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The Delhi high court on Monday quashed an order that halted Future Group’s 24,713 crore deal to sell its assets to Reliance Industries Ltd, dealing a blow to Amazon.com Inc.’s efforts to block the sale.

A two-judge bench said that Amazon has no reason to stall the deal, and regulatory authorities should not be prevented from discharging their statutory duties, overturning a single-judge ruling last week that put the Future-Reliance deal on hold.

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The latest order comes as a huge relief for the cash-strapped Future Group, which is banking on the deal with Reliance Industries to prevent a potential bankruptcy.

Kishore Biyani’s Future Group has been caught in a fight between the US e-commerce giant and Mukesh Ambani’s Reliance Industries for domination of the Indian retail market that is estimated to reach $1.3 trillion by 2025.

On 2 February, an interim order by a Delhi high court judge had halted Future Group’s sale of its retail, wholesale, logistics and warehousing assets to Reliance Industries.

In a stock exchange filing, Future Retail said: “A division bench has stayed the operation and effect of order passed by the Ld. Single Judge, inter alia, for the prima facie reason that the company is not a party to the shareholders’ agreement dated 22 August 2019 executed between Amazon, Future Coupons Pvt. Ltd (FCPL) and the promoters of FRL (Future Retail Ltd), under which arbitration was initiated by Amazon in Singapore."

A spokesperson for Amazon declined to comment, while a Reliance Industries spokesperson didn’t immediately respond to an email seeking comment.

The single judge had ordered Future Retail to maintain status quo on the assets until “the pronouncement of the reserved order".

The judge had also directed regulatory authorities such as the Securities and Exchange Board of India (Sebi) and the National Company Law Tribunal (NCLT) to maintain status quo on the deal.

Quashing the order, the two-judge bench said it will next hear the matter on 26 February.

The Delhi high court on Monday also observed that Future Retail is not a party to the arbitration agreement between Amazon and Future Coupons Pvt. Ltd.

“Prima facie, there was no reason (for Amazon) to seek a status quo order from the single judge. Statutory authorities can’t be restrained from proceeding in accordance with law," the high court said. “These contentious issues (emergency award enforcement) will be decided after the order is pronounced by the single judge (who had passed the interim order on 2 February)."

The bench also said that Future Retail does not have anything to do with the deal signed between Amazon and Future Coupons Pvt. Ltd.

The court said that different agreements have been signed between the three disputing entities—FRL, Amazon and Future Coupons Pvt. Ltd and, hence, the doctrine of “group of companies" cannot be invoked.

“We hereby stay the implementation and execution of the order passed by the single judge till the next date of hearing," the two-judge bench said.

It said that the dispute as to whether the Singapore International Arbitration Centre’s (SIAC’s) emergency award is enforceable or not will be decided when the single judge gives his order.

Amazon and Walmart-owned Flipkart together control more than 80% of the Indian e-commerce market and have been competing to make inroads into the traditional retail market in India.

On 21 December, a single-judge bench of the Delhi high court allowed the Future-Reliance deal to go through, subject to regulatory approvals.

The order upheld SIAC’s ruling and declined Future’s plea to stop Amazon from approaching regulators to bar the Reliance-Future deal.

The Competition Commission of India approved the deal in November, and Sebi gave its conditional nod last month. Future Retail has already approached the NCLT, Mumbai, for approval of the deal.

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