India: Caveat by Walmart

October 1, 2018


In the modern world, changes take place every moment and business houses face difficulties of various sorts. This often leads to corporate restructuring by recourse to options such as mergers and acquisitions. The bigger sharks in the industry try to engulf the smaller entities creating a huge impact in the market.

India is witnessing number of takeovers. A recent one being the acquisition of Flipkart by Walmart via a $16 billion deal and acquisition of 77% stakes on August 18, 2018. The said transaction has been approved by the Competition Commission of India, being in conformity with the provisions of the Competition Act, 2002.

However, this takeover has been opposed by the Confederation of All India Traders (hereinafter referred to as “CAIT”) and the Swadeshi Jagran Manch (hereinafter referred to as “SJM”). The issues being raised include violation of the Foreign Direct Investment policies and offering of heavy discounts to customers.

In order to prevent any legal action taken by CAIT or SJM against Walmart, the Big Shark has taken legal recourse and filed a caveat in the Delhi High Court. Filing of a caveat, a latin term which means ‘let a person beware’, ensures that the Court shall accord an opportunity of fair hearing, to the filing party, before deciding on the matter brought before the Court. Under the Indian legal regime, a caveat can be filed in accordance with the provisions of Section 148A of Civil Procedure Code, 1908.

The filing of the caveat by Walmart is indicative of its cautious approach against any probable legal action that may be initiated against it.

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