# AMAZON.COM NV INVESTMENT HOLDINGS LLC v. FUTURE RETAIL LIMITED & ORS

- **Citation:** [2021] 4 S.C.R. 771
- **Court:** Supreme Court of India
- **Decided:** 2021-08-06
- **Case number:** Civil Appeal Nos. 4492-4493 of 2021
- **Bench:** R. F. Nariman, B. R. Gavai
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/amazon-com-nv-investment-holdings-llc-v-future-retail-limited-ors-35251
- **Pages:** 91

## Headnote

Arbitration and Conciliation Act, 1996:
ss. 17(1) and (2) - Interim measures ordered by arbitral
tribunal - "Award" by Emergency Arbitrator under the Arbitration
Rules of the Singapore International Arbitration Centre - Seat of
arbitral proceedings in India and governed by SIAC Rules - Said
award, if an order u/s. 17(1) - Held: Award by Emergency Arbitrator
under SIAC Rules can be said to be an order u/s. 17(1) - 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 aid of decongesting the civil courts and affording expeditious
interim relief to the parties - Such orders are referable to and are
made u/s. 17(1) -Arbitration Rules of the Singapore International
Arbitration Centre.
s. 37 - Appealable orders - Order passed u/s. 17(2) in
enforcement of the award of an Emergency Arbitrator by Single
Judge of the High Court - Appeal thereagainst u/s. 37 - Held: No
appeal lies u/s. 37 against an order of enforcement of an Emergency
Arbitrator's order made u/s. 17(2) of the Act.
Arbitration Rules of the Singapore International Arbitration
Centre: r. 1.3 - Term Emergency arbitration - Explanation of -
Held: Reading of the SIAC Rules indicates that even before an
arbitral tribunal is constituted under the Rules, urgent interim reliefs
can be granted by an "Emergency Arbitrator" -An Emergency
Arbitrator as defined by r. 1.3 means an arbitrator in accordance
with paragraph 3 of Schedule 1 - Emergency Arbitrator has all the
powers vested in the arbitral tribunal pursuant to SIAC Rules,
including the authority to rule on his own jurisdiction - Emergency
Arbitrator has the power to order such interim relief that he deems
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necessary, and is to give summary reasons for his decision in writing
- Once the arbitral tribunal is constituted under paragraph 10, the
tribunal may reconsider, modify, or vacate any such interim order -
Such interim order or award issued by the Emergency Arbitrator
would continue to bind the parties unless it is modified or vacated
by the arbitral tribunal, once it is constituted, until the tribunal
makes a final award or until the claim is withdrawn.
Code of Civil Procedure, 1908: Ord XLIII, r. 1(r) - Appeals
from orders - Maintainbility of appeal under Ord. XLIII, r. 1(r),
when enforcement order of the award of an Emergency Arbitrator
made under Arbitration Act - Explained.
Disposing of the appeals, the Court
HELD: 1.1 A reading of sections 2(6), 2(8), 19(2) and 21 of
the Arbitration and Conciliation Act, 1996 would show that an
arbitration proceeding can be administered by a permanent
arbitral institution. Importantly, Section 2(6) makes it clear that
parties are free to authorise any person including an institution
to determine issues that arise between the parties. Also, under
Section 2(8), party autonomy goes to the extent of an agreement
which includes being governed by arbitration rules referred to in
the aforesaid agreements. Likewise, under Section 19(2), parties
are free to agree on the procedure to be followed by an arbitral
tribunal in conducting its proceedings. Section 21 provides that
arbitral proceedings in respect of a particular dispute commence
on the date on which a request for that dispute to be referred to
arbitration is received by the respondent. This Section is
expressly subject to agreement by the parties. [Paras 11, 12]
[801-E-H]
1.2 By agreeing to the application of the Arbitration Rules
of the Singapore International Arbitration Centre (SIAC Rules),
the arbitral proceedings in the instant case can be said to have
commenced from the date of receipt of a complete notice of
arbitration by the Registrar of the SIAC, which would indicate
that arbitral proceedings under the SIAC Rules commence much
before the constitution of an arbitral tribunal under the said Rules.
This being

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AMAZON.COM NV INVESTMENT HOLDINGS LLC
v.
FUTURE RETAIL LIMITED & ORS.
(Civil Appeal Nos. 4492-4493 of 2021)
AUGUST 06, 2021
[R. F. NARIMAN AND B. R. GAVAI, JJ.]
Arbitration and Conciliation Act, 1996:
ss. 17(1) and (2) - Interim measures ordered by arbitral
tribunal - "Award" by Emergency Arbitrator under the Arbitration
Rules of the Singapore International Arbitration Centre - Seat of
arbitral proceedings in India and governed by SIAC Rules - Said
award, if an order u/s. 17(1) - Held: Award by Emergency Arbitrator
under SIAC Rules can be said to be an order u/s. 17(1) - 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 aid of decongesting the civil courts and affording expeditious
interim relief to the parties - Such orders are referable to and are
made u/s. 17(1) -Arbitration Rules of the Singapore International
Arbitration Centre.
s. 37 - Appealable orders - Order passed u/s. 17(2) in
enforcement of the award of an Emergency Arbitrator by Single
Judge of the High Court - Appeal thereagainst u/s. 37 - Held: No
appeal lies u/s. 37 against an order of enforcement of an Emergency
Arbitrator's order made u/s. 17(2) of the Act.
