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The Delhi High Court had ruled only last week that the $3.3 billion sale of Future Retail should be put on hold. While the court noted that its judgment was not yet final, it said “immediate orders” were necessary to protect Amazon’s rights, and ordered all parties involved in the deal to “maintain [the] status quo” while it deliberated.
This week, though, another bench on the same court ruled that stalling the deal wasn’t necessary after Future Group appealed. The judge has yet to pronounce the final order but for the time being Future Retail and Reliance Industries have the upper hand.
Shares of Future Retail jumped 10% on Tuesday.
At the heart of the fight is Future Retail, the cash cow of 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 that gave it a roughly 4.8% stake in Future Retail as of September 30 last year, according to securities filings. 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 struck between it and the Future Group entity included a non-compete clause, a person familiar with Amazon’s thinking told CNN Business last October. The clause listed 30 restricted parties with which Future Retail and Future Group could not do business, and Reliance was on that list, the person said.
While the latest move Monday allows the deal to go forward, the battle is far from over. The Delhi High Court still needs to deliver its final decision, which could jeopardize Reliance and Future’s plans once more, according to Bharat Chugh, a Supreme Court lawyer who specializes in arbitration law.
Ultimately, the country’s Supreme Court could hear the case, should either side appeal. Future Retail, Reliance and Amazon did not immediately respond to requests for comment.
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