Amazon-Group Files Appeal At The NCLAT Against CCI Order And Also Appeal In The Supreme Court Against Delhi High Court Order

It was held by the Commission that Amazon had misrepresented that its decision to pursue the Combination was based on the unique business model of FCPL. Amazon had also misrepresented that RFL, which is a company with strong financials and a futuristic outlook, is relevant to the combination only from the perspective of financial strength to FCPL.

Based on these misrepresentations, the Bench comprising Mr. Ashok Kumar Gupta, (Chairperson), and Ms. Sanjeeta Verma and Mr. Bhagwant Singh Bhishnoi (Members) imposed a penalty on the Amazon-Group.

The Commission also stated that Amazon supressed relevant and material documents which are required to be furnished as per Item 8.8 of Form I. This was held to be in contravention of the provisions of Section 44(a) and (b) and also Section 45(1)(a) and (c) of the Competition Act, 2002.

The Commission noted-

"The purpose of this requirement is to understand the commercial and economic contours of the given combination in addition to the legal contracts submitted as trigger documents against Item 8.7 of Form I. True and complete disclosure against Item 8.8 enables the Commission to determine the appropriate framework for competition assessment of the Combination. In response to Item 8.8, Amazon had furnished a presentation titled 'Taj Coupons – Business Plan for 5 years'. The eight page presentation provides only a brief idea of the gift voucher business of FCPL, its business operating model, estimated five-year business size, organisation design, sales team and financial summary, without any reference to FRL."

Thus, the Commission imposed a penalty of INR 202 Crores under Section 43A, 44 and 45 of the Competition Act, 2002. Section 43A empowers the Commission to impose a penalty on any person or enterprise on failure to give notice under Section 6(2) of the Act. Section 44 provides for penalty for making false statements or omissions to furnish material information while Section 45 provides penalty for offences relating to furnishing of information, without prejudice to the provisions of Section 44.

In the appeal, Amazon has contended that CCI does not have the authority to unwind approval after 12 months. Further, in case of any aberration, it can impose a maximum penalty of Rs. 5 crores, whereas, in the impugned order, a penalty of Rs. 202 crores has been imposed by the Commission.

It has also appealed the decision of the Commission on the ground that abeyance or revocation was not a viable punishment, given that CCI has already stated that the required information had been furnished by Amazon.

The Amazon-Group has also challenged the order of the Delhi High Court passed by a Bench comprising of the Chief Justice and Justice Jyoti Singh, dated January 5^th, 2022 which stayed the proceedings before the Arbitral Tribunal in the matter of Amazon.com NV Investment Holdings LLC v. Future Coupons Private Limited, the Singapore International Arbitration Centre (SIAC) Arbitration, as well as the impugned judgment passed by the Single Judge until the next date of hearing (February 1^st, 2022). The Single Judge, in the impugned order dismissed two petitions moved by the Future Group, holding that in the exercise of its jurisdiction under Article 227, the High Court cannot dictate to a duly constituted Arbitral Tribunal, the manner and procedure of carrying out the arbitration proceedings.

The High Court relied on the Competition Commission of India's order dated 17.12.2021, wherein the approval granted by the Commission via order dated 28.11.2019 was kept in abeyance.

Accepting the contention of the Appellant (Future Retail Ltd.), the Court held that the agreement between Amazon and FCPL is unenforceable and consequently, the Arbitration Agreement as well. Therefore, the Arbitral Tribunal should have taken up the Section 32(2)(c) application seeking termination of arbitration proceedings on priority, before recording evidence on the ground that Amazon had failed to disclose true and complete details of the purpose of the Combination, and also suppressed relevant and material documents.

Aggrieved by this, the Amazon-Group has filed an Special Leave Petition in the Supreme Court, seeking to set aside the aforesaid order of the Delhi High Court. The Special Leave Petition shall come up for hearing next week.