Arbitration Rules of the Singapore International Arbitration
Centre: r. 1.3 - Term Emergency arbitration - Explanation of -
Held: Reading of the SIAC Rules indicates that even before an
arbitral tribunal is constituted under the Rules, urgent interim reliefs
can be granted by an "Emergency Arbitrator" -An Emergency
Arbitrator as defined by r. 1.3 means an arbitrator in accordance
with paragraph 3 of Schedule 1 - Emergency Arbitrator has all the
powers vested in the arbitral tribunal pursuant to SIAC Rules,
including the authority to rule on his own jurisdiction - Emergency
Arbitrator has the power to order such interim relief that he deems
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necessary, and is to give summary reasons for his decision in writing
- Once the arbitral tribunal is constituted under paragraph 10, the
tribunal may reconsider, modify, or vacate any such interim order -
Such interim order or award issued by the Emergency Arbitrator
would continue to bind the parties unless it is modified or vacated
by the arbitral tribunal, once it is constituted, until the tribunal
makes a final award or until the claim is withdrawn.
Code of Civil Procedure, 1908: Ord XLIII, r. 1(r) - Appeals
from orders - Maintainbility of appeal under Ord. XLIII, r. 1(r),
when enforcement order of the award of an Emergency Arbitrator
made under Arbitration Act - Explained.
Disposing of the appeals, the Court
HELD: 1.1 A reading of sections 2(6), 2(8), 19(2) and 21 of
the Arbitration and Conciliation Act, 1996 would show that an
arbitration proceeding can be administered by a permanent
arbitral institution. Importantly, Section 2(6) makes it clear that
parties are free to authorise any person including an institution
to determine issues that arise between the parties. Also, under
Section 2(8), party autonomy goes to the extent of an agreement
which includes being governed by arbitration rules referred to in
the aforesaid agreements. Likewise, under Section 19(2), parties
are free to agree on the procedure to be followed by an arbitral
tribunal in conducting its proceedings. Section 21 provides that
arbitral proceedings in respect of a particular dispute commence
on the date on which a request for that dispute to be referred to
arbitration is received by the respondent. This Section is
expressly subject to agreement by the parties. [Paras 11, 12]
[801-E-H]
1.2 By agreeing to the application of the Arbitration Rules
of the Singapore International Arbitration Centre (SIAC Rules),
the arbitral proceedings in the instant case can be said to have
commenced from the date of receipt of a complete notice of
arbitration by the Registrar of the SIAC, which would indicate
that arbitral proceedings under the SIAC Rules commence much
before the constitution of an arbitral tribunal under the said Rules.
This being the case, when Section 17(1) uses the expression
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"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. 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. [Paras 12, 13][802-C-F]
Antrix Corporation Ltd. v. Devas Multimedia Pvt. Ltd.
(2014) 11 SCC 560 : [2013] 6 SCR 453; Bharat
Aluminium Co. v. Kaiser Aluminium Technical Services
Inc. (2016) 4 SCC 126 : [2016] 1 SCR 364; PASL Wind
Solutions Pvt. Ltd. v. GE Power Conversion India Pvt.
Ltd. 2021 SCC OnLine SC 331; National Highways
Authority of India v. M. Hakeem 2021 SCC OnLine
SC 473 - referred to.
1.3 The parties to the contract, in the instant case, by
agreeing to the SIAC Rules and the award of the Emergency
Arbitrator, have not bypassed any mandatory provision of the
Arbitration Act. There is nothing in the Arbitration Act that
prohibits contracting parties from agreeing to a provision
providing for an award being made by an Emergency Arbitrator.
On the contrary, when properly read, various Sections of the Act
which speak of party autonomy in choosing to be governed by
institutional rules would make it clear that the said rules would
apply to govern the rights between the parties, a position which,
far from being prohibited by the Arbitration Act, is specifically
endorsed by it. [Para 17][807-G-H; 808-A-B]
Centrotrade Minerals & Metal Inc. v. Hindustan Copper
Ltd.
(2017) 2 SCC 228:[2016] 9 SCR 83 -
distinguished.
1.4 There can be no doubt that the "arbitral tribunal" as
defined in Section 2(1)(d) speaks only of an arbitral tribunal that
is constituted between the parties and which can give interim
and final relief, "given the scheme of the Act", as contained in
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the aforementioned Sections. However, like every other definition
section, the definition contained in Section 2(1)(d) only applies
"unless the context otherwise requires". Given that the definition
of "arbitration" in Section 2(1)(a) means any arbitration, whether
or not administered by a permanent arbitral institution, when read
with Sections 2(6) and 2(8), would make it clear that even interim
orders that are passed by Emergency Arbitrators under the rules
of a permanent arbitral institution would, on a proper reading of
Section 17(1), be included within its ambit. It is significant to
note that the words "arbitral proceedings" are not limited by any
definition and thus encompass proceedings before an Emergency
Arbitrator with reference to Section 21 of the Act read with the
SIAC Rules. [Para 19][808-F-H; 809-A]
1.5 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. This being the position, at least insofar as Section 17(1) is
concerned, the "arbitral tribunal" would, when institutional rules
apply, include an Emergency Arbitrator, the context of Section
17 "otherwise requiring"-the context being interim measures
that are ordered by arbitrators. The same object and context
would apply even to Section 9(3) which makes it clear that the
court shall not entertain an application for interim relief once an
arbitral tribunal is constituted unless the court finds that
circumstances exist which may not render the remedy provided
under Section 17 efficacious. Since Section 9(3) and Section 17
form part of one scheme, it is clear that an "arbitral tribunal" as
defined under Section 2(1)(d) would not apply and the arbitral
tribunal spoken of in Section 9(3) would be like the "arbitral
tribunal" spoken of in Section 17(1) which would include an
Emergency Arbitrator appointed under institutional rules.
