Future Group Shares Fall After Delhi HC Order Rejects Plea Against Amazon Arbitration

The shares of Future Retail, Future Consumer, Future Enterprises, and Future Lifestyle Fashions were down more than 3.5 per cent during early trade on Wednesday

Future and Amazon have been engaged in a legal tussle for the past several months. Image: Getty

New Delhi: Shares of Future Group companies plunged on Wednesday after Delhi High Court on Tuesday dismissed Indian retailer's petition to declare arbitration proceedings with Amazon.com illegal.

The shares of Future Retail, Future Consumer, Future Enterprises, and Future Lifestyle Fashions were down more than 3.5 per cent during early trade on Wednesday.

At 11.45am, Future Enterprises shares were down 3.94 per cent on the BSE.

Tuesday’s high court order came as a shock to Future Group investors. The verdict on Tuesday evening came after Future Group asked the high court that there was no legal tenacity for the arbitration to continue between Future and US e-commerce major.

Earlier, the country’s antitrust agency, Competition Commission of India (CCI), had earlier suspended a 2019 deal used by Amazon to assert rights over Future.

Future and Amazon have been engaged in a legal tussle for the past several months.

According to a report by Reuters, Amazon has successfully used the terms of its $200 million investment in a Future unit in 2019 to block the Indian retailer’s attempt to sell retail assets to Reliance Industries, alleging breach of certain contracts. However, Future denies any wrongdoing.

The long-running conflict is being heard by a Singapore arbitration panel, but both sides have been fighting parallel cases in Indian courts to enforce or overrule certain decisions taken by the arbitrator.

Future Retail argued that since the 2019 deal no longer has antitrust approval, it has “no legal existence” in India, and Amazon can no longer assert any of its rights. The “continuation of the entire arbitration proceedings is a perpetuation of illegality,” Future said in its filing dated December 31.

The filing also showed that Future’s appeal to the Delhi High Court comes after the Singapore arbitration panel did not agree to its immediate demands to terminate the proceedings, saying arguments would continue this month.