A woman shops inside the Big Bazaar retail store in Mumbai.
In a big win for Amazon, the Supreme Court today said Reliance cannot go ahead with a $3.4 billion deal to buy Future Group's retail assets. The deal has locked Mukesh Ambani and Jeff Bezos, rivals for India's online retail, in a huge legal battle.
Here's your 10-point cheatsheet to this big story:
Amazon had taken its partner Future Group to court saying it violated contracts by agreeing to sell retail assets to market leader Reliance Industries last year for Rs 24,731 crore.
The Singapore Emergency Arbitrator in October 2020 restrained Future Retail from going ahead with its merger with Reliance Retail. That decision is valid and enforceable, the Supreme Court said today. The arbitrator has yet to announce a final decision.
Amazon went to the Delhi High Court urging that the arbitrator's decision be enforced. The single judge bench said the deal should be on hold, directed that the assets of Future's Kishore Biyani be seized and asked why he should not face a three-month jail term.
In February, a bigger Delhi High Court bench stayed the single judge order that had effectively blocked the deal. Amazon then approached the Supreme Court, which has now confirmed the High Court single judge's order.
Shares of Reliance and Future Group fell after the order. The Future Group said it would pursue all possible avenues to complete the Reliance deal and "protect the interests of its stakeholders and workforce".
Amazon had argued that it has committed $6.5 billion in investments in India and would face "irreparable harm" if the Supreme Court did not intervene.
The legal fight over Future's assets pits two of the world's richest men - Amazon's Jeff Bezos and Reliance's Mukesh Ambani - as rivals fighting for dominance over India's colossal online retail sector.
Amazon has argued that a 2019 deal it had with a Future unit included clauses saying the Indian group couldn't sell its retail assets to anyone on a "restricted persons" list, including Reliance. Amazon has a 49 per cent stake in Future Coupons Ltd, which holds 9.82 per cent in Future Retail.
Future, India's second-largest retailer with over 1,700 stores, has said it will be pushed towards liquidation if the deal with Reliance falls through.
The acquisition of Future Group, which owns some of India's best-known supermarket brands, such as Big Bazaar, would have strengthened Reliance's presence in the hugely competitive e-commerce sector.
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