforcement Judgment or any of the directions contained in the EA Order.

Amazon said the directions contained in the EA Order have thus continued to bind and operate against FRL from October 25, 2020, and have now been re-affirmed by the Arbitral Tribunal. It said FRL’s pursuit of the approval for the Impugned Transaction before the Hon’ble Commission was in clear breach of the directions in the EA Order.

“The CCI Approval for the Impugned Transaction was thus illegally obtained and is a nullity in the eyes of law,” alleged the letter. “We request you to act in aid of the binding injunctions operating against FRL, FCPL and the Biyanis, in terms of the EA Order and the Order on Vacate Application and recall the CCI Approval for the Impugned Transaction forthwith. We are also requesting for a personal hearing to apprise the Hon’ble Commission of these material factual developments which demonstrate that the CCI Approval for the Impugned Transaction is a nullity in the eyes of law.”

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First Published: Mon, November 29 2021. 01:41 IST
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