[Para 20][809-B-E]
Firm Ashok Traders v. Gurumukh Das Saluja (2004) 3
SCC 155:[2004] 1 SCR 404 - referred to.
1.6 Even if section 25.2 of the FCPL Shareholders'
Agreement (pari materia with section 15.2 of the FRL
Shareholders' Agreement) makes the SIAC Rules subject to the
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Arbitration Act, the said Act, properly construed, would include
an Emergency Arbitrator's awards/orders, there being nothing
inconsistent in the SIAC Rules when read with the Act. Rule 1.3
of the SIAC Rules indicates that an award of an Emergency
Arbitrator is included within the ambit of these Rules, and that
an Emergency Arbitrator, as defined, means an arbitrator
appointed in accordance with paragraph 3 of Schedule 1. This
makes it clear beyond doubt that "arbitration" mentioned in
section 25.2 of the FCPL Shareholders' Agreement would include
an arbitrator appointed in accordance with the SIAC Rules which,
in turn, would include an Emergency Arbitrator. The SIAC
Rules deal with the concept of an Emergency Arbitrator.
[Paras 22-24][811-C-F]
1.7 A reading of the SIAC Rules indicates that even before
an arbitral Tribunal is constituted under the Rules, urgent interim
reliefs can be granted by what is termed as an "Emergency
Arbitrator". An "Emergency Arbitrator" is defined by Rule 1.3
of these Rules as meaning an arbitrator in accordance with
paragraph 3 of Schedule 1. Under paragraph 7 of Schedule 1, the
Emergency Arbitrator has all the powers vested in the arbitral
tribunal pursuant to SIAC Rules, including the authority to rule
on his own jurisdiction. Importantly, under paragraph 8 of Schedule
1 to the SIAC Rules, the Emergency Arbitrator shall have the
power to order such interim relief that he deems necessary, and
is to give summary reasons for his decision in writing. Under
paragraph 9, the interim order is to be made within 14 days of his
appointment, unless time is extended. Importantly, once the
arbitral tribunal is constituted under paragraph 10, the tribunal
may reconsider, modify, or vacate any such interim order. Such
interim order or award issued by the Emergency Arbitrator will
continue to bind the parties unless it is modified or vacated by
the arbitral tribunal, once it is constituted, until the tribunal makes
a final award or until the claim is withdrawn. Paragraph 10 of
Schedule 1 also provides that any interim order or award made
by the Emergency Arbitrator shall cease to be binding only if the
tribunal is not constituted within 90 days of such order or award.
Under paragraph 12, the parties agree that such orders shall be
binding on the parties from the date it is made and undertake to
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carry out the interim order immediately and without delay.
[Para 25][814-C-G]
1.8 The 246th Law Commission Report did provide for the
insertion of an Emergency Arbitrator's orders into Section 2(1)(d)
of the Arbitration Act. It is pertinent to note that the High-Level
Committee constituted by the Government of India under the
chairmanship of Justice B.N. Srikrishna (Retd.) to review the
institutionalisation of arbitration mechanism in India and look into
the provisions of the Arbitration Act after the 2015 Amendment
Act, submitted a report on 30th July, 2017- "Srikrishna
Committee Report". What is of significance is that the said Report
laid down that it is possible to interpret Section 17(2) of the Act
to enforce emergency awards for arbitrations seated in India, and
recommended that the Act be amended only so that it comes in
line with international practice in favour of recognising
and enforcing an emergency award. [Paras 26, 28, 29][814-G-H;
818-B-C; 819-D]
Avitel Post Studioz Ltd. & Ors. v. HSBC PI Holdings
(Mauritius) Ltd. (2021) 4 SCC 713 - referred to.
Raffles Design International India Pvt. Ltd. v. Educomp
Professional Education Ltd. 2016 SCC OnLine Del
5521 : [2016] 234 DLT 349 - approved.
