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Supreme Court Grants 2 More Weeks To CCI To Decide Complaint On Amazon-Future Deal

Srishti Ojha
29 Nov 2021 9:51 AM GMT
Supreme Court Grants 2 More Weeks To CCI To Decide Complaint On Amazon-Future Deal
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The Supreme Court on Monday extended by two weeks the time granted to the Competition Commission of India by the Delhi High Court to take a decision with respect to Show Cause notice issued by it to Amazon over the deal with Future group. A Bench comprising Chief Justice of India NV Ramana, Justice Surya Kant and Justice Hima Kohli has granted the two weeks extension to enable...

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The Supreme Court on Monday extended by two weeks the time granted to the Competition Commission of India by the Delhi High Court to take a decision with respect to Show Cause notice issued by it to Amazon over the deal with Future group.

A Bench comprising  Chief Justice of India NV Ramana, Justice Surya Kant and Justice Hima Kohli has granted the two weeks extension to enable e-commerce giant Amazon to make submissions and argue its case before the CCI.

"We are not going into details, we'll grant two more week's time. You use the time and appear and argue before the Commission. You raise all your objections," the Bench said.

"Two weeks time granted more than High Court. Parties at liberty to raise all objection before the Commission. With above observation SLP disposed of," the Bench recorded.

The Bench has issued the direction in Amazon's special leave petition against Delhi High Court's order of November 16 directing the Competition Commission of India to take a decision with respect to Show cause notice issued by it to Amazon in 10 days.

The CCI had issued a show-cause notice to Amazon on the issue of revocation of approval given to the it for investment transaction with Future Coupons Pvt Ltd (FCPL).

The Delhi High Court through its impugned order had directed CCI to take a decision with respect to the Show Cause Notice dated 4th June 2021 within a period of 10 days in accordance with law and the facts and circumstances of the case.

Courtroom Exchange:

During the hearing, Senior Advocate Gopal Subramanium appearing for Amazon submitted that, there is an ongoing arbitral proceeding before the Arbitral Tribunal . One of the respondents, who was injuncted by the Arbitral Tribunal filed a complaint before the CCI. The complaint was taken, hearing was concluded, further hearing was fixed and then on 14th Amazon got a notice from CCI setting a schedule for hearing.

He added that this was followed by CAIT(Confederation of All India Traders), which is a busybody filing a complaint before Commission, and then filing a PIL before the High Court in which the order was passed. To pass such a direction when commission is in seisin of the matter is not proper, he argued.

The CJI said, " You are saying that you are aggrieved as you are not heard. You are willing to participate, you submitted your explanation after giving the notice and its going on. Your ground is that you want some more time as time isn't sufficient."

CJI further stated that the last time when an urgent listing of the matter was sought by Senior Advocate Amit Sibal the Bench had made it clear that if they are really aggrieved by the High Court's order they have liberty to go to the High Court and ask for the case to be reopened.

The CJI added that once the regulatory authority issued notice, the petitioner could also seek time from the authority.

Mr Subramanium responded to the Court's query saying that they had appeared before Commission but the Commission had stated that since High Court has passed order they to complete the proceeding.

"6000 pages was served on us on 21st and we were asked to give a response on the 22nd. I don't see how CAIT can be heard in these proceedings. This is an important question. Your Lordships have held that proceeding before Commission are not intended for strangers. This court reiterated that commission will hold its proceeding with degree of confidentiality," Mr Subramanium said.

Mr Subramanium further argued that sufficient time was not given to them by the CCI to make submissions or give their response.

"The case was listed for arguments on 4th Jan. Why should fast forward be done? All that I'm saying is, grant us more time. We need time. Mr Sibal appeared before Commission and asked for adjournment. Without a response can someone complete arguments?," He said.

Senior Advocate Mukul Rohatgi appearing for Future Coupons submitted that FCPL is the respondent in arbitration proceedings who has filed complaint before the CCI, where the hearing has happened.

"How can there be a grievance against an order which only says decide the matter? Secondly, they have already participated. Thirdly, they were given additional chance to participate, but they said that they will not as their SLP will come before this court." Mr Rohatgi said.

Mr Rohatgi further submitted that the proceedings before the Arbitral Tribunal and before the CCI are completely different.

" The two proceedings are entirely distinct. I'm a respondent in one of the proceedings. In the other proceeding Amazon was allowed by CCI to invest 1400 crores in my company, I made an application to CCI that the permission granted to bring foreign direct investment to my company was result of misrepresentation and fraud and should be revoked." Mr Rohatgi said.

Senior Advocate Krishnan Venugopal appearing for CAIT submitted that they were concerned as in the particular transaction Amazon has through back doors violated FDI norms.

"No foreign company can invest in multi brand retail & Future Retail is a multi brand retail. They can't get into agreements with related entities to sell on their website. Further, Amazon being allowed to take over Future has serious repercussions as Amazon's entire business model depends on doing away with middlemen traders", Venugopal argued.

Mr Venugopal submitted that "the CCI has the ability to hear third parties. Amazon's hearing was already over, submissions were heard. Thereafter Commission wasn't passing order. The High Court therefore said where's the point of you going on like this."

Mr Subramanium submitted that on 15/11/2021 CCI asked Amazon to furnish all documents to FCPL, and asked FCPL to give a submission. While FCPL was given 7 days to make submission, the same time wasn't granted to Amazon as because of the High Court's order there was a schedule set for the hearing.

High Court's order:

The impugned order was passed in a PIL filed by Confederation of All India Traders seeking to help over 6000 small traders and manufacturers to whom Future Retail Ltd. allegedly owes Rs.10,000 Crores as well as nearly 50,000 employees of the Future Group, whose future is at stake.

The petitioner contended before the High Court that in case the Future Group becomes bankrupt, it will seriously affect the stakeholders. It was submitted that Future Coupons Pvt. Ltd. had addressed a letter to Competition Commission of India on 25.03.2021 seeking initiation of action against Amazon under Sections 44 and 45 of the Competition Act.

The petitioner claimed that it learnt through the Reports in the media that CCI has already issued a Show Cause Notice to Amazon on the basis of the said letter and a response has been submitted by Amazon, but till date no action has been taken by CCI. 

The High Court, looking to the controversy involved between the two Groups and the pending litigations in various Forums, was not inclined to delve into the merits of the issues raised herein.

The High Court therefore had "directed CCI to consider within two weeks, the show cause notice dated 04.06.2021, issued by CCI, based on the letter dated 25.03.2021, addressed by FCPL to CCI, as averred and alleged in the writ petition, after giving an opportunity of hearing to the stakeholders."

Earlier in July this year, CCI had issued a show-cause notice to Amazon on the issue of revocation of approval given to the US company for investment transaction with Future Coupons Pvt Ltd (FCPL) over the complaints filed by Future Group.


Case Title: Amazon vs Confederation of All India Traders

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