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Emergency Award Is Not An Order Under Section 17 Of Arbitration Act : Future Retail In Supreme Court

Srishti Ojha
22 July 2021 4:17 PM GMT
Emergency Award Is Not An Order Under Section 17 Of Arbitration Act : Future Retail In Supreme Court
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Responding to Amazon's arguments, Senior Advocate Harish Salve made submissions on behalf of Future Retail Ltd in the dispute over the Emergency Arbitration Award passed by a Singapore Tribunal halting the FRL's deal with Reliance.
Salve rebutted the argument of Amazon that the appeal filed by FRL before the division bench of the Delhi High Court was not maintainable. He stated that this question involves primarily the construction of Section 37 of the Arbitration Act to see if 37(1) excludes appeals under Order 43 of the CPC. He stated that they are in a position where no one has argued or decided if FRL's appeal was maintainable.

FRL Not party to Arbitration agreement :

Mr Salve submitted that there was an order of Enforcement Directorate granting injunctions, and suit was filed by FRL on basis that there is no Arbitration agreement to which FRL is a party with Amazon and Amazon is wrongly insisting that FRL's entering into a deal with Reliance was a breach of FRL SHA.

"We said if I'm breaching agreement to which I'm a Party I may be liable. I filed a suit to injnuct Amazon from tortuous interference by wrongfully representing that i had breached my SHA(Share Holding Agreement)." he said.

Status of Emergency Arbitrator under Indian Arbitration Act:

Salve submitted that he doesn't need to take an extreme position that Emergency Arbitrator's award is in nullity. In the issues of enforcement and for maintainability, it is enough to say that Emergency Arbitrator's order is not an order under Section 17 of the Arbitration Act. The order may be an order and will have same status as orders of tribunal had prior to insertion of Section 17(2). He clarified that he is not not opening the larger issue if you can have Emergency Arbitrator or not but only arguing on party autonomy if you have signed for SIAC and set of rules. He said that he accepts that parties can agree to an Emergency Arbitrator but immediate conclusion that order of Emergency Arbitrator is an order under Section 17 is wrong.

Section 37 doesn't exclude appeals in course of execution:

Mr Salve submitted that what Section 37 bars is any attempt to go behind the award or any attempt to go behind an order under section 17. Post award or post order proceedings commence under CPC, and may take twists and turns.

"I'm not challenging order of Emergency Arbitrator before Division Bench. I have to take order of Emergency Arbitrator at face value, the only caveat there is can we argue the order is in nullity", he said.

A Bench headed by Justice Rohinton F. Nariman was hearing Amazon's challenge to an order dated March 22 passed by a Division Bench of the Delhi High Court staying a Single-Judge order which had upheld the Emergency Award passed by a Singapore Tribunal halting the Reliance-Future deal worth Rs. 24,713 crores.

The hearing will continue on July 27.


WHAT HAS HAPPENED TILL NOW?

Amazon has moved the Supreme Court challenging an
order dated March 22 passed by a Division Bench of the Delhi High Court
staying a single-judge order which had directed upheld the Emergency Award passed by a Singapore Tribunal halting the Reliance-Future deal.

On April 19, the Supreme Court said that it will stay the proceedings in the High Court and will hear the matter.

A Single-Judge Bench of Justice Midha of the Delhi High Court had earlier allowed the Application field by Amazon to enforce the emergency award against the Future-Reliance deal.

The Judge had held that the Emergency Arbitrator is an arbitrator for all the intents and purposes under Section 17(1) of Arbitration and Conciliation Act and an order passed by such an emergency arbitrator is enforceable under Section 17 (2) of the Act.

It was also held that the Respondent Future Group has raised a vague plea of nullity without substantiating the same. Moreover, the Court went ahead to state that the Petitioner's (Amazon.com) investment does not violate any law. In view of this, the Court rejected the contentions of the Future Retail Group with a cost of Rs. 20 lakhs to be deposited in PM Cares Fund of COVID-19 to be used for vaccination of senior citizens belonging to the Below Poverty Line group. The Court ordered the same to be deposited within 2 weeks and the same shall be put on record within 1 week thereafter.

On March 22, a Division Bench comprising Chief Justice DN Patel and Justice Jasmeet Singh stayed the single bench order on appeal by Future Group.

Amazon had earlier moved the Supreme Court against an interim order of the Delhi High Court Division Bench which had stayed the status quo ordered by the single bench in December last year on Future-Reliance deal.

In that case, a Bench headed by Justice RF Nariman of Supreme Court had barred the NCLT from sanctioning scheme of merger of Reliance-Future companies, while allowing the continuation of the proceedings before the Tribunal.





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