An Indian court on Monday overturned an order that had stalled Future Group's $3.4 billion deal to sell its retail assets, two sources said, in a setback for Future's partner Amazon.com Inc, which has challenged the sale.
A New Delhi court last week sided with the U.S. online retailer and put Future's asset sale to Reliance Industries on hold, leading to an appeal from the Indian retail group.
A two-judge bench hearing Future's appeal put on hold the previous ruling, which had effectively stalled the mega retail deal, two sources familiar with the proceedings said.
Future in its appeal had said its creditors would be at "significant risk" if the Reliance deal failed.
"It is a major setback for Amazon," said one of the sources.
In a fight between two of the world's richest men - Amazon's Jeff Bezos and Reliance's Mukesh Ambani - the U.S. giant has alleged that Future breached certain 2019 contracts by agreeing to the deal with Reliance. Future has denied any wrongdoing.
Amazon has argued in the New Delhi courts that an October decision by an arbitrator who had put the Reliance deal on hold is enforceable. Future has maintained that its retail unit was not party to the arbitration agreement and the order was not binding on the company.
The two-judge Delhi bench agreed that Future's retail unit was not a party to the arbitration agreement invoked by Amazon, Future said, welcoming the order in a filing to stock exchanges.
Amazon did not immediately respond to requests for comment. A detailed written order has yet to be made public.
Future is India's second-largest retailer with over 1,700 stores, and agreed to sell its retail businesses to market leader Reliance last year.