An Indian court has temporarily restrained Future Group from selling its retail assets to Reliance Industries, an interim win for Amazon, reported Bloomberg.
The Delhi High Court on Tuesday, February 2, ordered the Future Group and Indian authorities to ensure the status of the indebted Indian retailer’s assets are maintained as is, putting on hold any further steps toward completing the US$3.4 billion sale to billionaire Mukesh Ambani’s Reliance conglomerate. Amazon alleges that the deal violates its own contract with Future Group and had filed an urgent petition last week seeking the suspension. The order can be challenged in a higher court.
The freeze bolsters the Jeff Bezos-led e-commerce giant, which had also urged the court to jail Future Group’s founder and seize its assets for violating an October order from the Singapore arbitration court. The cash-strapped Indian retailer — it risks bankruptcy if the deal with Reliance fails — is caught between two of the world’s richest men as they compete for dominance in India’s estimated US$1 trillion consumer retail market.
The Indian court said it was of the prima facie view that the Singapore tribunal order, which asked Future Retail to not proceed with the deal, is enforceable in India.
Future Retail will “explore all legal remedies and take appropriate steps to pursue the scheme of arrangement,” it stated in a stock exchange filing late Tuesday. Amazon appreciates the court’s order, it wrote in an emailed statement earlier on Tuesday.
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