The Supreme Court on Wednesday set aside the Competition Commission of India’s (CCI) order suspending Amazon’s investment deal with Future Group and imposing a Rs 202-crore penalty on the US e-commerce company, in a ruling that could influence how the competition regulator examines disclosures in complex investment structures.

A bench of Justices Vikram Nath and Sandeep Mehta also quashed the National Company Law Appellate Tribunal’s (NCLAT) June 2022 order that had upheld the CCI’s action against Amazon. The court further directed that any amount deposited or recovered from Amazon pursuant to the orders be refunded within eight weeks.

The dispute traces back to Amazon’s 2019 investment of around Rs 1,400 crore in Future Coupons, a promoter entity of Future Retail. Through the transaction, Amazon acquired a stake in Future Coupons, which in turn held a shareholding in Future Retail. The deal had received CCI approval at the time and was viewed as a strategic investment by the e-commerce company in the organised retail sector.

However, the matter later took a different turn after Future Group, which was facing financial stress, announced in August 2020 a proposed sale of its retail, wholesale and logistics businesses to Reliance Retail in a deal valued at about Rs 24,700 crore. Amazon opposed the transaction, arguing that its agreements with Future contained certain rights and restrictions that prevented such a sale without its consent.

The disagreement triggered a prolonged legal battle that stretched across multiple forums in India and overseas. Amazon approached the Singapore International Arbitration Centre (SIAC) seeking emergency relief against the Future-Reliance transaction. In October 2020, an emergency arbitrator ruled in Amazon’s favour and restrained Future from proceeding with the transaction.

The dispute subsequently moved to the Supreme Court, which in a separate ruling in 2021, upheld the validity of emergency arbitration awards under Indian law, a judgment that was seen as significant for cross-border commercial disputes.

Meanwhile, CCI revisited Amazon’s 2019 transaction with Future. In December 2021, the regulator held that Amazon had not fully disclosed the scope and strategic purpose of the transaction and certain interconnected arrangements while seeking approval. It suspended its earlier approval and imposed a total penalty of Rs 202 crore, saying material information relating to the deal structure and rights flowing from the transaction had not been adequately disclosed.

Amazon challenged the order before NCLAT, which largely upheld the regulator’s findings, following which the company moved the Supreme Court. Even as litigation continued, the original Future-Reliance transaction failed to materialise and Future Retail’s financial position deteriorated, eventually leading to insolvency proceedings.

Legal experts said Wednesday’s ruling may assume significance beyond the Amazon-Future dispute, as it could have implications for regulatory certainty and disclosure standards in merger filings.