1.9 In essence, what is provided by the SIAC Rules and
the other institutional rules, is reflected in Sections 9(2) and 9(3)
so far as interim orders passed by courts are concerned. The
introduction of Sections 9(2) and 9(3) would show that the objective
was to avoid courts being flooded with Section 9 petitions when
an arbitral tribunal is constituted for two good reasons-(i) that
the clogged court system ought to be decongested, and (ii) that
an arbitral tribunal, once constituted, would be able to grant
interim relief in a timely and efficacious manner. Section 17 was
then amended by the very same 2015 Amendment Act (which
brought in sub-sections (2) and (3) to Section 9) to substitute
Section 17 so that Section 17(1) would be a mirror image of Section
9(1), making it clear that an arbitral tribunal is fully clothed with
the same power as a court to provide for interim relief. Also,
Section 17(2) was added so as to provide for enforceability of
such orders, again, as if they were orders passed by a court,
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thereby bringing Section 17 on par with Section 9. [Paras 32,
34][820-G-H; 821-G-H]
1.10 An Emergency Arbitrator's "award", i.e., order, would
undoubtedly be an order which furthers these very objectives,
i.e., to decongest the court system and to give the parties urgent
interim relief in cases which deserve such relief. Given the fact
that party autonomy is respected by the Act and that there is
otherwise no interdict against an Emergency Arbitrator being
appointed, it is clear that an Emergency Arbitrator's order, which
is exactly like an order of an arbitral tribunal once properly
constituted, in that parties have to be heard and reasons are to
be given, would fall within the institutional rules to which the
parties have agreed, and would consequently be covered by
Section 17(1), when read with the other provisions of the Act.
[Para 35][822-A-C]
1.11 A party cannot be heard to say, after it participates in
an Emergency Award proceeding, having agreed to institutional
rules made in that regard, that thereafter it will not be bound by
an Emergency Arbitrator's ruling. Having agreed to paragraph
12 of Schedule 1 to the SIAC Rules, the party cannot ignore an
Emergency Arbitrator's award by stating that it is a nullity when
such party expressly agrees to the binding nature of such award
from the date it is made and further undertakes to carry out the
said interim order immediately and without delay. [Para 36]
[822-C-E]
1.12 Rule 3 merely states that the President may appoint
an Emergency Arbitrator if he determines that the SIAC should
accept the application for emergency interim relief. Once the
Emergency Arbitrator enters upon the reference, he is given all
the powers of an arbitral tribunal under Rule 7 and is to decide
completely independently of any other administrative authority
under the SIAC Rules. Equally, Rule 9 does not, in any manner,
impinge upon the independence of the Emergency Arbitrator as
it only lays down the timeframe within which an interim order or
award is to be made, which time is extendable by the Registrar.
The interim order or award that is finally made by the Emergency
Arbitrator has only to be approved by the Registrar as to its
"form" and not on merits. Further, Rule 10 also does not, in any
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manner, interfere with the independence of the decision of the
Emergency Arbitrator. The submission that an Emergency
Arbitrator under the SIAC Rules is not an independent judicial
body like an arbitral tribunal constituted under the very Rules,
and referred to and relied upon Rules 3, 9, and 10 is, therefore,
rejected. The submission that arbitration, conceptually, is an
ouster of the civil court's jurisdiction and that, therefore, only
what is expressly provided in the ouster provisions can be
followed - there is no room for any implication here, may have
found favour with a court if it were dealing with Arbitration Act,
1940. The Arbitration and Conciliation Act, 1996 is a complete
break with the past and is no longer to be viewed as an ouster
statute but as a statute which favours the remedy of arbitration
so as to de-clog civil courts which are, in today's milieu, extremely
burdened. As a matter of fact, Section 5 of the Arbitration Act
puts paid to the submission when it overrides all other laws for
the time being in force and goes on to state that in matters
governed by Part I of the Act, no judicial authority shall intervene
except where so provided in that Part. The Arbitration Act,
therefore, turns the principle of ouster on its head when it comes
to arbitration as a favoured means of resolving civil disputes.
[Paras 37, 38][822-F-H; 823-B-D]
Krishnadevi Malchand Kamathia v. Bombay
Environmental Action Group (2011) 3 SCC 363 : [2011]
3 SCR 291; Anita International v. Tungabadra Sugar
Works Mazdoor Sangh (2016) 9 SCC 44 : [2016] 6
SCR 635; Tayabbhai M. Bagasarwalla v. Hind Rubber
Industries (P) Ltd. (1997) 3 SCC 443 : [1997] 2 SCR
152 - referred to.
In Re Franklin and Swathling's Arbitration, [1929] 1 Ch.
238 - referred to.
Justice R.S. Bachawat's Law of Arbitration and
Conciliation (Sixth Ed., LexisNexis) - referred to.
1.13 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
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Arbitration Act which interdicts an Emergency Arbitrator's order
from being made. Section 17, as construed in the light of the
other provisions of the Act, clearly leads to the position that such
emergency award is made under the provisions of Section 17(1)
and can be enforced under the provisions of Section 17(2).
[Para 40][827-D-F]
Kiran Singh v. Chaman Paswan [1955] 1 SCR 117;
CIT v. Pearl Mechanical Engineering & Foundry Works
(P) Ltd. (2004) 4 SCC 597 : [2004] 1 Suppl. SCR 339
- distinguished.
1.14 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. [Para 41][827-F-G]
2.1 A reading of Order XXXIX, Rule 2(3) and 2(4) as it
originally stood, and Order XXXIX, Rule 2-A as it stands after
the 1976 Amendment Act is to "prescribe" under Section 94 of
the Code of Civil Procedure as to what is the consequence when
a temporary injunction order and/or an order appointing a receiver
of property is flouted. The consequences are mentioned in
Sections 94(c) and (d) itself and fleshed out by Order XXXIX.
