'Party Autonomy One Of The Pillars Of Arbitration' : Key Takeaways From Amazon- Future Retail Judgment Of Supreme Court

The Supreme Court in its judgment in Amazon.com NV Investment Holdings LLC vs. Future Retail Limited held that an award/order by an Emergency Arbitrator would be covered by Section 17 of the Arbitration and Conciliation Act and it can be enforced under the provisions of Section 17(2). It also held that no appeal lies under Section 37 of the Arbitration Act against an order of enforcement of an Emergency Arbitrator's order made under Section 17(2) of the Act. The following are key takeaways from the judgment:There is no interdict, either express or by necessary implication, against an Emergency Arbitrator- An Emergency Arbitrator's orders, if provided for under institutional rules, would be covered by the Arbitration Act. (Para 13)Party autonomy is one of the pillars of arbitration in the Arbitration Act. (Para 14)There is nothing in the Arbitration Act that prohibits contracting parties from agreeing to a provision providing for an award being made by an Emergency Arbitrator. On the contrary, various Sections of the Act which speak of party autonomy in choosing to be governed by institutional rules would make it clear that the said rules would apply to govern the rights between the parties, a position which, far from being prohibited by the Arbitration Act, is specifically endorsed by it. (Para 17)Even interim orders that are passed by Emergency Arbitrators under the rules of a permanent arbitral institution would be included within the ambit of Section 17(1)- The words "arbitral proceedings" are not limited by any definition and thus encompass proceedings before an Emergency Arbitration. (Para 19)Section 9(3) and Section 17 form part of one scheme- An "arbitral tribunal" as defined under Section 2(1)(d) would not apply and the arbitral tribunal spoken of in Section 9(3) would be like the "arbitral tribunal" spoken of in Section 17(1) which would include an Emergency Arbitrator appointed under institutional rules. (Para 20)Mere fact that a recommendation of a Law Commission Report is not followed by Parliament, would not necessarily lead to the conclusion that what has been suggested by the Law Commission cannot form part of the statute as properly interpreted.The introduction of Sections 9(2) and 9(3) would show that the objective was to avoid courts being flooded with Section 9 petitions when an arbitral tribunal is constituted for two good reasons – (i) that the clogged court system ought to be decongested, and (ii) that an arbitral tribunal, once constituted, would be able to grant interim relief in a timely and efficacious manner. (Para 32)A party cannot be heard to say, after it participates in an Emergency Award proceeding, having regard to institutional rules made in that regard, that thereafter it will not be bound by Emergency Arbitrator's ruling.Full party autonomy is given by the Arbitration Act to have a dispute decided in accordance with institutional rules which can include Emergency Arbitrators delivering interim orders, described as "awards". Such orders are an important step in aid of decongesting the civil courts and affording expeditious interim relief to the parties. Such orders are referable to and are made under Section 17(1) of the Arbitration Act. (Para 41)There is a vast difference between enforcement of orders passed under Order XXXIX, Rules 1 and 2 and orders made in contempt of court. Orders which are in contempt of court are made primarily to punish the offender by imposing a fine or a jail sentence or both. On the other hand, Order XXXIX, Rule 2-A is primarily intended to enforce orders passed under Order XXXIX, Rules 1 and 2, and for that purpose, civil courts are given vast powers which include the power to attach property, apart from passing orders of imprisonment, which are punitive in nature. (Para 50)When an order for permanent injunction is to be enforced, Order XXI, Rule 32 provides for attachment and/or detention in a civil prison. Orders that are passed under Order XXI, Rule 32 are primarily intended to enforce injunction decrees by methods similar to those contained in Order XXXIX, Rule 2-A. This also shows the object of Order XXXIX, Rule 2A is primarily to enforce orders of interim injunction. (Para 50)It is one thing to say that the power exercised by a court under Order XXXIX, Rule 2-A is punitive in nature and akin to the power to punish for civil contempt under the Contempt of Courts Act, 1971. It is quite another thing to say that Order XXXIX, Rule 2-A requires not "mere disobedience" but "wilful disobedience". We are prima facie of the view that the latter judgment [U.C. Surendranath v. Mambally's Bakery, (2019) 20 SCC 666 ] in adding the word "wilful" into Order XXXIX, Rule 2-A is not quite correct and may require to be reviewed by a larger Bench. (Para 50)The expression "in relation to", which occurs in both Section 9(1) and Section 17(1), is an expression which is comprehensive in nature, having both a direct as well as an indirect significance- The...

'Party Autonomy One Of The Pillars Of Arbitration' : Key Takeaways From Amazon- Future Retail Judgment Of Supreme Court

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