Delhi High Court to Hear: Amazon's Plea Challenging Enforcement Directorate's Jurisdiction to Explore Matters Beyond Its Power under FEMA, January 2022

Delhi High Court to Hear: Amazon's Plea Challenging Enforcement Directorate's Jurisdiction to Explore Matters Beyond Its Power under FEMA, January 2022

On January 5, 2022, the Delhi High Court will hear the appeal filed by Amazon Wholesale India Private Limited India challenging the jurisdiction of the Directorate of Enforcement and its officers to investigate it for matters that are outside the scope of the Foreign Exchange Management Act.

There was a hearing scheduled for today before a single bench of Justice Rekha Palli, but she couldn't attend as she was on leave.

Amazon Wholesale India Private Limited has called it a fishing and roving investigation, claiming that the Enforcement Directorate has issued various summons to its employees that are completely unrelated to the investigation.

Its stated that the ED had required, some of them, legal advice and privileged legal opinions that were received from time to time by Indian subsidiaries of Amazon.com, Inc in India.

Regarding the dispute between Amazon NV and Future Group, the plea states that Amazon India received a directive from the ED asking for information about the arbitration and about other matters that were already being investigated by the Bangalore Regional Office of ED.

The petitioner argued that ten of the 16 documents sought in the Directive related to the transaction with the Future Group and Amazon NV and not with Amazon India and Amazon Seller Services Private Limited.

Consequently, it was submitted that the said Directive was addressed to and received by Amazon India, which had no connection whatsoever with the Future Group or Amazon NV's investment in the Future Group.

According to the summons, though the investigation concerns only the Future Group, EE is seeking data regarding legal fees paid in the past 10 years by another number of entities unrelated to the Future transaction. In this regard, it should be noted that the Future Group is only involved in the Amazon transaction in 2019. These questions, along with other documents sought by EE, indicate a fishing and roving investigation, according to the plea.

Therefore, the plea requests the cancellation of the Directive dated 19th February 2021, as well as all other proceedings commenced by ED in the matter.

In addition, the petition prayed that ED refrains from conducting a fishing and roving inquiry in matters related to legal privilege and not seek information that fell outside FEMA's purview.