[Para 48][834-G-H; 835-A]
Adhunik Steels Ltd. v. Orissa Manganese and Minerals
(P) Ltd. (2007) 7 SCC 125 : [2007] 8 SCR 213; Food
Corporation of India v. Sukh Deo Prasad (2009) 5 SCC
665 : [2009] SCR 1107; U.C. Surendranath v.
Mambally's Bakery (2019) 20 SCC 666 - referred to.
2.2 Orders passed under Section 17(2) of the Arbitration
Act, using the power contained in Order XXXIX, Rule 2-A are,
therefore, properly referable only to the Arbitration Act.
[Para 50][836-D]
2.3 It is well settled that the expression "in relation to",
which occurs in both Section 9(1) and Section 17(1), is an
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expression which is comprehensive in nature, having both a direct
as well as an indirect significance. Coupled with this, the
expression "any proceedings", occurring in Section 9(1) and
Section 17(1), would also be an expression comprehensive
enough to take in enforcement proceedings. [Paras 51, 53]
[836-E; 839-G]
Bandekar Brothers Pvt. Ltd. v. Prasad Vassudev Keni
2020 SCC OnLine SC 707; Thyssen Stahlunion Gmbh
v. Steel Authority of India Ltd. (1999) 9 SCC 334 :
[1999] 3 Suppl. SCR 461; BCCI v. Kochi Cricket (P)
Ltd. (2018) 6 SCC 287 : [2018] 2 SCR 829; Shri
Balaganesan Metals v. M.N. Shanmugham Chetty
(1987) 2 SCC 707 : [1987] 2 SCR 1173; Lucknow
Development Authority v. M.K. Gupta (1994) 1 SCC
243 : [1993] 3 Suppl. SCR 615; Union of India v. A.B.
Shah (1996) 8 SCC 540 : [1996] 2 Suppl. SCR 620 -
referred to.
2.4 Properly so read, the expressions "in relation to" and
"any proceedings" would include the power to enforce orders
that are made under Section 9(1), and are not limited to incidental
powers to make interim orders. Thus, if an order under Section
9(1) is flouted by any party, proceedings for enforcement of the
same are available to the court making such orders under Section
9(1). These powers are, therefore, traceable directly to Section
9(1) of the Act-which then takes to the Code of Civil Procedure.
Thus, an order made under Order XXXIX Rule 2-A, in
enforcement of an order made under Section 9, would also be
referable to Section 9(1) of the Arbitration Act. [Para 54]
[842-C-E]
2.5 Given the fact that the 2015 Amendment Act has
provided in Section 17(1) the same powers to an arbitral tribunal
as are given to a court, it would be anomalous to hold that if an
interim order was passed by the tribunal and then enforced by
the court with reference to Order XXXIX Rule 2-A of the Code
of Civil Procedure, such order would not be referable to Section
17. Section 17(2) was necessitated because the earlier law on
enforcement of an arbitral tribunal's interim orders was found to
be too cumbersome. [Para 55][842-E-G]
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Alka Chandewar v. Shamshul Ishrar Khan (2017) 16
SCC 119 : [2017] 6 SCR 533 - referred to.
2.6 It was to remedy this situation that Section 17(2) was
introduced. There is no doubt that the arbitral tribunal cannot
itself enforce its orders, which can only be done by a court with
reference to the Code of Civil Procedure. But the court, when it
acts under Section 17(2), acts in the same manner as it acts to
enforce a court order made under Section 9(1). If this is so, then
what is clear is that the arbitral tribunal's order gets enforced
under Section 17(2) read with the Code of Civil Procedure.There
is no doubt that Section 17(2) creates a legal fiction. This fiction
is created only for the purpose of enforceability of interim orders
made by the arbitral tribunal. To extend it to appeals being filed
under the Code of Civil Procedure would be a big leap not
envisaged by the legislature at all in enacting the said fiction.
[Paras 56, 57][844-G-H; 845-A-B]
Paramjeet Singh Patheja v. ICDS Ltd. (2006) 13 SCC
322; Rajasthan State Industrial Development &
Investment Corporation v. Diamond & Gem
Development Corporation Ltd. (2013) 5 SCC 470 :
[2013] 4 SCR 331; East End Dwellings Co. Ltd. v.
Finsbury Borough Council 1952 AC 109 : [1951] 2 All
ER 587 (HL) - referred to.
2.7 There can be no doubt that the legal fiction created
under Section 17(2) for enforcement of interim orders is created
only for the limited purpose of enforcement as a decree of the
court. To extend this fiction to encompass appeals from such
orders is to go beyond the clear intention of the legislature. The
submission in stressing the words "under the Code of Civil
Procedure" in Section 17(2), thus holds no water as a limited
fiction for the purpose of enforcement cannot be elevated to the
level of a genie which has been released from a statutory provision
and which would encompass matters never in the contemplation
of the legislature. [Para 59][847-F-H; 848-A]
2.8 The fiction created by Section 49 of the Arbitration Act
is limited to enforcement of a foreign award, with the important
corollary that an application to enforce an award is an application
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under the Arbitration Act and not an application under Order
XXI of the Code of Civil Procedure (in which case, such application
would have been governed by Article 136 of the Limitation Act
as an execution application under Order XXI, and not an
application under the residuary Article 137 of the Limitation Act).
