The Supreme Court of India on Friday said Reliance cannot go ahead with its $3.4 billion deal to buy Future Group's retail assets.
It also said a Singapore arbitrator's decision to hold the sale of Future Retail is enforceable, reports the NDTV.
Amazon had taken partner Future Group to court saying it violated contracts by agreeing to sell retail assets to market leader Reliance Industries last year for over Rs27,000 crore. Future denied any wrongdoing.
The Singapore Emergency Arbitrator had restrained Future Retail from going ahead with its merger with Reliance Retail. The Supreme Court today said the decision is valid.
When Amazon had challenged the arbitrator's decision, a Delhi High Court had held the order to be enforceable. A single judge had also directed that the assets of Future's Kishore Biyani be seized and had asked why he should not face a three-month jail term.
In February, a Delhi High Court division bench had put on hold the single judge order that effectively blocked the deal. Amazon then approached the Supreme Court.
Amazon said in its court filing the order by the Delhi court was "illegal" and "arbitrary" and the company which has committed $6.5 billion in investments in India would face "irreparable harm" if the top court did not intervene. The legal fight over Future's assets has embroiled two of the world's richest men - Amazon's Jeff Bezos and Reliance's Mukesh Ambani. The final outcome will be seen shaping India's pandemic-hit shopping sector and will determine if Amazon is able to dent the dominance of Reliance.
Amazon has argued that a 2019 deal it had with a Future unit included clauses saying the Indian group couldn't sell its retail assets to anyone on a "restricted persons" list, including Reliance.
The US company had invested in Future Group in 2019, acquiring a 49 per cent stake in Future Coupons Ltd, which holds 9.82 per cent in Future Retail.
Future, India's second-largest retailer with over 1,700 stores, has said it will be pushed towards liquidation if the deal falls through.
India's antitrust regulator has accused Amazon of concealing facts and making false submissions when it sought approval for the 2019 investment in the Future Group unit, news agency Reuters reported last month. The Competition Commission of India (CCI) letter, dated June 4, could complicate the legal battle for Amazon.