January 15, 2022 3:23:13 am
The National Company Law Appellate Tribunal (NCLAT) has agreed to hear Amazon’s plea challenging the Competition Commission of India’s (CCI) decision to suspend the company’s 2019 deal with Future Coupons. The NCLAT, on Thursday, while rejecting Amazon’s plea to put on hold CCI’s decision, asked both the regulator and Future Coupons to file their reply within the next 10 days.
Why does Amazon want the NCLAT to set aside the CCI decision on Future Coupons deal?
A primary argument that Amazon pleaded before the NCLAT was that since the deal with Future Coupons was signed in 2019, the CCI could not have gone back more than 12 months to review and subsequently suspend the deal. The counsel for Amazon also questioned how the competition regulator could have revisited its own order allowing the deal almost after two years.
In its December 17 order staying the Amazon deal with Future Coupons, the CCI had also asked Amazon to seek a fresh approval for the deal by filing out the Form II. Amazon also took exception to this demand by the CCI and said that since the deal with Future Coupons was strategic, the regulator could not have reviewed the entire deal. “Form II is given when there is an activity. Here the investment was, in the event of the policy of the government of India changes or you obtain the government approval, there was a certain call option. Because we have referred it (deal) as strategic, the commission takes a view to reviewing the entire matter,” counsel for Amazon Gopal Subramaniam said.
Why did the CCI stay Amazon’s deal with Future Coupons two years after approving it?
In its December order suspending the deal, the CCI had said that Amazon had “misled” the regulator about its intentions regarding its investment in Future Coupons. In its order, the CCI had said that Amazon had “misled the Commission to believe, through false statements and material omissions, that the combination and its purpose were the interest of Amazon in the business of FCPL” . The regulator added Amazon had suppressed “the purpose of establishing strategic alignment and partnership between Amazon Group and FRL (Future Retail Ltd) as well as have a ‘foot-in-the-door’ in the India retail sector.”
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What will happen next in the Amazon-Future Coupons legal tussle?
So far, both Amazon and Future Group have filed more than a dozen cases against each other in various forums, such as the Delhi High Court, the National Company Law Appellate Tribunal and the Supreme Court. Apart from this, both these companies are also engaged in arbitration at the Singapore International Arbitration Centre (SIAC).
On the next hearing in the NCLAT on February 2, Amazon will try to prove why the CCI could not have revisited its earlier order when it had granted its approval for the deal, while Future is likely to argue that since the deal has now been suspended, the NCLAT should not entertain the plea.
Apart from the NCLAT, Amazon and Future Group are also battling the case out in the Supreme Court, where the Future Group has challenged the Delhi High Court’s refusal to grant stay on an arbitration tribunal decision refusing to interfere with the Emergency Award (EA) of the SIAC.
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