[Para 60][850-F-G]
Union of India v. Vedanta Ltd. (2020) 10 SCC 1 - relied
on.
2.9 On a proper interpretation of the said Act, an award/
order by an Emergency Arbitrator would be covered by Section
17 of the Arbitration Act, when properly read with other provisions
of the Act. [Para 62][851-D-E]
2.10 The interpretation of Section 36 is not before this
Court-the interpretation of Section 17 read with Section 9 is. As
far as Section 17 is concerned, the scheme qua interim orders
passed by an arbitral tribunal mirrors the scheme qua interim
orders passed by civil courts under Section 9. This vital difference
between the provisions of Section 17 read with Section 9 and as
contrasted with Section 36 puts paid to this argument.
[Para 64][852-A-B]
Daelim Industrial Co. Ltd. v. Numaligarh Refinery Ltd.
2009 SCC OnLine Del 511 : [2009] 159 DLT 579;
Sundaram Finance Ltd. v. Abdul Samad (2018) 3 SCC
622 : [2018] 10 SCR 451; Gemini Bay Transcription
Pvt. Ltd. v. Integrated Sales Service Ltd. 2018 SCC
OnLine Bom 216 : AIR 2018 Bom 89 (FB); Jet Airways
(India) Ltd. v. Subrata Roy Sahara 2011 SCC OnLine
Bom 1379 : [2012] (2) AIR Bom 855; Kakade
Construction Co. Ltd. v. Vistra ITCL 2019 SCC OnLine
Bom 1521 : (2019) 6 Bom CR 805; Global Asia Venture
Co. v. Arup Parimal Deb 2018 SCC OnLine Bom
13061; Punjab State Civil Supplies Corporation Ltd. v.
Atwal Rice & General Mills (2017) 8 SCC 116 : [2017]
8 SCR 198 - referred to.
3.1 There can be no doubt that Section 37 is a complete
code so far as appeals from orders and awards made under the
Arbitration Act are concerned. This has further been
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strengthened by the addition of the non-obstante clause by the
Arbitration and Conciliation (Amendment) Act, 2019.
[Para 69][854-C-D]
Kandla Export Corporation v. OCI Corporation (2018)
14 SCC 715 : [2018] 1 SCR 915; Deep Industries Ltd.
v. ONGC (2020) 15 SCC 706; BGS SGS SOMA JV v.
NHPC (2020) 4 SCC 234 - referred to.
3.2 Section 37 did not remain untouched by the 2015
Amendment Act. As a matter of fact, a new category of appeals
was infused into the said provision by adding a new sub-section
(1)(a).Despite Section 17 being amended by the same Amendment
Act, by making Section 17(1) the mirror image of Section 9(1) as
to the interim measures that can be made, and by adding Section
17(2) as a consequence thereof, significantly, no change was made
in Section 37(b)(2) to bring it in line with Order XLIII, Rule 1(r).
The said Section continued to provide appeals only from an order
granting or refusing to grant any interim measure under Section
17. There can be no doubt that granting or refusing to grant any
interim measure under Section 17 would only refer to the grant
or non-grant of interim measures under Section 17(1)(i) and 17(1)
(ii). In fact, the opening words of Section 17(2), namely, "subject
to any orders passed in appeal under Section 37..." also
demonstrates the legislature's understanding that orders that are
passed in an appeal under Section 37 are relatable only to Section
17(1). For example, an appeal against an order refusing an
injunction may be allowed, in which case sub- section (2) of Section
17 then kicks in to enforce the order passed in appeal. Also, the
legislature made no amendment to the granting or refusing to
grant any measure under Section 9 to bring it in line with Order
XLIII, Rule 1(r), under Section 37(1)(b). What is clear from this
is that enforcement proceedings are not covered by the appeal
provision. [Paras 73, 74][858-F-G; 859-A-E]
Chintels (India) Ltd. v. Bhayana Builders (P) Ltd. (2021)
4 SCC 602 - distinguished.
3.3 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. As a result, all interim
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orders of this Court stand vacated. The impugned judgments of
the Division Bench are set aside. [Para 76][861-B]
South Delhi Municipal Corporation v. Tech Mahindra
(2019) SCC Online Delhi 11863 - referred to.
Case Law Reference
[2013] 6 SCR 453
referred to
Para 14
[2016] 1 SCR 364
referred to
Para 14
[2016] 9 SCR 83
distinguished
Para 17
[2004] 1 SCR 404
referred to
Para 21
(2021) 4 SCC 713
referred to
Para 27
[2011] 3 SCR 291
referred to
Para 39
[2016] 6 SCR 635
referred to
Para 39
[1997] 2 SCR 152
referred to
Para 39
[1955] 1 SCR 117
distinguished
Para 40
[2004] 1 Suppl. SCR 339
distinguished
Para 40
[2007] 8 SCR 213
referred to
Para 46
[2009] SCR 1107
referred to
Para 49
(2019) 20 SCC 666
referred to
Para 49
[1999] 3 Suppl. SCR 461
referred to
Para 52
[2018] 2 SCR 829
referred to
Para 52
[1987] 2 SCR 1173
referred to
Para 53
[1993] 3 Suppl. SCR 615
referred to
Para 53
[1996] 2 Suppl. SCR 620
referred to
Para 53
[2017] 6 SCR 533
referred to
Para 54
(2006) 13 SCC 322
referred to
Para 57
[2013] 4 SCR 331
referred to
Para 58
(2020) 10 SCC 1
relied on
Para 60
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(2009) 159 DLT 579
referred to
Para 65
[2018] 10 SCR 451
referred to
Para 66
AIR 2018 Bom 89 (FB)
referred to
Para 67
[2017] 8 SCR 198
referred to
Para 68
[2018] 1 SCR 915
referred to
Para 70
(2020) 15 SCC 706
referred to
Para 71
(2020) 4 SCC 234
referred to
Para 72
(2021) 4 SCC 602
distinguished
Para 75
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 44924493 of 2021.
