Jeff Bezos-Mukesh Ambani spat tests India’s allure for foreign investors

Agencies
February 9, 2021

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The tussle between two of the world’s richest men -- Jeff Bezos and Mukesh Ambani -- to dominate India’s estimated $1 trillion retail market is testing foreign investor patience with flip-flopping court rulings.

This week saw new developments in Amazon.com Inc.’s legal battle to block Ambani’s Reliance Industries Ltd. from acquiring Future Retail Ltd.’s assets, in what would be the country’s largest retail-sector deal. Last week, a single judge at a high court in New Delhi restrained Future Group firms from selling their assets. On Monday, a set of judges at the court overruled that decision. Amazon can appeal the latest ruling in the country’s Supreme Court.

The keenly watched case may set an important legal precedent for investors on whether emergency decisions by foreign arbitrators are valid in India. Amazon had petitioned Indian courts with an order from an emergency arbitration court in Singapore that barred Future Retail from making a deal with Reliance.

It could also help overseas investors judge the validity of agreements in India, which the World Bank has ranked among the bottom 15% of countries in terms of enforcing contracts, worse than Venezuela, Syria and Senegal.

“Not giving effect to a foreign arbitration award undermines India’s already floundering reputation as a good place to invest and do business in,” said Bharat Chugh, a former civil judge in Delhi and now a lawyer practicing in India’s top court. Speedy enforcement of contracts and foreign arbitration rulings are important for overseas investors when assessing the attractiveness of an investment destination, he said.

Spokespeople at Reliance Industries, Amazon’s local unit and Future Group weren’t able to comment immediately on the latest ruling. Future Retail’s lawyers have argued in court that the deal is their only chance to avoid bankruptcy and save jobs.

The rulings in Amazon’s case come after two big foreign arbitration awards against India. In September, an international arbitration tribunal said India acted unfairly in a $3 billion tax dispute with Vodafone Group Plc and in another ruling ordered India to return $1.2 billion to Cairn Energy Plc for a similar failure. India has challenged the Vodafone ruling in Singapore, India’s federal government informed Parliament on Monday.

It’s common for companies investing in India to opt for foreign arbitrations as the judicial process in the country can take years. After an overseas arbitrator makes a decision, companies can seek its enforcement via an Indian court if the opposing side doesn’t comply.

Singapore Order

In the Amazon-Future Retail case, in October a Singapore emergency arbitration tribunal ordered the Future Group to halt the sale to Reliance. Amazon cited a partnership agreement with a Future Group firm for a customer loyalty promotion that restricted the group from selling assets to Mukesh Ambani’s company and allowed arbitration in Singapore to settle disputes.

Future Retail has argued in court that the pact with another group firm doesn’t bind it and the Singapore’s emergency arbitration order wasn’t enforceable in India. That prompted Amazon to petition the Delhi High Court to ensure compliance.

Last week, a high court judge halted the deal and said he was of the initial view that the order from the emergency arbitration court in Singapore is valid and can be enforced in India. On an appeal by Future, a two-judge panel allowed the deal, saying Future Retail wasn’t a party to the agreement between Amazon and Future Coupons Pvt. A detailed hearing of the case will be held from Feb. 26, the judges said on Monday.

“Last week’s order would have been some solace to foreign investors worried about the arbitration enforcement regime in India, but the order passed on Monday against Amazon would raise fresh concerns,” said Samudra Sarangi, a partner at law firm Panag & Babu. “An appeal before the Supreme Court may be inevitable.”

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News Network
November 14,2024

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The UN special rapporteur for Palestine has slammed Israel’s parliament for passing a law authorizing the detention of Palestinian children, who are “tormented often beyond the breaking point” in Israeli custody.

Francesca Albanese, the UN special rapporteur on the rights situation in the Occupied Palestinian Territory, in a Thursday post on X, characterized the experiences of Palestinian minors in Israeli detention as extreme and often inhumane.

The UN expert highlighted the grave impact of this policy, noting that up to 700 Palestinian minors are taken into custody each year, a practice she described as part of an unlawful occupation that views these children as potential threats.

Albanese said Palestinian minors in Israeli custody are “tormented often beyond the breaking point” and that “generations of Palestinians will carry the scars and trauma from the Israeli mass incarceration system.”

She further criticized the international community for its inaction, suggesting that ongoing diplomatic efforts, which often rely on the idea of resuming negotiations for peace, have contributed to normalizing such human rights violations against Palestinian children and the broader population.

The comments by Albanese came in response to Israel’s parliament (Knesset) passing a law on November 7 that authorizes the detention of Palestinian children under the age of 14 for “terrorism or terrorist activities.”

