India’s top court has handed Amazon a major victory in its fight with Reliance Industries for the country’s growing e-commerce market.
On Friday, the Supreme Court of India ruled in favor of the American company’s efforts to stop its rival Reliance from buying Future Retail, a local, cash-strapped retailer.
The e-commerce firm founded by Jeff Bezos had been trying to stop the deal since it was announced last year, and in October, Singapore International Arbitration Centre (SIAC) had ordered a temporary halt on the $3.4 billion deal.
Future Group had raised questions about the validity of the Singapore court’s order in India, but the country’s Supreme Court ruled Friday that it is enforceable.
While Amazon welcomed the verdict, it’s a major setback for Reliance, the massive conglomerate owned by Mukesh Ambani, Asia’s wealthiest man. He’s been locked in a battle with Amazon over access to more of India’s online shopping industry.
Adding Future Retail — the cash cow of Indian conglomerate Future Group, and the owner of supermarket chain Big Bazaar and other brands — was supposed to help Ambani gain a bigger foothold in the market.
When asked for comment, Reliance sent CNN Business a copy of Future Retail’s statement, which said the retailer “intends to pursue all available avenues to conclude the deal to protect the interests of its stakeholders and workforce.”
Since the deal was announced, Amazon (AMZN) has argued that the deal violated an agreement that it made with another entity owned by Future Group. Amazon’s deal gave it a nearly 5% stake in Future Retail, along with the right of first refusal to acquire more shares in Future Retail, according to securities filings.
Amazon sought to enforce the agreement it made with Future Group through the SIAC, with Singapore often seen as a neutral jurisdiction to settle disputes. Friday’s verdict sends the dispute back to the arbitrator.
“We hope that this will hasten a resolution of this dispute with Future Group,” an Amazon spokesperson said.
Amazon and Walmart’s Flipkart dominate India’s e-commerce sector. But Ambani has ambitions to challenge that with JioMart, his online shopping platform that’s expected to branch out into everything from electronics and apparel to pharmaceuticals and healthcare.
Shares in Reliance Industries were down almost 2% in Mumbai after the ruling, while Future Group fell 10%.