Virendra Pandit
New Delhi: The East India Company, although revived in 2010 and owned by a Mumbai-born British-Indian entrepreneur Sanjiv Mehta, refuses to fade away from the country’s memory.
The latest reference came in an Indian court where Amazon.com Inc. and Reliance Industries Ltd (RIL) are engaged in a legal battle over Future Retail, which owns the Big Bazaar retail chain, founded by Kishore Biyani.
Eminent lawyer Harish Salve, representing Future Retail Ltd, told the Delhi High Court that Amazon was behaving “like the East India Company of the 21st century.”
Amazon’s stand is “either you do business with me or you shut down,” he said, arguing that an aborted asset sale deal between Reliance Retail and Future Retail could cause massive job losses and bankruptcy, according to media reports on Wednesday.
The East India Company (EIC) was formed by British merchants in the 17th century to trade in Indian spices. Later it colonized and exploited the country until the British Crown came to control India after 1857.
The reference to the EIC came during a courtroom battle between Amazon and RIL which seek to dominate India’s $1 trillion consumer market.
The battle began after RIL announced in August the $3.4 billion purchase of the indebted Future Group. Amazon, which holds a 49% stake in an unlisted Future Group entity, tried to block RIL’s planned purchase of Future Group’s assets, stating that the retailer violated a contract by agreeing to a sale to a rival (RIL).
Amazon objected to this transaction and secured an order from a Singapore arbitration court that temporarily put the asset sale on hold.
Future Group petitioned against this freeze-order in the Delhi High Court, which is now examining whether Amazon has any legal basis to object to the transaction.
Arguing for Future, Salve asserted that Amazon had no investment in Future Retail and asked if an overseas firm should be allowed to control an Indian company’s business dealings.
If RIL secures Future’s assets, Reliance Retail, which is already India’s biggest retailer, will have an edge in the Indian market where most of the consumers still go shopping in stores, unlike Amazon, an e-commerce company.
On the other hand, Amazon is trying to stay afloat in India, its current biggest market, after losing ground to home-grown rivals in China.
Amazon’s lawyer Gopal Subramanium, India’s former Attorney-General, maintained that the American giant was no Big Brother or East India Company and had, in fact, introduced Future Retail to a prospective investor to ease its distress.
Amazon has created thousands of jobs and invested $6.5 billion in India so far, he said.
Counsel for RIL argued that the Singapore arbitration tribunal’s emergency order is not recognized by Indian law and the deal is crucial to saving Future Retail from collapse.
Amazon had also apprised India’s market and antitrust regulators of the Singapore arbitration order of an interim stay.
However, last week, the antitrust regulator, Competition Commission of India, approved the Reliance-Future deal.
