Home / Companies / News /  Amazon moves SC against NCLAT order backing CCI

Amazon on Friday challenged the National Company Law Appellate Tribunal’s ruling that upheld the Competition Commission of India’s observations that the e-commerce giant had misled the trust regulator on its 2019 deal with the Future Group.

The Supreme Court is expected to list the matter for next week, a person privy to the development said.

On 13 June, NCLAT said Amazon had failed to make fair, frank and forthright disclosures related to the deal, and upheld CCI’s order for alleged non-disclosures by Amazon, directing it to deposit a penalty of 200 crore within 45 days.

The tribunal was in complete agreement with CCI that Amazon had furnished limited disclosures pertaining to its acquisition of strategic rights and interests in Future Retail Ltd.

In January, Amazon Holdings NV had moved the NCLAT against the CCI order where the trust authority had put approval for the Amazon-Future Coupons deal in abeyance.

The anti-trust watchdog said in its order that Amazon was fined for misrepresenting and suppressing information while seeking regulatory clearances in 2019 to buy a stake in Future Coupons. According to CCI, the necessity of disclosing these significant facts was critical for the commission to understand the commercial and economic dimensions of the merger and determine an appropriate framework for assessing the matter.

“If a party conceals/suppresses and/or misrepresents to the commission the scope and purpose of the combination and obtains approval, the same would effectively amount to approval/consent been obtained by way of ‘fraud’. Such breach of trust of the commission, established under the Act for the benevolent purpose of promoting and sustaining competition in markets in India, manifests a deliberate disregard to the trust-based regulatory mechanism provided under the Act," CCI said.

The misleading submissions, false statements, omissions, and suppression of material particulars, facts, and documents discussed have denied and disabled the commission from assessing the effects of the actual combination, with a particular focus on the actual intended objectives, it added.

“Condonation of such lapses would effectively mean that a notifying party could disclose its legal contracts in a distorted and elongated manner of its convenience and engage in suppressions and misrepresentations of the actual scope and purpose of the Combination", the CCI said.

The move followed a Delhi High Court judgment on 5 January suspending Amazon’s arbitration proceedings in a Singapore court against its estranged partner, Future Group, for alleged contract violations.

The legal tussle between the Future Group and Amazon is over the sale of the retail assets of Future to Mukesh Ambani-led Reliance Industries Ltd.

The proposed deal worth 24,713 crore was signed between Future and Reliance in August 2020. RIL, however, called off the deal in April 2022 after failing to get necessary approvals from Future’s lenders.

The deal was opposed by Amazon on the grounds that its investment of 1,400 crore in Future Coupons, one of promoters of Future Retail, allowed it block the proposed asset sale to one of its competitors. Subsequently, Future Group moved the CCI to revoke the approval for the deal. Currently, the National Company Law Tribuna (NCLT) has admitted insolvency petitions filed by the Bank of India against Future Retail for default in payments.

Amazon had filed an intervention application before the Mumbai bench of the NCLT to restrict the banks from disposing Future Group’s assets. The tribunal however, rejected Amazon’s petition, calling it baseless.

ABOUT THE AUTHOR

Priyanka Gawande

Priyanka Gawande is a senior legal correspondent at Mint. She has worked as legal reporter for four years with both television and digital mediums. Based in Mumbai, she reports on disputes across sectors including banking, corporates and finance. This also includes insolvency and bankruptcy cases and intellectual property rights (IPR) litigation. Her focus also comprises tracking capital markets and disputes relating to securities law. Previously, Priyanka worked with Informist Media for 2.5 years covering major insolvency and bankruptcy cases and corporate developments. She started her career in journalism with Business Television India (BTVi) where she reported on primary markets, banking, finance and insurance companies.
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