Under the legislation, a temporary five-year measure, once the individuals turn 14, they will be transferred to adult prison to continue serving their sentences.

Additionally, the law allows for a three-year clause that enables courts to incarcerate minors in adult prisons for up to 10 days if they are considered dangerous. Courts have the authority to extend this duration if necessary, according to the Knesset.

The legislation underscores a shift in the treatment of minors and raises alarms among human rights advocates regarding the legal and ethical ramifications of detaining children and the conditions under which they may be held.

Thousands of Palestinians, including hundreds of children and women, are currently in Israeli jails—around one-third without charge or trial. Also, an unknown number are arbitrarily held following a wave of arrests in the wake of the regime's genocidal war on Gaza.

Since the onset of the Gaza war, the Israeli regime, under the supervision of extremist minister Itamar Ben-Gvir, has turned prisons and detention centers into “death chambers,” the ministry of detainees and ex-detainees’ affairs in Gaza says.

Violence, extreme hunger, humiliation, and other forms of abuse of Palestinian prisoners have been normalized across Israel’s jail system, reports indicate.

Over 270 Palestinian minors are being detained by Israeli authorities, in violation of UN resolutions and international treaties that forbid the incarceration of children, as reported by Palestinian rights organizations.

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News Network
November 26,2024

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The extremist Israeli finance minister has called for the occupation of the Gaza Strip and halving the population of the Palestinian territory that is reeling from almost 14 months of genocide.  

Bezalel Smotrich, who has a history of racist statements against Palestinians, made the controversial remarks during a conference of the Yesha Council settler group on Monday.

“We can occupy Gaza and thin the population by half within two years,” through encouraging the so-called “voluntary emigration," he said.

The racist minister also urged the Tel Aviv regime to use its favorable ties with the incoming administration of US President-elect Donald Trump to implement the plan.

“Occupying Gaza is not a dirty word,” he further claimed.

Once the success of the “voluntary emigration" is proven in the besieged Gaza Strip, it can be replicated in the occupied West Bank, he added.

Last month, Smotrich urged the full annexation of the West Bank and Gaza, asserting that Israel should unequivocally declare there would be no Palestinian state.

Israel launched its brutal Gaza onslaught on October 7, 2023, after the Palestinian Hamas resistance group carried out a historic operation against the usurping entity in retaliation for its intensified atrocities against the Palestinian people.

However, nearly 14 months into the offensive, the Tel Aviv regime has failed to achieve its declared objectives of finding captives held in Gaza and eliminating Hamas.

So far, the occupying regime has killed at least 44,235 Palestinians, mostly women and children, and injured 104,638 others, in Gaza. 

It has been committing the war crimes of starvation and of intentionally directing attacks against the civilian population in the besieged territory.

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News Network
November 21,2024

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Shares of Adani Group companies lost about $28 billion in market value in morning trade on Thursday after US prosecutors charged the billionaire chairman of the Indian conglomerate in an alleged bribery and fraud scheme.

Gautam Adani's flagship company Adani Enterprises tumbled 23 per cent, while Adani Ports, Adani Total Gas, Adani Green, Adani Power, Adani Wilmar and Adani Energy Solutions, ACC , Ambuja Cements and NDTV fell between 20 per cent and 90 per cent.

Adani group's 10 listed stocks had a total market capitalisation of about $141 billion at 0534 GMT, compared to $169.08 billion on Tuesday.

US authorities said Adani and seven other defendants, including his nephew Sagar Adani, agreed to pay about $265 million in bribes to Indian government officials to obtain contracts expected to yield $2 billion of profit over 20 years, and develop India's largest solar power plant project.

Adani Green in a statement on Thursday said the US Justice Department had issued a criminal indictment against board members Gautam Adani and Sagar Adani and the Securities and Exchange Commission had issued a civil complaint against them.

The US Justice Department also included Adani Green board member Vneet Jaain in the criminal indictment, it said.

Adani Green's units had decided not to proceed with the proposed US dollar denominated bond offerings due to developments, it added.

"Investors will shy away from Adani Group stocks ... and that's what this sharp selling is signifying," said Saurabh Jain, assistant vice president of retail equities research at SMC Global Securities.

"This could hurt the credibility of the group and maybe borrowing costs will rise," he said.

The indictment comes nearly two years after US shortseller Hindenburg Research alleged that Adani had improperly used tax havens and was involved in stock manipulation, allegations the conglomerate denied.

Also in early Asian trading on Thursday, Adani dollar bonds slumped, with prices down 3c-5c on bonds for Adani Ports and Special Economic Zone. The falls were the largest since the Adani Group came under a short-seller attack in February 2023.

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