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Arbitration Act does not prohibit parties from obtaining relief from emergency arbitrator: Delhi High Court in Future Retail v. Amazon

SUMMARY

1. "It cannot be held that an Emergency Arbitrator is outside the control of Section 2(1)(d) of the Arbitration and Conciliation Act, because the Parliament did not accept the reference of the Law Commission to amend Section 2(1)(d) of the Arbitration and Conciliation Act to include an Emergency Arbitrators," a single judge bench at Delhi HC held in Future Retail vs Amazon.

2. It was also held that it can't block the e-commerce giant from writing to regulators opposing to the Future group's plan to sell its assets to Ambani's Reliance Industries Ltd but the board sanctioned merger was not in violation of any statutory legal provisions and both sides were free to seek support for the deal from local regulators.

3. The court also stated that prima facie, the Emergency Award limiting Future Group from going forward with the deal with Reliance Retail was not coram non judice.

4. One of the primary debates of Future Retail was that the Emergency Award passed by the arbitrator under the Singapore International Arbitration Centre (SIAC) was of no significance as it was not enforceable in the Indian regime.

5. Amazon, correspondingly stated that the parties had willingly chosen to adopt the SIAC Rules as rules of engagement. It was also argued that Part I of the Arbitration Act has no provision to disempower an Emergency Arbitrator.

6. Court here stated that it was "perfectly legal" for the revelries to choose a different procedural law, which was SIAC Rules in this case.

7. The only issue for attention in such cases is to see whether the SIAC is contrary to/ with the public policy of India or with the mandatory requirements of the procedural law under the Arbitration Act of our country.

HIGH COURT's POINT OF VIEW

1. The single bench at Delhi HC stated that it cannot be held that the provision of Emergency Arbitration under the SIAC rules are, per se, contrary to any mandatory provisions of the A&C Act.

2. The Court also noted that Amazon and Future Group companies had clearly chosen the SIAC Rules as the law governing the conduct of arbitration proceedings and the same provided for "Interim and Emergency Relief" by way of an Emergency Arbitration as well as by approaching a judicial authority.

3. Orating that the SIAC Rules, therefore, did not take away the substantive right of the parties to approach the courts in India for interim relief.

4. " .. SIAC rules self-recognize and uphold a party's right to interim relief under Section 9 of the A&C Act. Prior to the Constitution of the Tribunal, SIAC rules give the aggrieved party an option to approach the Arbitrator or aJudicial Authority for immediate relief. In the present case, the parties have left it open-eyed to seek interim relief from the Emergency Arbitrator on the one hand or to the courts under Section 9 of the A&C Act on the other. Thus, the Amazon Forum has chosen for interim relief under the Arbitration Agreement between the parties. Nothing in the A&C Act prohibits the parties from doing so.

5. After analysing the provisions of the Arbitration Act, the Court ultimately said that nothing in the Arbitration Act prohibited the contracting parties from obtaining emergency relief from an emergency arbitrator.

6. Considering that the applicability of Section 9 could be excluded in an International Commercial Arbitration under the Arbitration Act, the Court also orated that Section 9 was not a mandatory provision.

DO YOU THINK THAT COURT's DECISION WAS JUSTIFIABLE?

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