Mukesh Ambani vs Jeff Bezos: A fight or a waiting game?

News Network
November 3, 2020

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A vanilla commercial dispute is setting the stage for a clash between the world’s No. 1 and No. 6 richest men. But the legal wrangling is a sideshow. What Jeff Bezos and Mukesh Ambani are really fighting over is pole position in the only billion-plus-people consumer market available to both of them: India.

The ostensible battleground is a $3.4 billion deal Indian tycoon Ambani’s Reliance Industries Ltd. stitched up in August to acquire assets of debt-laden local retailer Future Group. Bezos’s Amazon.com Inc. is trying to block the transaction.

That, in itself, is a bit of a dampener. Expectations were building for the two billionaires to work together. In September, Bloomberg News reported that Ambani had given Amazon an option to buy as much as 40% of Reliance Retail Ventures Ltd., seeking to repeat the success he had earlier this year in bringing in Facebook Inc. and Alphabet Inc. as partners to his digital platform.

By seeking to stall Ambani’s purchase of Future, Bezos may be signaling that he would rather remain a rival. Or, that he’s buying time to sweeten the offer currently on the table.

The actual quarrel is only interesting when you read between the lines of the claims and counterclaims.

Amazon bought a 49% stake last year in a private firm controlled by Kishore Biyani, a pioneer of modern-format retailing in the country. The investment gave the U.S. e-commerce giant the right to acquire Biyani’s shares in the publicly traded Future Retail Ltd. from the third year. Another of Bezos’s conditions was that Biyani wouldn’t sell his assets — about 1,500 stores nationwide — to restricted persons, including Reliance, which operates India’s largest retail chain.

After the Future-Reliance deal was announced, Amazon alleged breach of contract and obtained an interim stay against the sale from an arbitrator in Singapore, a preferred neutral venue in Asia for settling disputes in cross-border agreements. The U.S. company then wrote a letter to Indian stock exchanges and the regulator, asking them to not approve the transaction.

Future Retail has challenged Amazon’s position by saying that the Singapore ruling has no legal basis in India, and that anyway, it wasn’t a party to the founder’s agreement. Given the debilitating impact of the Covid-19 pandemic on operations, the retailer says it’s doing the right thing by all stakeholders in selling assets to Reliance. As for Amazon’s claim of $193 million in damages plus interest, that liability, if awarded by the arbitrator, should fall on Biyani’s private firm that did the deal, Future Retail argues.

Biyani is just a pawn in a much bigger power play. Future's cash crunch didn't emerge suddenly. Amazon had ample opportunity to tiptoe around India’s legal restrictions on foreign ownership of retail chains to act as a white knight. But it didn’t.

Amazon may still be interested in partnering with Ambani — at the right price. Other investors, such as Silver Lake Partners and KKR & Co., have written him checks worth $5 billion in total. They may have feared losing out on what could become India’s most successful mix of physical and digital shopping, a strategy that leverages Reliance Retail’s own outlets together with independently owned neighbourhood stores connected to Ambani’s 4G phone network of 400 million users. However, the portion offered to Amazon would mean a $20 billion commitment. Bezos could afford to see how well Ambani executes his plan.

Amazon’s India website kicked off its annual festival season last month to record sales in the first couple of days. Reliance Retail’s revenue also jumped 30% in the September quarter from the previous three months. But although India’s nationwide lockdown has ended, not all stores have reopened fully. Footfall has yet to recover, especially in fashion and lifestyle and at stores inside malls. In Macquarie’s estimates, the next fiscal year’s earnings per share for Reliance Industries, the holding company, may be 23% below the consensus street forecast. A reason, the brokerage says, is stiff competition, high investment and low margins in retail. Reliance Industries shares fell 8.6% in Mumbai on Monday.

Amazon’s letter to the Securities and Exchange Board of India makes a reference to India’s “ease of doing business,” which has been a sore point with foreign investors from Vodafone Group Plc to Cairn Energy Plc. The regulator needs to hold listed firms accountable for their dealings, Amazon said in the letter, according to Reuters, which has seen a copy.

The last thing India wants is more of a bad rap. The Seattle-based firm already has to operate with one hand tied behind its back: As a foreign e-commerce player, it can’t own inventory or openly discount merchandise. Even harsher rules — covering data and algorithms — may be on their way. It’s important for regulators to not give Amazon the chance to paint a commercial feud as another sign of India’s unfair treatment of global investors.

In more ways than one, a waiting game by Bezos may not be a bad idea.