From the Judgment and Order dated 08.02.2021 of the High Court
of Delhi at New Delhi in FAO (OS) (COMM.) No. 21 of 2021 and
C.M. No. 4124 of 2021.
With
Civil Appeal Nos. 4494-4495 And 4496-4497 of 2021.
Gopal Subramanium, Ranjit Kumar, Gourab Banerji, Nakul Dewan,
Aspi Chinoy, Amit Sibal, Sr. Advs., Anand S Pathak, Amit K Mishra,
Shashank Gautam, Ms. Sreemoyee Deb, Vijay Purohit, Mohit Singh,
Harshad Pathak, Promit Chatterjee, Shivam Pandey, Ms. Samridhi Hota,
Ms. Kanika Singhal, Ms. Saloni Agarwal, Ms. Didon Misri, Ms. Nikita
Bangera, Pratik Jhaveri, Faizan Mithaiwala, Vijayendra Pratap Singh,
Rachit Bahl, Ms. Roopali Singh, Abhijnan Jha, Priyank Ladoia, Tanmay
Sharma, Ms. Vanya Chhabra, Arnab Ray, Vedant Kapur, Shaurya Mittal,
Abhisar Vidyarthi, Ms. Ninaee Deshmukh, Pawan Bhushan, Ms. Hima
Lawrence, Ms. Ujwala Uppaluri, Mohit Pandey, T. Sundaram, Vinay
Tripathi, Aishvary Vikram, Kaustubh Prakash, Ms. Anushka Shah, Ms.
Neelu Mohan, Shashank Manish, Ms. Smriti Shah, Ms. Nidhi Sahay,
Advs. for the appellant.
Harish Salve, K V Viswanathan, Vineet Naik, Ritin Rai, Vikram
Nankani, Sr. Advs., Ameet Naik, Raghav Shankar, Aditya Mehta, Tushar
Hathiramani, Abhishek Kale, Ms. Madhu Gadodia, Harshvardhan Jha,
Ms. Arshiya Sharda, Mrs. Ritika Rai, Yugandhara Pawar Jha, Apoorva
Singhal, Pankaj Patel, Rohan Shah, Mahesh Agarwal, Naval Agarwal,
Rishi Agarwala, Karan Luthra, Rohan Kelkar, Pranjit Bhattacharya, Ankit
AMAZON.COM NV INVESTMENT HOLDINGS LLC v.
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Banati, E. C. Agrawala, Vikas Mehta, Ms. Devanshi Singh, Apoorv
Khator, Bhaskar Nayak, Advs. for the Respondents.
The Judgment of the Court was delivered by
R. F. NARIMAN, J.
1. Two important questions arise in these appeals - first, as to
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 ciliation Act, 1996 ["Arbitration Act"]; and second, as
to whether an order passed under Section 17(2) of the Arbitration Act in
enforcement of the award of an Emergency Arbitrator by a learned
Single Judge of the High Court is appealable.
2. The brief facts necessary to appreciate the context in which
these two questions arise are as follows:
2.1. Proceedings were initiated by the Appellant, Amazon.com
NV Investment Holdings LLC ["Amazon"] before the High Court of
Delhi under Section 17(2) of the Arbitration Act to enforce the award/
order dated 25th October, 2020 of an Emergency Arbitrator, Mr. V.K.
Rajah, SC. This order was passed in arbitration proceedings being SIAC
Arbitration No. 960 of 2020 commenced by Amazon against
Respondents No. 1 to 13, who are described as under:
(i)
Respondent No.1 - Future Retail Limited, India's secondlargest offline retailer ["FRL"]
(ii)
Respondent No.2 - Future Coupons Pvt. Ltd., a company
that holds 9.82% shareholding in FRL and is controlled and
majority-owned by Respondents No. 3 to 11 ["FCPL"]
(iii)
Respondent No.3 - Mr. Kishore Biyani, Executive
Chairman and Group CEO of FRL
(iv)
Respondent No.8 - Mr. Rakesh Biyani, Managing Director
of FRL
(v)
Respondents No. 4 to 7 and 9 to 11 - other members of the
Biyani family, namely, Ms. Ashni Kishore Biyani, Mr. Anil
Biyani, Mr. Gopikishan Biyani, Mr. Laxminarayan Biyani,
Mr. Sunil Biyani, Mr. Vijay Biyani, and Mr. Vivek Biyani,
who are promoters and shareholders of FRL
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(vi)
Respondents No. 12 and 13 - Future Corporate Resources
Pvt. Ltd. and Akar Estate and Finance Pvt. Ltd., group
companies of FRL
Respondents No. 1 to 13 are hereinafter collectively referred to
as the "Biyani Group".
