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

The court held that prima facie, the Emergency Award restraining Future Group from going forward with the deal with Reliance Retail was not coram non judice.
Arbitration Act does not prohibit parties from obtaining relief from emergency arbitrator: Delhi High Court in Future Retail v. Amazon
Delhi High Court

While holding that the Emergency Award restraining Future Group from going forward with the deal with Reliance Retail was prima facie not coram non judice, the Delhi High Court ruled that the Arbitration & Conciliation Act does not prohibit parties from obtaining emergency relief from an emergency arbitrator [Future Retail v. Amazon].

A single-judge Bench of Justice Mukta Gupta said:

"(It) cannot be held that an Emergency Arbitrator is outside the scope of Section 2(1)(d) of the A&C Act, because the Parliament did not accept the recommendation of the Law Commission to amend Section 2(1)(d) of the A& C Act to include an ' Emergency Arbitrator'..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."

One of the primary contentions of Future Retail was that the Emergency Award passed by the arbitrator under the Rules of the Singapore International Arbitration Centre (SIAC) was of no consequence as it was not enforceable or recognised in the Indian regime.

Amazon, on the other hand, informed 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 contained no provision to disempower an Emergency Arbitrator.

Reiterating that party autonomy was the backbone of arbitration, the Court stated that it was "perfectly legal" for the parties to choose a different procedural law, which was SIAC Rules in the present case.

The only issue for consideration in such cases is to see whether the chosen procedural law is contrary to/repugnant with the public policy of India or with the mandatory requirements of the procedural law under the Arbitration Act, the Court added.

The Court noted that Amazon and Future Group companies had expressly 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.

Opining that the SIAC Rules, therefore, did not take away the substantive right of the parties to approach the courts in India for interim relief, the Court observed,

" .. the SIAC rules themselves recognize and uphold the right of a party to avail interim relief under Section 9 of the A&C Act. The SIAC rules however provide an option to the aggrieved party to either approach the emergency arbitrator for interim relief, or to approach a judicial authority for the same, prior to the constitution of the Tribunal..In the present case, the parties had with open eyes left it for themselves, to choose between availing interim relief from the emergency arbitrator on the one hand, or the Courts under Section 9 of the A&C Act on the other hand. Thus, Amazon has exercised its choice of the forum for interim relief as per the arbitration agreement between the parties.Nothing in the A&C Act prohibits the parties from doing so."

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

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

".. as Section 9 of the A&C Act along with Sections 27, 37(1)(a) and 37(2) are derogable by virtue of the proviso to Section 2(2) in an International arbitration seated in India upon an agreement between the parties, 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."

[Read Judgement]

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