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News Network
November 13,2024

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New Delhi: The Supreme Court took a firm stance on ‘bulldozer justice’ today, affirming that the Executive cannot bypass the Judiciary and that the legal process must not prejudge the guilt of an accused. In a significant judgment, the bench led by Justices BR Gavai and KV Viswanathan set new guidelines for demolition practices, responding to petitions challenging the controversial bulldozer actions taken against individuals accused of crimes.

The rise of this practice, termed 'bulldozer justice,' has seen authorities in various states demolish what they claim to be illegal structures belonging to accused individuals. However, multiple petitions questioned the legality and fairness of this approach, bringing the matter before the court.

Justice Gavai highlighted that owning a home is a cherished goal for many families, and an essential question was whether the Executive should have the authority to strip individuals of their shelter. “In a democracy, the rule of law protects citizens from arbitrary actions by the state. The criminal justice system must not assume guilt,” stated the bench, underscoring that due process is a fundamental right under the Constitution.

On the principle of separation of powers, the bench reinforced that the Judiciary alone holds adjudicatory powers and that the Executive cannot overstep these boundaries. Justice Gavai remarked, “When the state demolishes a home purely because its resident is accused of a crime, it violates the doctrine of separation of powers.”

The court issued a strong warning about accountability, stating that public officials who misuse their power or act arbitrarily must face consequences. Justice Gavai observed that selectively demolishing one property while ignoring similar cases suggests that the aim might be to penalize rather than enforce legality. “For most citizens, a house is the product of years of labor and dreams. Taking it away must be an action of last resort, thoroughly justified,” he said.

In its directives under Article 142 of the Constitution, the Supreme Court established new demolition guidelines. These include:

Mandatory Show-Cause Notice: No demolition should occur without first issuing a show-cause notice. The person served has a minimum of 15 days or the duration stated in local laws to respond.

Transparency of Notice Content: The notice must include specifics about the alleged unauthorized construction, the nature of the violation, and the rationale for demolition.

Hearing and Final Order: Authorities are required to hear the response of the affected individual before issuing a final order. The homeowner will have 15 days to address the issue, with demolition proceeding only if no stay order is obtained from an appellate authority.

Contempt Proceedings: Any breach of these guidelines would lead to contempt proceedings. Officials who disregard these norms will be personally accountable for restitution, with costs deducted from their salaries.

Additionally, the court mandated that all municipal bodies establish digital portals within three months, displaying show-cause notices and final orders on unauthorized structures to ensure public transparency and accountability.

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News Network
November 21,2024

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The International Criminal Court (ICC) has issued arrest warrants for Israeli prime minister Benjamin Netanyahu and his former minister of military affairs Yoav Gallant over war crimes against Palestinians in the Gaza Strip.

The court’s Pre-Trial Chamber I issued warrants of arrest for Netanyahu and Gallant "for crimes against humanity and war crimes committed from at least 8 October 2023 until at least 20 May 2024, the day the Prosecution filed the applications for warrants of arrest”, it confirmed in a statement Thursday.

It is the first instance in the court's 22-year history it has issued arrest warrants for Western-allied senior officials.

In its statement, the ICC's Pre-Trial Chamber I, a panel of three judges, said it has rejected appeals by Israel challenging its jurisdiction. 

The chamber said it has decided to release the arrest warrants because "conduct similar to that addressed in the warrant of arrest appears to be ongoing", referring to Israel's ongoing onslaught on Gaza.

Netanyahu and Gallant, it said, “each bear criminal responsibility” for “the war crime of starvation as a method of warfare; and the crimes against humanity of murder, persecution, and other inhumane acts,” as well as “intentionally directing an attack against the civilian population.”

All 124 states that signed the Rome Statute, the treaty that established the court, are now under an obligation to arrest the wanted individuals and hand them over to the ICC in the Hague. 

The court relies on the cooperation of member states to arrest and surrender suspects. The Netherlands' foreign minister quickly said his country was prepared to enforce the warrants while 93 nations earlier reiterated their support for the ICC.

Triestino Mariniello, a lawyer representing Palestinian victims at the ICC, called the warrants "a historic decision".

He noted that the court had endured "pressure and threats of sanctions" from the US government, but acted nonetheless.

As expected, the Tel Aviv regime rejected the rulings, with its security minister Itamar Ben Gvir calling the warrants “anti-Semitic through and through.”

The ICC said Israel’s acceptance of the court’s jurisdiction was not required.

Israel and its major ally, the United States, are not members of the court. 

Israel unleashed its bloody Gaza onslaught on October 7, 2023. So far, it has killed at least 43,985 Palestinians, mostly women and children, and injured 104,092 others, according to the Gaza Health Ministry.

Israel faces an ongoing South Africa-led genocide case at the International Court of Justice (ICJ).

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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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