The Delhi High Court’s order this week has resulted in a pyrrhic victory for Amazon.com Inc. against Future Retail Ltd.

The court upheld Amazon’s right to make representations to statutory authorities against the Future Group-Reliance Retail Ventures Ltd. deal. But it also made made several observations in its order that could potentially upend the U.S. retail giant’s 2019 investment in Future Coupons Pvt.—Future Retail’s parent.

Experts BloombergQuint spoke with said that the bench shouldn’t have expressed an opinion on whether Amazon’s rights vis-à-vis Future Retail Ltd. amount to control. But since it has, regulators like the Securities and Exchange Board of India and the Competition Commission of India will now be forced to investigate the 2019 agreements between Future Coupons-Amazon and Future Retail-Future Coupons.

Sitesh Mukherjee, an independent legal counsel, told BloombergQuint that on the one hand the high court upheld the legal sanctity of the emergency arbitration award but on the other, it ruled on aspects that are a subject matter of arbitration proceedings.

“These prima facie findings are something that would sway the regulators,” Mukherjee pointed out. To that extent, the judgment has traversed beyond the issues that the court was required to decide upon. It was only required to answer whether Amazon could rely upon the emergency arbitration award to write to the regulators, he said.

The high court order has given leverage to Future Retail and Reliance Industries Ltd., corporate lawyer Murali Neelakantan said. The order, he said, has forced Amazon on the back foot by making way for regulators and the government to examine these agreements. “This is the part where Amazon would be worried and I suspect it would also become one of the grounds for appeal,” Neelakantan said.



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