The High Court of Delhi on Monday dismissed a plea from India’s Future Group that sought to restrain US partner Amazon.com Inc from interfering in its $3.4 billion asset sale to Reliance Industries Ltd.
Future sold its retail assets to oil-to-clothes conglomerate Reliance in August but Amazon said the deal breached agreements Future made with the US ecommerce leader in 2019.
The deal cleared anti-trust hurdles last month and if it goes ahead will delay Amazon’s goal of capturing India’s massive groceries market estimated to be worth around $740 billion a year by 2024, according to Forrester Research.
“The present application is disposed of …” the High Court of Delhi said in its written order. “However, the Statutory Authorities/Regulators are directed to take the decision on the applications/objections in accordance with the law.”
Justice Mukta Gupta noted in the verdict that Amazon cannot be barred from writing to regulators on account of potentially irreparable damage.
Amazon did not immediately respond to email seeking comment while Future Group said in an exchange filing that they are in process of reviewing the verdict and would submit a brief summary after consultation with legal advisors.
Reliance and Future dominate India’s grocery market, with the next competitor, Avenue Supermarts Ltd’s DMart, far behind in terms of stores and reach.
“Even if money-wise Amazon can invest as much as Reliance, you will need still time to build the infrastructure on ground,” said Satish Meena, senior forecast analyst and team lead at Forrester, of Amazon’s grocery ambitions in the country.
“That is something that Amazon will need to do from scratch or acquire or tie-up with other Indian grocery or retailers.”
Future argued that an injunction to stop the asset sale won by Amazon from a Singapore arbitrator that the sides had agreed to use in case of dispute, was not binding, prompting Amazon to lodge a complaint with India’s market regulator.
Future is widely credited as transforming India’s retail sector in recent decades. However, the COVID-19 pandemic hit the business so hard that founder Kishore Biyani sought a buyer.
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