CCI order suspended the approval to the deal between Amazon and Future Coupons
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The National Company Law Appellate Tribunal (NCLAT) did not pass any interim order on Amazon.com Inc.’s plea challenging the Competition Commission of India’s (CCI’s) December order suspending a 2019 approval to a deal with a Future Group company.
Amazon approached the NCLAT on 9 January, challenging the CCI order suspending the approval to the deal between Amazon and Future Coupons Pvt. Ltd. The anti-trust watchdog had also imposed a Rs202 crore fine on Amazon.
The tribunal led by Justice M. Venugopal and V.P. Singh asked the parties to file their replies within 10 days. The tribunal will next hear the case on 2 February.
CCI requested NCLAT not to pass any interim order, informing the tribunal that it was ready to present its argument whenever required.
NCLAT agreed to hear the matter on merits on 2 February, a day before the deadline for Amazon to pay the fine imposed by CCI for allegedly not being upfront about the scope and purpose of the transaction.
The CCI order alleged that Amazon tried to ‘suppress and misrepresent’ the facts of the deal. However, CCI granted time to Amazon to seek approval for the deal.
Gopal Subramanium, a senior lawyer representing Amazon, told the tribunal that Amazon paid the money to buy a stake in Future Coupons and that the assessment for the deal was already done.
Arbitration proceedings were underway at the Singapore International Arbitration Centre after Future Group violated the conditions of the agreement, he said.
The share subscription agreement states that Amazon would invest Rs1,431 crore in Future Coupons Pvt. Ltd, which would be directly transmitted to Future Retail Ltd, the senior lawyer said.
“We have negotiated a call option over the shares held by Future Retail’s promoters, leaving us well-positioned to become the single largest shareholder of Future Retail, which would be difficult through market purchase alone if Indian investment laws change," Subramanium said.
Further, the advocate told the tribunal that Amazon was paying a premium of 25% over the regulatory price of shares of Future Retail just to get a strategic right and call option provided to Amazon.
“While getting the appeal admitted in itself can be considered to be a minor victory for Amazon, it is inconceivable in law that Future Retail would not have been given an opportunity to make their submissions before NCLAT decided on the application. Having said that, considering the urgency involved in the application, we expect NCLAT to hear all stakeholders involved and pass a reasoned order as soon as possible," said Soham Banerjee, an associate at Pioneer Legal.
Meanwhile, the Confederation of All India Traders supported Future Group’s decision to terminate the deal with Amazon and filed a plea with NCLAT on Thursday seeking to be heard by the tribunal. NCLAT has agreed to hear them on the matter on 2 February.
“Although NCLAT has not granted an interim stay, it can still pass a stay order on the next date of the hearing if it feels that the matter cannot be heard to its satisfaction before the date on which Amazon has to pay the fine," said Angad Sandhu, partner, PSL Advocates & Solicitors.
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