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Amazon.com NV Investment Holdings LLC Vs Future Retail Limited & Ors.: Order U/S 17(2) Enforcing Emergency Arbitrator's Award Is Not Appealable U/S 37

Megha Bindal ,
  11 August 2021       Share Bookmark

Court :
The Supreme Court of India
Brief :
Amazon.com NV Investment Holdings LLC's filed an appeal which was disposed of by a Division Bench of Justice RF Nariman and Justice BR Gavai. The Court held that an order under Section 17(2) of the Arbitration and Conciliation Act for enforcing Emergency Arbitrator's award is not appealable under Section 37.
Citation :
ICL 2021 (8) SC 778


Date of Judgment:
06/08/2021

Judges:
Hon'ble Justice RF Nariman
Hon’ble Justice BR Gavai

Parties to the case:
Amazon.com NV Investment Holdings LLC (APPELLANT)
Future Retail Limited & ORS. (RESPONDENTS)

Overview

  • Amazon.com NV Investment Holdings LLC initiated proceedings in the Delhi High Court. The procedures were launched per Section 17(2) of the Arbitration Act, with an appeal to enforce the award/order dated October 25, 2020.
  • The seat for the arbitral proceedings was in New Delhi, and SIAC Rules were decided to be applicable, as per the arbitral clause agreed by the Parties.
  • Mr. V.K. Rajah, SC, is the Emergency Arbitrator who passed the "interim award." Following that, the Biyani Group (Respondents) claimed that the award was null and the Emergency Arbitrator was "coram non-judice."
  • Meanwhile, Amazon filed an application under Section 17(2) of the Arbitration Act, which was heard and decided by a Delhi High Court Single Judge.
  • The learned Single Judge issued a status-quo order on February 2, 2021, stating that the award by the Emergency Arbitrator is an "Order" under Section 17(1), Arbitration Act.
  • However, the Division bench stayed the order of the Single Bench, and the stay order was questioned in the Supreme Court.

Issues

  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 and Conciliation Act, 1996 ["Arbitration Act"];
  2. Whether an order passed under Section 17(2) of the Arbitration Act in the Enforcement of the award of an Emergency Arbitrator by a learned Single Judge of the High Court is appealable.

Legal Provisions

  • Section 9, the Arbitration and Conciliation Act, 1996 : Section 9 confers powers on the adjudicating authority or the arbitral tribunal, providing interim measures such as sale of goods or interim custody, as a means of protection. It can not only issue orders to help parties secure disputed sums but the Section confers power on the tribunals to issue a temporary restraining order or appoint a receiver or guardian too.
  • Section 17, the Arbitration and Conciliation Act, 1996 : Section 17 of the Act applies when the arbitral tribunal has been formed, and before an award has been issued. Earlier, the tribunals had power to issue any interim measure but after the 2015 amendment, these powers were restricted.
  • Section 36, the Arbitration and Conciliation Act, 1996 : Section 36 provides that once the time prescribed for making an application to set aside an award has expired or the application has been refused under Section 34 of this Act, the arbitral award shall be treated as a decree passed by the court.
  • Section 37, the Arbitration and Conciliation Act, 1996 : Section 37 states of the provisions regarding appeals under this Act. This Section provides for appeals against orders and not awards.
  • Order XXXIX, Rule 2A, the Code of Civil Procedure, 1908 : The Rule 2A provides for the procedure against a person whenever there is a case of disobedience of any injunction made or any breach of such injunction.
  • Order XLIII, Rule 1(r), the Code of Civil Procedure, 1908 : Order XLIII, CPC, states all the orders that are appealable, hence, Rule 1(r) states that any order under Rule 1, Rule 2, Rule 2A, Rule 4 or Rule 10 of Order XXXIX are appealable.

Judgment Analysis

  • After considering all the arguments by the learned counsels, relevant legal provisions, and case laws, the Apex Court disposed of the appeal.
  • While deciding for the first issue, the Bench referred to the fact that once a party has agreed to move in accordance with the institutional rules, they cannot question an orders' validity if they lose.
  • The Court stated that there is no provision in the Act prohibiting an order made by an Emergency Arbitrator.
  • The Division Bench stated that the Arbitration and Conciliation Act provides full autonomy regarding the decision of the matter to the parties.
  • Therefore, this autonomy also includes the provision of "interim orders" to be declared by Emergency Arbitrators. Also, such orders can be treated as "awards" under Section 17(1), Arbitration Act.
  • While answering the second issue, the Court considered the question that was contented on the 2015 amendment of the Act. The Court stated that the amendment infused a new category of appeals, 1(a), under Section 37 of the Act.
  • The Court was also of the view that the amendment of 2015 has not brought the provisions regarding grant of measures under Section 9 in line with Order XLIII, Rule 1(r), under Section 37(1)(b).
  • However, after comparing Section 9, Section 17(1) and Section 37, the Court opined that the appeal provision could not cover enforcement proceedings.
  • The Bench, after full consideration, held that any appeal made against an order of Enforcement of the order given by the Emergency Arbitrator could not be entertained under Section 37 of the Arbitration Act.

Conclusion

In conclusion, the Division Bench finally disposed of all the appeals. Also, it stated that the interim orders passed by the Court must stay vacated. The Court opined that the orders made under Section 17 play an important role in aiding the civil courts and providing interim relief to the parties. The Court also added that Section 34 is complete as long as appeals and orders are considered.

Click here to download the original copy of the judgement

 
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