The National Company Law Appellate Tribunal (NCLAT) has dismissed a plea seeking to initiate insolvency proceedings against Amazon Wholesale (India).
This decision comes after Multiplier Brand Solutions, a vendor, filed a petition alleging Amazon defaulted on payments of INR 3.7 Cr for eight invoices raised between March 2023 and May 2023.
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Amazon accused by brands of unpaid services
Multiplier Brand Solutions claimed that Amazon failed to pay for services provided under a “novation and substitution agreement” signed in 2021. However, Amazon disputed the amount, citing allegations of fake data submitted by the firm for a separate project. The NCLAT upheld the previous order passed by the National Company Law Tribunal (NCLT), which also dismissed the plea, stating that the claim was “disputed much before demand notice was issued”.
Further, the Appellate Tribunal stated, “The adjudicating authority (NCLT) has not committed any error in refusing to initiate CIRP (Corporate Insolvency Resolution Process), there being (a) pre-existing dispute which is reflected with the correspondence which took place between the parties much prior to issuance of demand notice.” This decision brings relief to Amazon, which has been facing heavy regulatory scrutiny in India lately.
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Amazon Wholesale India narrows loss to INR 344.7 Cr
Notably, Amazon Wholesale (India) is the B2B arm of the ecommerce major, supplying products from various brands in bulk to third-party vendors. The B2B vertical narrowed its loss by 34% to INR 344.7 Cr in the financial year 2023-24 (FY24) from INR 615.7 Cr in the previous year. Revenue from operations declined 0.6% to INR 3,576.7 Cr during the fiscal year under review from INR 3,600.5 Cr in FY23.
Earlier in September, the Competition Commission of India (CCI) found Amazon, along with Flipkart, guilty of flouting competition laws by giving preference to certain sellers on its platform. The Enforcement Directorate (ED) also conducted raids at multiple sellers linked to Amazon India for violating foreign exchange laws.
