The interim judgement of a Singapore arbitration court barring the Future Group from going ahead with the deal with Reliance Retail will not have a bearing on the Competition Commission of India’s regulatory assessment, an official said.
The competition watchdog’s limited concern is towards the two parties involved and the deal’s impact on competition, said a CCI official.
In an interim order on October 25, the Singapore International Arbitration Centre (SIAC) restrained the two concerned parties from going ahead with the deal.
The order was based on a plea filed by Amazon claiming the deal violates the terms of its agreement with the Future Group when it acquired a 49% stake in Future Coupons for about Rs 1,500 crore in 2019.
“Firms filing the combination notice with the CCI should disclose if any other firms have a first right of refusal in the stakes involved, but it doesn’t matter as far as proceedings before the commission are concerned,” the official said.
Experts agreed that the competition regulator’s assessment of the RIL-Future Group deal would be at a fairly advanced stage considering it was notified over a month ago and its progress would not be impacted by the arbitral tribunal’s injunction.
If the case was such that the CCI had already given its approval, the SIAC’s interim order would still not nullify the approval, according to Kanika Chaudhary Nayar, partner at law firm Luthra and Luthra.
“The approval order given by the CCI can be challenged but the CCI proceedings cannot be halted,” Nayar added.
It is also pertinent to note that the competition regulator assesses multiple bids for a single target firm undergoing insolvency proceedings, according to Karan Singh Chandhiok, partner at Chandhiok and Mahajan.
“The CCI’s jurisdiction is limited to assessing how the proposed acquisition will change the competitive dynamics in the market. It’s not concerned whether the parties could have entered into the transaction or whether the actual transaction consummates or not,” Chandhiok said.
Amazon has written to Sebi and the stock exchanges to consider the interim judgement and it might consider going to an Indian court to enforce the SIAC’s order within the country, according to reports.
Since the Singapore court’s order is not self-enforceable in India, if the Future Group does not adhere to the SIAC’s order, Amazon can move an Indian High Court to halt the progress of the deal.
“Unless Amazon finds a way to enforce the Emergency Arbitrator’s orders or moves a petition under Section 9 of the Arbitration and Conciliation Act and gets an injunction that extends to regulatory assessments, it would be difficult to halt any regulator, including the CCI, from concluding their proceedings,” Chandhiok said.
Both Reliance and the Future Group have stated their intentions to proceed with the transaction without any delay.
