Key Judicial Elucidations: Amazon v. Future Retail Limited & Ors.

16th August, 2021 - 12:55 pm Categories: Legal Issues 0 Comments

The Hon’ble Supreme Court of India settled the question of enforceability of a foreign arbitral award in Amazon.com NV Investment Holdings LLC v. Future Retail Limited and Ors. The Apex Court held that an award delivered by an emergency arbitrator under the rules of a foreign seated arbitration is an Order under Section 17(1) of the Act. Further, it was held that no appeal lies under Section 37 against an Order of enforcement of emergency arbitrator’s Award/Order made under Section 17(2) of the Act.

The key elucidations from this judgement are as under:

• Upon perusal of Sections 2(6), 2(8), 19 and the definitions of “arbitration”, “arbitral award” and “arbitral tribunal” under the Act, it is evident that arbitral proceedings are to be administered by a permanent arbitral institution. The parties have the right to authorize any person/institution to determine disputes that arise between them, the right to mutually decide the procedure to be followed by an arbitral tribunal in conducting their arbitral proceedings and party autonomy extends to an agreement which includes being governed by arbitration rules. Therefore, the aforementioned provisions read together along with the absence of an expressed/implied interdict against an emergency arbitrator shows that an emergency arbitrator’s award, if delivered under institutional rules, would be covered by the Act.
• “Arbitral tribunal” refers to one that is constituted by the parties that can give interim and final relief ‘given the scheme of the Act’ ‘unless the context otherwise requires’. Moreover, “arbitration” refers to any arbitration, whether administered by a permanent arbitral institution or not, which when read with Sections 2(6) and 2(8), includes within the scope of Section 17(1) an emergency arbitrator’s interim award delivered under the rules of a permanent arbitral institution. “Arbitral proceedings” are not restricted by the Act and, thus, include the proceedings before an emergency arbitrator with reference to Section 21 of the Act.
• Section 17(1) enables parties to claim interim reliefs and does not interdict the application of arbitral institutional rules that the parties have agreed to. Therefore, when such institutional rules apply, emergency arbitrators are included. The same principle applies to Section 9(3) which precludes the court from entertaining any interim relief application after the constitution of an arbitral tribunal unless the court opines that the circumstances may not render the remedy provided under Section 17 efficient. Therefore, since Sections 9 and 17 are part of the same scheme, the “arbitral tribunal” referred to in Section 17 will apply to Section 9 and not as defined under Section 2, thereby including emergency arbitrators appointed under institutional rules.
• While Section 17(2) is meant solely for enforcing Interim Orders passed by arbitral tribunals as a decree of the court, to make such Orders appealable under the CPC would be ‘a big leap not envisaged by the legislature’. Moreover, it is the enforcement mechanism that is akin to that of a decree but the award itself is not a decree of a civil court.
• Section 50 provides an appeal in arbitration cases of enforcement of foreign awards. Appeals that are not mentioned therein are not permissible.

The Hon’ble Supreme Court, in this judgement, has made significant strides that will aid in the much-needed advancement of Indian arbitration law. The Court restricted an application to enforce a foreign award to the Act and thereby highlighted that the Act is a code in itself vis-à-vis arbitration at a national and international scale. While this judgement provides pertinent clarifications on gaps in the prevailing Indian arbitration regime, the Court also clarified and further developed the nascent emergency arbitrator mechanism in India. Therefore, this judgement is a timely and vital contribution to existing literature and prevailing authorities on the subject.

Author: Deeksha Prakash, a student of Symbiosis Law School (Hyderabad), intern at Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at vidushi@khuranaandkhurana.com.