The Supreme Court has set aside the CCI’s ₹202 Cr penalty on Amazon imposed in 2021, granting the e-commerce giant relief in a legal saga originating back in 2019
In 2022, the CCI had suspended its approval of Amazon’s $200 Mn investment in Future Coupons, arguing that Amazon had misrepresented its position to the watchdog
The SC order comes after FCPL recently reached a settlement with Amazon, agreeing to pay ₹11 Cr in damages
The Supreme Court has set aside the Competition Commission of India (CCI)’s order imposing a ₹202 Cr penalty on Amazon India in a case dating back to the ecommerce giant’s 2019 investment in Future Coupons Pvt Ltd (FCPL).
A two-judge bench of Justices Vikram Nath and Sandeep Mehta delivered the judgement, ordering India’s competition regulator to refund any fine or deposit paid by Amazon. The CCI would have to pay 6% interest while refunding the sum within eight weeks, or else pay 9% interest if not doing so within the prescribed time.
The ruling comes weeks after FCPL struck a settlement deal with Amazon pertaining to the case. As part of the deal, FCPL agreed to pay Amazon ₹11 Cr in damages and both sides withdrew all legal proceedings against each other.
The final settlement, reached on March 13, amounts to just over 10% of the total amount of ₹105 Cr awarded by the Singapore International Arbitration Tribunal (SIAC). Following this, the Delhi High Court disposed of petitions filed by the Future Group challenging the original award granted to Amazon.
The case traces back to 2019, when Amazon invested $200 Mn (₹1,431 Cr) for a 49% stake in FCPL – the gift voucher unit of Future Group and a promoter group entity of Future Retail that held around 9.8% stake in the former Big Bazaar operator.
The CCI had approved the deal at the time, but in 2021, suspended its approval and imposed a ₹202 Cr penalty on Amazon. The regulator alleged that Amazon had suppressed its strategic interest in Future Group’s brick-and-mortal retail business, based on the ecommerce giant’s internal records.
The National Company Law Appellate Tribunal (NCLAT) later upheld the CCI’s order keeping the investment in abeyance in 2022. When Amazon failed to pay the penalty amount that year, the CCI issued a recovery notice to the tech giant, prompting it to approach the Supreme Court.
In parallel, the tensions between Amazon and Future Group intensified in 2020 due to a separate deal involving Reliance Industries. Back then, amid heavy debts and mounting losses, Future Retail had sought to escape its pandemic-induced predicament by selling its retail and allied businesses to Reliance Retail for ₹24,713 Cr.
Amazon had opposed the transaction and moved the Singapore International Arbitration Tribunal, securing a favourable interim ruling. This triggered further allegations from the CCI that Amazon’s arguments to the tribunal, citing its contractual rights from the FCPL deal and strategic interest in Future Retail, contradicted its position as stated to the watchdog.
Ultimately, RIL called off the deal while Future Retail entered insolvency proceedings due to defaulting on its debts.
Source: Inc42 - Startups
