India’s Supreme Court halted regulatory clearance for the $3.4 billion asset sale of the Future Company to Reliance Industries Ltd., delaying the agreement to raise Amazon.com Inc., which seeks to scuttle the trade in its attempt to control the country’s retail market.
In accordance with the petition of the US e-commerce giant, the Supreme Court reversed the judgment of the lower court on Monday, noting that the National Corporate Law Tribunal may proceed to hear the case but may not give a final nod until further orders have been given. The court further ordered written comments from Future Retail Ltd. and announced that it would hear the case within three weeks. Future stocks and shares have declined.
“In the meantime, according to the order posted on the court’s website, the NCLT proceedings will be allowed to continue but will not culminate in any final order of sanctioning of the scheme.”
The new decision recovers the legal benefit for Jeff Bezos-founded Amazon, which won an interim stay in the Singapore Arbitration Tribunal in October. It accused the Future Company of breaking a cooperation deal when it decided to sell properties to billionaire Mukesh Ambani’s conglomerate last year. Monday’s order, though, endangers Future Retail, which is unable to cover debts and cautioned against insolvency.
Future Retail’s shares dropped by as much as 10% and its dollar bond maturing in 2025 fell by 3.8 cents on the dollar after the court order on Monday, according to Bloomberg’s collected rates. Reliance Industries has also dropped as much as 2.8%.
Representatives for Amazon India, Potential, and Reliance Sectors have not replied to media inquiries immediately.
The Singapore arbitration tribunal will move Future Retail to lift the temporary stay levied by the emergency arbitrator, which formed the basis of the order of the Indian Supreme Court.