The court rejected Future Retail Ltd’s (FRL) plea for an interim injunction to restrain Amazon from writing to Sebi, the Competition Commission and other authorities about the SIAC arbitral order against the proposed Rs 24,713 crore deal with Reliance Retail.
Justice Mukta Gupta said while FRL has made out a prima facie case of interim injunction, the relief cannot be granted as the balance of convenience lies in favour of both FRL and Amazon, and whether any irreparable loss would be caused to either side, has to be determined during trial of the suit or by a competent forum.
Another reason why it did not grant an interim injunction was that both FRL and Amazon have already made their representations and counter representations to the statutory authorities or regulators and “now it is for the statutory authorities/ regulators to take a decision thereon”, the court said.
Against this backdrop, the Confederation of All India Traders (CAIT) Secretary General Praveen Khandelwal in a statement claimed the judgement vindicates the stand taken by CAIT since a long time that Amazon is openly violating the government’s FDI policy.
Referring to the judgement, the traders’ body said it “reinforces Amazon’s blatant conduct and an urgent need for the Enforcement Directorate and other statutory authorities to take corrective measures so as to prevent Amazon from abusing the laws of the land for its benefit”.
The “manipulative, coercive, arbitrary and dictatorial policies of Amazon” to control and dominate the retail trade of India through e-commerce should come to an end now.
“The findings by the High Court that Amazon has violated provisions of the FEMA rules vindicate CAIT’s consistent efforts to highlight the habitual violations of those rules by major e-commerce players like Amazon,” the statement claimed.
In August 2019, Amazon bought 49 per cent stake in one of Kishore Biyani-led Future Group’s unlisted — Future Copouns Ltd (FCL) — with the right to buy into the listed flagship FRL after a few years, if the government were to undo its bar on foreign ownership of multi-brand retailers.
Earlier this year, Future Group cut a deal with Reliance Industries Ltd (RIL) to sell assets for Rs 24,713 crore. Then, Amazon dragged Future to arbitration at SIAC claiming that its contract with the unlisted FCL barred a transaction with a number of persons and companies, including Reliance.
On October 25, the Singapore International Arbitration Centre (SIAC) passed an interim order in favour of Amazon barring FRL from taking any step to dispose of or encumber its assets or issue any securities to secure any funding from a restricted party.