Amazon.com NV Investment Holdings LLC v. Future Retail Ltd.
Supreme Court of India · 6 August 2021 · 2 judges
An Emergency Arbitrator's interim award under institutional rules agreed by the parties is an order under Section 17(1) of the Arbitration Act, enforceable under Section 17(2), and no appeal lies against an enforcement order under Section 17(2).
Facts
Amazon invested Rs. 1431 crore in Future Coupons Pvt. Ltd. under agreements that gave it rights over the retail assets of Future Retail Ltd. (FRL) and barred dealings with listed restricted persons, including the Mukesh Dhirubhai Ambani (Reliance) group. In August 2020 the Biyani Group agreed a transaction with that group for the amalgamation of FRL and disposal of its retail assets. Amazon started arbitration under the SIAC Rules, seated in New Delhi, and an Emergency Arbitrator injuncted the transaction. The Biyani Group called the award a nullity and went ahead. A Single Judge of the Delhi High Court, on Amazon's application under Section 17(2), held the award enforceable, found deliberate breach and issued directions under Order XXXIX Rule 2-A CPC. A Division Bench stayed these orders in FRL's appeals, and Amazon appealed to the Supreme Court.
Questions before the Court
- Whether an award of an Emergency Arbitrator under the SIAC Rules is an order under Section 17(1) of the Arbitration and Conciliation Act, 1996.
- Whether an order passed under Section 17(2) enforcing such an award is appealable, under Order XLIII Rule 1(r) CPC or Section 37 of the Act.
What the Court held
- The Act gives full party autonomy to have a dispute decided under institutional rules, which may provide for Emergency Arbitrators. Read with Sections 2(1)(a), 2(6), 2(8), 19(2) and 21, an Emergency Arbitrator's interim order is made under Section 17(1) and is enforceable under Section 17(2).
- The definition of 'arbitral tribunal' in Section 2(1)(d) applies unless the context otherwise requires. In the context of interim measures under Section 17(1), and Section 9(3), the arbitral tribunal includes an Emergency Arbitrator appointed under institutional rules.
- A party that agrees to institutional rules and takes part in emergency arbitration cannot, after losing, treat the award as a nullity or coram non judice, since nothing in the Act prohibits such an order.
- Section 37 is a complete code for appeals under the Act. Section 37(2)(b) covers only the grant or refusal of interim measures under Section 17(1), so no appeal lies against an enforcement order under Section 17(2), whether under Section 37 or Order XLIII Rule 1(r) CPC.
Why it matters
The judgment settles that emergency arbitration awards under institutional rules are recognised in India-seated arbitrations as orders under Section 17(1) and are enforceable as orders of the court under Section 17(2). It also holds that Section 37 is exhaustive and excludes appeals under Order XLIII CPC against orders made under the Arbitration Act, applying the earlier decision in BGS SGS SOMA JV v. NHPC.
In the Court's words
Copied from the official judgment; each passage links to its page.
“We, therefore, answer the first question by declaring 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 second question posed is thus answered declaring 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 heart of Section 17(1) is the application by a party for interim reliefs. There is nothing in Section 17(1), when read with the other provisions of the Act, to interdict the application of rules of arbitral institutions that the parties may have agreed to.”
“On the contrary, we have pointed out that no party, after agreeing to be governed by institutional rules, can participate in a proceeding before an Emergency Arbitrator and, after losing, turn around and say that the award is a nullity or coram non judice when there is nothing in the Arbitration Act which interdicts an Emergency Arbitrator's order from being made.”
Provisions interpreted
- Section 17, Arbitration and Conciliation Act, 1996
- Section 37, Arbitration and Conciliation Act, 1996
- Section 2(1)(a), 2(1)(d), 2(6) and 2(8), Arbitration and Conciliation Act, 1996
- Section 9(3), Arbitration and Conciliation Act, 1996
- Section 21, Arbitration and Conciliation Act, 1996
- Order XLIII Rule 1(r), Code of Civil Procedure, 1908
Related judgments
- Follows BGS SGS Soma JV v. NHPC Ltd. (2019)“This judgment is determinative of the issue before us as it specifically ruled out appeals under Order XLIII Rule 1 of the Code of Civil Procedure when it comes to orders being made under the Arbitration Act.” (page 99)
Case and bench
- Parties
- Amazon.com NV Investment Holdings LLC v. Future Retail Limited
- Case
- Civil Appeal Nos. 4492-4493 of 2021
- Decided
- 6 August 2021
- Bench
- R.F. Nariman, B.R. Gavai
- Opinions
- Unanimous. Judgment of the Court by R.F. Nariman, J.
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