AMERICAN e-commerce giant Amazon on Friday (6) got a major legal victory as the Supreme Court of India blocked a deal worth $3.4 billion struck by its domestic rival Reliance.
Amazon, Reliance and Walmart-backed Flipkart are locked in a massive battle to dominate the country’s huge online retail market.
In 2020, Reliance, owned by richest Asian Mukesh Ambani, struck a deal to buy assets of Future Retail, India’s second-largest supermarket chain owned by Kishore Biyani’s Future Group.
The acquisition of Future Group, which owns some of the county’s best-known supermarket brands, such as Big Bazaar, would have made Reliance’s presence in the hugely competitive e-commerce sector stronger.
But Amazon, which owned a stake in one of Future Group’s firms that reportedly had an option to buy into the flagship firm, said the Reliance deal led to a breach of contract, AFP reported.
Last year, Amazon approached the Singapore International Arbitration Centre, which put the Reliance deal on hold. The US firm said the arbitrator’s order was binding but Future contested its claim. On Friday, the apex court of India backed the order saying it was valid.
There was immediate reaction from either Reliance or Amazon, AFP said.
The US giant, which is owned by the world’s richest man Jeff Bezos, has pledged to invest $6.5 billion in India, Bloomberg News reported.
It also said that Flipkart, in which Walmart bought a majority stake in 2018 for $16 billion, recently got $3.6 billion in the country’s biggest fund raise at a valuation of almost $40 billion.
Biyani was once known to be India’s retail king but the Covid pandemic has hit his empire.
Taylor Jones, Vinit Thakkar and Kyran Jones join forces to launch THG Indiagetty images
Taylor Jones and Vinit Thakkar come together to launch THG India getty images