Is Emergency Arbitration Award Enforceable Under Indian Law? Amazon, Future Retail Argue In Supreme Court

"How do you get over the specific words 'and from no others' in section 37, Arbitration Act?", the Supreme Court on Wednesday asked Future Retail on its plea that its appeal before the Division Bench of the Delhi High Court was maintainable.The bench of Justices Rohinton Nariman and B. R. Gavai 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. On July 21, Amazon had raised the issue of the maintainability of the appeal filed by FRL before the Division Bench of the High Court. Senior Advocate Gopal Subramaniam, appearing for Amazon, had stated, "Section 37 provides for an appeal against an Order under Section 17(2) of the 1996 Act. This is an incompetent appeal."Section 37(1) states that an An appeal shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order, namely:- (a) refusing to refer the parties to arbitration under section 8; (b) granting or refusing to grant any measure under section 9; (c) setting aside or refusing to set aside an arbitral award under section 34.It has been FRL's case, as presented by Senior Advocate Harish Salve, that once you cross into the realm of enforcement and go into section 17(2) (any interim order issued by the arbitral tribunal under section 17(1) shall be deemed to be an order of the Court for all purposes and shall be enforceable under the CPC, in the same manner as if it were an order of the Court), the proceedings are then governed by the CPC. He had contended that under section 17(2), in any event, the court is stepping in for the first time; it is not an original power of the court but an enforcement power, and if the legislature has said that it is a part of the CPC, then it will be in accordance with the CPC. "Enforcement is a power under CPC and 37 has no role to play, absent the express bar under 37. If there is something express, only then the special statute would prevail. The most fundamental principle that no court has ever understood is that sections 36 (Where the time for making an application to set aside the arbitral award has expired, then such award shall be enforced in accordance with the CPC, in the same manner as if it were a decree of the court) and 17 bodily incorporate the CPC into the Arbitration Act. Once the arbitral proceedings come to an end and an arbitral award is passed, you cannot go back to the Arbitration Act, you come under the CPC", he had advanced. Mr. Salve had asserted that the Division Bench of the High Court had rightly appreciated that execution proceedings are not a continuation of the arbitral proceedings and that once you cross that rubicon and come into enforcement, Order 21 of the CPC (execution of decrees and orders) will apply. He had indicated that Amazon had moved the application for enforcement of the award under Order 39 Rule 2A of the CPC (consequences for breach or disobedience of injunction). "The Single Judge was clear that he was exercising powers under the CPC, the petitioners had applied under Order 39, but once the appeal was filed, it was said 'Oh, please ignore Order 39'...The plain language of the statute is such that it compels the construction that the enforcement is under the CPC and an appeal would lie. If an Order 43 appeal would lie, then these appeals are pending before the division bench.", Mr. Salve argued.On Wednesday, Senior Advocate K. V. Vishwanathan, for FRL, reiterated that their appeal under Order 43 of the CPC is to be maintainable and that to say that they are barred under section 37 is incorrect."37 has to be understood as orders under the Act. And that is how the phrase 'from no others' has to be read. It means that there has to be fulfilment of the ingredients of any of these conditions even for orders made under the Act. It is to be within the parameters laid down in these sub-clauses", Mr. Vishwanathan had advanced in response to the aforesaid query by the bench."Otherwise, it will result in an ouster of the court; it will be opposed to public policy, unless you save it within the framework of the Act. An Emergency Arbitrator is not recognised in the Act. Its orders cannot be put on a pedestal higher than that of a Court under section 9", he submitted.In his rejoinder, Mr. Subramaniam had submitted that the respondents' arguments on the maintainability of the appeal, in sum and someone substance, run foul of everything that has been said by the top court on the Arbitration Act. "What is the meaning of a self-contained code? Why is this Act called that? The answer is in the statute itself. This is a consolidating statute on arbitration. We have the common law model and the civil law model. The concept of codification itself is a civil law concept. So a code in itself has to be...

Is Emergency Arbitration Award Enforceable Under Indian Law? Amazon, Future Retail Argue In Supreme Court

Mehal Jain

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