2.2. The seat of the arbitral proceedings is New Delhi, and as per
the arbitration clause agreed upon by the parties, SIAC Rules apply.
2.3. Three agreements were entered into between the parties. A
Shareholders' Agreement dated 12th August, 2019, was entered into
amongst the Biyani Group, i.e., Respondents No. 1 to 13 ["FRL
Shareholders' Agreement"]. Under this Shareholders' Agreement,
FCPL was accorded negative, protective, special, and material rights
with regard to FRL including, in particular, FRL's retail stores ["retail
assets"]. The rights granted to FCPL under this Shareholders'
Agreement were to be exercised for Amazon's benefit and thus were
mirrored in a Shareholders' Agreement dated 22nd August, 2019 entered
into between Amazon, FCPL, and Respondents No. 3 to 13 ["FCPL
Shareholders' Agreement"]. Amazon agreed to invest a sum of
Rs.1431 crore in FCPL based on the rights granted to FCPL under the
FRL Shareholders' Agreement and the FCPL Shareholders' Agreement.
This investment was recorded in the Share Subscription Agreement dated
22nd August, 2019 entered into between Amazon, FCPL, and Respondents
No. 3 to 13 ["Share Subscription Agreement"]. It was expressly
stipulated that this investment in FCPL would "flow down" to FRL. It
appears that the basic understanding between the parties was that
Amazon's investment in the retail assets of FRL would continue to vest
in FRL, as a result of which FRL could not transfer its retail assets
without FCPL's consent which, in turn, could not be granted unless
Amazon had provided its consent. Also, FRL was prohibited from
encumbering/transferring/selling/divesting/disposing of its retail assets
to "restricted persons", being prohibited entities, with whom FRL, FCPL,
and the Biyanis could not deal. A list of such restricted persons was then
set out in Schedule III of the FCPL Shareholders' Agreement and also
under the FRL Shareholders' Agreement vide letter dated 19th December,
2019. There is no doubt that the Mukesh Dhirubhai Ambani group
(Reliance Industries group) is a "restricted person" under both these
Shareholders' Agreements.
AMAZON.COM NV INVESTMENT HOLDINGS LLC v.
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2.4. On 26th December, 2019, Amazon invested the aforesaid sum
of Rs.1431 crore in FCPL which "flowed down" to FRL on the very
same day. The bone of contention between the parties is that within a
few months from the date of this investment, i.e., on 29th August, 2020,
Respondents No. 1 to 13 entered into a transaction with the Mukesh
Dhirubhai Ambani group which envisages the amalgamation of FRL with
the Mukesh Dhirubhai Ambani group, the consequential cessation of
FRL as an entity, and the complete disposal of its retail assets in favour
of the said group.
2.5. Amazon initiated arbitration proceedings and filed an application
on 5th October, 2020 seeking emergency interim relief under the SIAC
Rules, asking for injunctions against the aforesaid transaction. Mr. V.K.
Rajah, SC was appointed as the Emergency Arbitrator and heard detailed
oral submissions from all parties and then passed an "interim award"
dated 25th October, 2020, in which the learned Arbitrator issued the
following injunctions/directions:
"B. Dispositive Orders/Directions
285. In the result, I award, direct, and order as follows:
(a) the Respondents are injuncted from taking any steps in
furtherance or in aid of the Board Resolution made by the Board
of Directors of FRL on 29 August 2020 in relation to the Disputed
Transaction, including but not limited to filing or pursuing any
application before any person, including regulatory bodies or
agencies in India, or requesting for approval at any company
meeting;
(b) the Respondents are injuncted from taking any steps to complete
the Disputed Transaction with entities that are part of the MDA
Group;
(c) without prejudice to the rights of any current Promoter Lenders,
the Respondents are injuncted from directly or indirectly taking
any steps to transfer/ dispose/ alienate/ encumber FRL's Retail
Assets or the shares held in FRL by the Promoters in any manner
without the prior written consent of the Claimant;
(d) the Respondents are injuncted from issuing securities of FRL
or obtaining/securing any financing, directly or indirectly, from any
Restricted Person that will be in any manner contrary to Section
13.3.1 of the FCPL SHA;
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(e) the orders in (a) to (d) above are to take effect immediately
and will remain in place until further order from the Tribunal, when
constituted; and
(f) the Claimant is to provide within 7 days from the date hereof a
cross-undertaking in damages to the Respondents. If the Parties
are unable to agree on its terms, they are to refer their differences
to me qua EA for resolution; and
(g) the costs of this Application be part of the costs of this
Arbitration."
2.6. The Biyani Group thereafter went ahead with the impugned
transaction, describing the award as a nullity and the Emergency Arbitrator
as coram non judice in order to press forward for permissions before
statutory authorities/regulatory bodies. FRL, consistent with this stand,
did not challenge the Emergency Arbitrator's award under Section 37 of
the Arbitration Act, but instead chose to file a civil suit before the Delhi
High Court being C.S. No.