The Delhi Supreme Court only ruled last week that the sale of $ 3.3 billion of Future Retail should be delayed. While the court noted that its verdict was not final, it said that ‘immediate orders’ were needed to protect Amazon’s rights, and ordered all parties involved in the deal to ‘enforce’ [the] status quo “while deliberating.
This week, however, another bank ruled in the same court that there was no need to cancel the deal after Future Group appealed. The judge has yet to pronounce the final warrant, but for now, Future Retail and Reliance Industries have the upper hand.
Shares of Future Retail are up 10% on Tuesday.
The core of the battle is Future Retail, the cash cow of the Indian conglomerate Future Group. The retail unit includes brands such as Big Bazaar, a popular supermarket chain.
In August 2019, Amazon invested in a Future Group entity which, according to filings on September 30 last year, gave it an approximately 4.8% stake in Future Retail. The deal gave Amazon the right of first refusal to acquire more shares in Future Retail, according to one of the filings.
Amazon argued that the 2019 deal between the company and the Future Group entity included a non-compete clause, a person familiar with Amazon’s thinking told CNN Business in October. The clause listed 30 limited parties that Future Retail and Future Group could not do business with, and Reliance was on that list, the person said.
While the latest move keeps the deal going on Monday, the battle is far from over. The Delhi Supreme Court has yet to make its final decision, which could once again jeopardize Reliance’s and Future’s plans, said Bharat Chugh, a Supreme Court attorney specializing in arbitration law.
Ultimately, the country’s Supreme Court could hear the case should both sides appeal. Future Retail, Reliance and Amazon did not immediately respond to requests for comment.
– CNNs Rishi Iyengar contributed to this report.