The NCLAT rejected Multiple Brand Solutions’ contention, saying that the vendor’s claim for payment of invoices was “disputed much before demand notice was issued”
Multiple Brand Solutions sought to initiate bankruptcy proceedings against Amazon Wholesale (India) over alleged default of INR 3.7 Cr between March 2023 and May 2023
Earlier, the Delhi bench of the NCLT also rejected the vendor’s contention, following which Multiplier Brand Solutions moved the Appellate Tribunal
The National Company Law Appellate Tribunal (NCLAT) has dismissed a plea that sought to initiate insolvency proceedings against Amazon Wholesale (India).
Setting aside the petition filed by Multiplier Brand Solutions, a three-member Delhi bench of the Appellate Tribunal upheld the previous order passed by the National Company Law Tribunal (NCLT), which also dismissed the same plea.
Multiplier Brand Solutions sought to initiate bankruptcy proceedings against the ecommerce major’s B2B arm over alleged default of INR 3.7 Cr under Section 9 of the Insolvency & Bankruptcy Code.
The NCLAT rejected the applicant’s contention, saying the vendor’s claim for payment of invoices was “disputed much before demand notice was issued”.
“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,” the Appellate Tribunal said in its order.
Multiplier Brand Solutions claims to offer field marketing solutions for businesses. The vendor had entered into a “novation and substitution agreement” with Amazon Seller Services and Amazon Wholesale (India) in 2021 to offer manpower and other allied services for its Amazon Device Project.
Multiple Brand Solutions raised eight invoices to the tune of INR 3.7 Cr between March 2023 and May 2023. However, the amount was disputed by Amazon, citing allegations of fake data submitted by the firm in connection with a separate project.
Eventually, Multiplier Brand Solutions claimed default over the said invoices and approached the Delhi bench of the NCLT with an insolvency plea. Arguing before the Tribunal, Amazon contended that there was an existing dispute regarding the amount claimed by Multiplier Brand Solutions before the issuance of the demand notice.
Agreeing to the contention, the NCLT ruled in favour of Amazon and rejected the plea. The Tribunal, however, added that it was not expressing any opinion on entitlement or the claim raised by the petitioner against the ecommerce major. Following this, Multiplier Brand Solutions moved the Appellate Tribunal in April this year to challenge the NCLT’s order.
It is pertinent to note that Amazon Wholesale (India) is the B2B arm of the ecommerce major and supplies 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.
The NCLAT order comes as a major relief for Amazon, which has been bogged down by heavy regulatory scrutiny in the country lately. In September, the Competition Commission of India (CCI) found the US-based ecommerce giant, along with Flipkart, guilty of flouting competition laws by giving preference to certain sellers on its platform.
Thereafter, the Enforcement Directorate (ED) also conducted raids at multiple sellers linked to Amazon India for violating foreign exchange laws.
