Future-RIL Deal In Limbo After High Court Backs Amazon, Authorities Asked To Maintain 'Status Quo'

The Delhi High Court told Indian authorities to "maintain status quo," after it heard Amazon's objections to the deal.

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Future-RIL Deal: One of the biggest deals in the retail sector seems to have got stuck in a legal limbo after the Delhi High Court on Tuesday blocked Future Group’s sale of a swathe of assets to rival Reliance Industries after Amazon raised objections to the $3.4 billion deal. As per the Reuters report, the decision is seen as a setback for Future Group, which agreed to sell its retail assets to rival Reliance last year. Also Read:

What’s the issue?

Since the deal came through, the US giant Amazon has locked horn in legal disputes with Future, alleging the Indian firm violated contracts by selling its assets. On the other hand, Future denies any wrongdoing.

After Future said it was not bound by an arbitrator’s order that put the deal on hold, Amazon last month asked the Delhi High Court to enforce the decision of an arbitrator who had put the Reliance deal on hold.

What did the High Court say?

Ruling on Amazon's request for an interim relief, Justice J. R. Midha said an immediate order was necessary to protect Amazon's rights, adding that the arbitrator had "rightly proceeded" against Future.

This court is of the clear view that the (arbitration) order ... is enforceable," he told lawyers for Amazon and Future during the hearing held via video conferencing. "All the concerned authorities are directed to maintain status quo with respect to all matters," he said.

The settlement of the ongoing legal dispute will determine who will emerge as the top spot in the fast-growing retail market. Stock exchanges have cleared Future's deal with Reliance, despite Amazon's requests to regulators to block it.

On the other hand, another approval was pending from the National Company Law Tribunal. Future, is the second largest retailer, has stated earlier that the Reliance deal is critical to its survival on the face of competition.