The Delhi High Court has temporarily restrained Future Group from selling its retail assets to Reliance Industries Ltd, an interim win for Amazon which is opposing the deal with an eye to dominate a large and vital consumer market.
The court today ordered the Future Group and officials to ensure the status of the indebted Indian retailer's assets are maintained as is, putting on hold any further steps toward completing the $3.4 billion sale to billionaire Mukesh Ambani's Reliance conglomerate. Amazon alleges that the deal violates its own contract with Future Group and had filed an urgent petition last week seeking the suspension. The order can be challenged in a higher court.
The freeze bolsters the Jeff Bezos-led e-commerce giant, which had also urged the court to jail Future Group's founder and seize its assets for violating an October order from the Singapore arbitration court. The cash-strapped Indian retailer -- it risks bankruptcy if the deal with Reliance fails -- is caught between two of the world's richest men as they compete for dominance in India's estimated $1 trillion consumer retail market.
The court said it was of the prima facie view that the Singapore tribunal order, which asked Future Retail to not proceed with the deal, is enforceable in India.
A Future Group spokesperson declined to comment while Reliance Industries and Amazon India couldn't immediately comment.
The stakes are high. For Amazon's Bezos, who has struggled to gain traction in China where local giants dominate the e-commerce sector, India with a population of 1.3 billion is the only other market of similar size that can boost his company's growth. Blocking Reliance, which is already the country's biggest brick-and-mortar retailer, is key. Acquiring Future's assets will double Reliance's retail footprint -- an advantage Amazon is not willing to cede.
(With inputs from agencies)