Amazon scored a big win in India after the country's high court issued an order to block the sale of retailer Future Group to its rival Reliance Industries.
A court in the country's capital city of New Delhi ruled on Tuesday to put on hold the $3.3 billion deal between the two companies.
The ruling is a major setback for Future Group, the country's second-largest retailer, and Reliance Industries. Amazon filed its latest objection to stop the deal last year. Reliance, owned by India's richest man Mukesh Ambani, aimed to acquire Future Group's assets, including it more than 1,700 stores across the country.
Analysts said that the corporate battle has become a sort of proxy war between two of the world's richest men. Amazon is currently aiming to gain some ground in India, which it considers as one of the most lucrative markets in Asia.
Amazon reportedly wants to own part of Future Group's assets to help it expand its operations. The outcome of the latest litigation could determine whether or not Amazon would be able to continue to take market share away from Reliance, which currently dominates the market with a network of more than 12,000 outlets.
Justice J. R. Midha said on Tuesday that the order was meant to protect Amazon's rights and that its objection to the deal was valid.
"This court is of the clear view that the (arbitration) order ... is enforceable. All the concerned authorities are directed to maintain status quo," Midha said in his ruling.
In 2019, Amazon lodged a complaint to block the deal struck between Future Group and Reliance. The company said that a non-compete clause that listed 30 restricted parties barred the transaction from legally pushing through. Amazon sought the help of the Singapore International Arbitration Center to enforce the agreement and halt the transaction.
Amazon and Walmart currently dominate the online shopping market in India with an estimated 60% share between them. In recent months, Ambani's Reliance has slowly increased its presence through its JioMart subsidiary.
While the acquisition of Future Group's assets isn't considered to be a "must-have" for both companies, analysts said that the legal fight could turn ugly if it transforms into an "ego battle" between the two billionaires.
Amazon said that it welcomed the decision to temporarily halt the transaction. Reliance said that it will explore all legal means to ensure that the deal pushes through.