Emergency Arbitration Award Enforceable In Indian Law : Supreme Court Rules In Favour Of Amazon In Case Against Future Retail [Updated With Judgment]

The Supreme Court on Friday ruled in favour of e-commerce giant Amazon in its dispute with Future Retail Limited(FRL) over the latter's merger deal with Reliance group. The top court held that that Emergency Award passed by Singapore arbitrator stalling FRL-Reliance deal is enforceable in Indian law. "We have framed 2 questions and answered them. Emergency arbitrator's award holds good under Section 17(1) of the Arbitration and Conciliation Act and single Judge's order for such award cannot be appealed under Section 37(2)". Justice Nariman read out the operative portion of the judgment in the court today morning at 10.30 AM. "It is wholly incorrect to say that Section 17(1) of the Act would exclude an Emergency Arbitrator's orders", the Court said in the judgment. "We declare that 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", the Court stated in paragraph 41 of the judgment.This means that the Supreme Court has approved the enforcement of the the Singapore Emergency Arbitrator (EA) award, passed at the instance of Amazon, restraining the Rs 24,731 crore amalgamation deal between Future Retail and Reliance Industries Group(Mukesh Dirubhai Ambani Group).Also, the top court has upheld the order of the single bench of the Delhi High Court which had ruled in favour of the enforcement of the Emergency Award and has held that single judge's order was not appealable to the division bench of the High Court under Section 37(2) of the Arbitration Act.A bench comprising Justices RF Nariman and BR Gavai had reserved judgment on July 29 after extensively hearing the arguments led by Senior Advocates Gopal Subramanium for Amazon and Harish Salve for FRL(Case Title : Amazon.Com NV Investment Holdings vs Future Retail Ltd and others) . Amazon had 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. Main issues raised by the parties :The main issues which were raised by the parties before the Supreme Court were :Whether Emergency Arbitration Award is recognized under the Arbitration and Conciliation Act and whether it is enforceable under Indian law.Whether Amazon's arbitration agreement with Future Coupons Private Ltd(FCPL) will bind Future Retail Limited and its promoters Biyanis. Can 'group of companies' doctrine applied to bind FRL with the arbitration agreement?Whether FRL's appeal before High Court division bench is maintainable, as Section 37 of the Arbitration Act does not provide for appeal against an order allowing enforcement of emergency award, and whether such appeal could be maintained under provisions of the Civil Procedure Code.How the Supreme Court decided?Two issues were decided in the appeal :(1) whether an "award" delivered by an Emergency Arbitrator under the Arbitration Rules of the Singapore International Arbitration Centre ["SIAC Rules"] can be said to be an order under Section 17(1) of the Arbitration Act; and (2) whether an order passed under Section 17(2) of the Arbitration Act in enforcement of 1 the award of an Emergency Arbitrator by a learned Single Judge of the High Court is appealable.The judgment authored by Justice Nariman noted that the Arbitration Act has no express or implied bar against Emergency Arbitration.Sections 2(8) and 19(2) give "party autonomy" to agree on the procedure to be followed by an arbitral tribunal in conducting its proceedings. In the instant case, the parties had agreed to follow the Singapore International Arbitration Centre(SIAC) Rules. Under the SIAC Rules, the date of receipt of the complete Notice of Arbitration by the Registrar of SIAC shall be deemed to be the date of commencement of the arbitration"This being the case, when Section 17(1) uses the expression "during the arbitral proceedings", the said expression would be elastic enough, when read with the provisions of Section 21 of the Act, to include emergency arbitration proceedings, which only commence after receipt of notice of arbitration by the Registrar under Rule 3.3 of the SIAC Rules as aforesaid", the Court said." A conjoint reading of these provisions coupled with there being no interdict, either express or by necessary implication, against an Emergency Arbitrator would show that an Emergency Arbitrator's orders, if provided for under institutional rules, would be covered by the Arbitration Act", Justice Nariman said in the judgment.Senior...

Emergency Arbitration Award Enforceable In Indian Law : Supreme Court Rules In Favour Of Amazon In Case Against Future Retail [Updated With Judgment]

Manu Sebastian

"It is wholly incorrect to say that Section 17(1) of the Act would exclude an Emergency Arbitrator's orders", the Court said in the judgment.

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