‘Future’ of the Amazon Arbitration: Alternative approach to ‘Reliance’ on the Emergency Arbitration order?

Could Amazon enforce the EA order as an interim order of a foreign court under the Code of Civil Procedure?
Amazon-Reliance arbitration, Future Group
Amazon-Reliance arbitration, Future Group

The Amazon-Future retail arbitration has been in the news over the past couple of weeks. By way of background, Amazon initiated arbitration proceedings before the Singapore International Arbitration Centre (SIAC) against Future Retail on October 9, alleging that the deal between the Future Group and Reliance Industries Ltd., announced in late August 2020, violated a contract between Amazon and Future Coupons.

On October 25, emergency arbitrator VK Rajah issued an emergency arbitration order (EA order) in favour of Amazon. The order restrains Future Group entities from proceeding with the share seal deal or any such agreement with Reliance and other restricted parties mentioned in the non-compete clause signed between Amazon and Future Coupons.

As expected, the talk of the town is if and how Amazon can enforce this order in India. Much has been written on this topic in the last week, which is welcome given the relative lack of jurisprudence on EA and the enforceability of EA orders in India.

The reason the enforceability question is being extensively discussed is because the New York Convention, 1958 only concerns the recognition and enforcement of foreign arbitral awards but not of interim/provisional/interlocutory orders of foreign-seated arbitral tribunals, the latter including EA orders. In light of this, the analysis most commonly being suggested is that since EA orders are not by themselves enforceable in India under the Arbitration & Conciliation Act, 1996, a “duplicative approach” is likely to be attempted.

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This duplicative approach entails filing (by Amazon in this case) a petition under Section 9 of the Act seeking interim relief, requesting the court to essentially duplicate the relief granted by the emergency arbitrator. This approach is considered to be derived from a decision of the High Court of Bombay in Avitel Post Studioz Ltd & Ors. v. HSBC PI Holdings (Mauritius) Ltd. In this case, as sought by the petitioner, the enforcement of an EA relief by a foreign-seated tribunal was indirectly achieved by (somewhat) duplicating it into a court-ordered interim measure under Section 9 of the Act.

However, even if an applicant has procured a favourable EA order from a foreign-seated tribunal and attempts to enforce it via Section 9, two factors need to be considered:

(i) Indian courts would need to independently examine any such application applying the tests governing a petition under Section 9 on the basis of principles under Indian law (see Raffles Design Int'l India Pvt. Ltd. v. Educomp Professional Education Ltd. & Ors). This is because courts do not exercise an enforcement jurisdiction and are not required to give any deference to an EA order under Section 9, and are only able to grant interim measures of protection.

(ii) A respondent would be entitled to re-agitate all objections, procedural and substantive, as it did before the emergency arbitrator. Hence, the duplicative approach may render the entire process undertaken to secure the EA order redundant to a large extent, if not entirely.

While several strategic, commercial and other considerations are at play in this case, could Amazon consider an alternative and arguably, more pragmatic approach? Namely, could it enforce the EA order as an interim order of a foreign court under the Code of Civil Procedure, 1908 (CPC) by applying principles of comity under private international law? This is what I surmise:

1. An emergency arbitrator is an arbitral tribunal under Section 2(1) of the Singapore International Arbitration Act, 2002 (IIA). It is assumed that Singapore is the seat of the Amazon arbitration based on available newspaper reports.

2. Under Section 12(6) of the IAA, all orders (including EA orders) are enforceable in the same manner as if they were orders made by a court. Further, where leave is so given by the High Court of Singapore upon such a request by Amazon, judgment may be entered in terms of the order or direction, i.e. the EA order would assume the status of an order of the High Court of Singapore.

3. Interim or interlocutory orders of foreign courts have time-and-again been recognised and enforced by Indian courts as a matter of principle of comity of courts and due respect must be given even to such orders passed by a foreign court, which is a facet of private international law. [See e.g., Surya Vadanan v. State of Tamil Nadu & Ors] Thus, in common law, interim orders of foreign courts would be enforceable as a matter of enforcing an obligation imposed by the foreign court except, perhaps, for any “special and compelling” reasons as per the Indian court, which is subject to the court’s determination and has a high threshold. Three considerations need emphasis here:

(a) In this case, Section 44A of the CPC will not be applicable as this provision is only applicable to money decrees, whereas the EA order is an injunctive/restraining order. Hence, enforcement of the order via a suit action will have to be at common law, applying principles of comity that Indian courts have embraced in enforcing interim/interlocutory orders of foreign courts.

(b) Since Section 44A would not apply, it would also not be important to consider whether or not Singapore is a reciprocating territory and whether the High Court of Singapore is notified as a “superior court.” Having said that, Singapore is recognised as a reciprocating territory by India and the High Court of Singapore has been classified as a “superior court” whose judgments are enforceable in India for the purposes of Section 44A.

(c) In this case, the court would not be concerned with Section 13 of the CPC, which provision is concerned with a final adjudication by a foreign court (see Surya Vadanan).

4. Amazon could thus file a suit to enforce the order/judgment of the High Court of Singapore in the appropriate Commercial Court in India, which could be the High Court of Delhi given Future Retail has filed caveats in this Court on November 3. Any objection made by Future will be determined by the Court on the high threshold of “special and compelling” reasons.

Meanwhile, pending determination of the suit, as compared to a petition under Section 9, there is a greater likelihood of Amazon securing interim relief until the suit is decided by the Court because of the judicial deference to a ruling of a foreign court as mentioned above.

Accordingly, with the limited information available thus far about the Amazon arbitration, the author surmises that having the EA order confirmed as an order/judgment of the Singapore High Court and then enforcing it in a Commercial Court in India is a viable alternative for Amazon to consider and perhaps, better than the duplicative approach. Unlike the scenario under Section 9, the enforcing Indian court is not expected to delve into the respective contentions of the parties on the merit or the existence of a prima facie case. Rather, only a requisite satisfaction of the court is needed, that the order/judgment was granted by the foreign court fairly and judiciously.

There is probably more than currently meets the eye in the Amazon arbitration, with many determinative factors and reasons to consider before either party takes any further steps. What is certain is that this arbitration and specifically, the EA order, has provided much food for thought for arbitration practitioners to discuss, debate and deliberate the issue of the enforcement of EA orders in India. It also presents an exciting opportunity to analyse this issue more holistically by considering alternative approaches, such as the one posited in this piece because such an approach could be pursued in other contexts, if not in the present case.

The author is a Delhi-based advocate. The views expressed herein are strictly personal.

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