{"id":268344,"date":"2022-06-14T09:00:58","date_gmt":"2022-06-14T03:30:58","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=268344"},"modified":"2022-06-17T13:25:16","modified_gmt":"2022-06-17T07:55:16","slug":"major-setback-to-amazon-as-nclat-upholds-ccis-decision-to-impose-rs-200-crore-penalty-vis-a-vis-the-amazon-future-deal","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2022\/06\/14\/major-setback-to-amazon-as-nclat-upholds-ccis-decision-to-impose-rs-200-crore-penalty-vis-a-vis-the-amazon-future-deal\/","title":{"rendered":"Major setback to Amazon as NCLAT upholds CCI\u2019s decision to impose Rs. 200 crore penalty vis-a-vis the Amazon-Future Deal"},"content":{"rendered":"

National Company Law Appellate Tribunal (NCLAT): <\/span><\/b>While deciding the instant appeal filed by Amazon.com NV Investment Holdings LLC challenging the order passed by the Competition Commission of India dated 17-12-2021 <\/span>[<\/span><\/b>Amazon.com NV Investment Holdings, In re,<\/span><\/i><\/b> 2021 SCC OnLine CCI 71<\/span><\/b><\/a>]<\/span><\/b>, wherein the CCI had imposed a <\/span>penalty of INR Two Hundred Crore upon Amazon<\/span> d<\/span>ue to their failure to notify combination in terms of the obligation cast under S. 6(2) of the Competition Act; the Bench of Justice M. Venugopal (Judicial Member) and Dr. Ashok Kumar Mishra (Technical Member) in a 300-page deliberation, upheld the decision taken by the CCI to impose such a penalty. The Tribunal held that Amazon did not make full, whole, fair, forthright and frank disclosure of relevant materials and had furnished only limited details \/ disclosures, pertaining to its `acquiring strategic rights and interests\u2019 over `FRL\u2019, and executing `Commercial Contracts\u2019 among itself and `FRL\u2019 concerning the ambit and purpose of `Combination\u2019, therefore the penalty imposed is justified. Amazon was directed to furnish the penalty within 45 days from the date of NCLAT\u2019s decision.\u00a0<\/span>\u00a0<\/span><\/p>\n

Background: <\/span><\/b>In a recapitulation of <\/span>facts;<\/span><\/a> the matter revolved around the appellant\u2019s [Amazon] acquisition of 49% shareholding in Future Coupons Private Limited (FCPL). <\/span>FCPL filed an application stating that Amazon had initiated arbitration proceedings in relation to transfer of assets of FRL, a company in which FCPL holds 9.82% of the shareholding and there are related litigations pending before the constitutional courts. It was alleged that Amazon took completely contradictory stands in the arbitration proceedings and constitutional courts with respect to its investments in FCPL as compared to the representation and submissions made before the Commission. <\/span>Such contradictions were said to establish false representation and suppression of material facts before the Commission<\/span><\/i>.<\/span>\u00a0<\/span><\/p>\n

Contentions by Amazon before the NCLAT<\/span><\/b>\u00a0<\/span><\/p>\n

The counsels appearing for Amazon put forth many contentions before the Tribunal, primary among them are as follows-<\/span>\u00a0<\/span><\/p>\n