[BREAKING] Supreme Court rules in favour of Amazon, holds Singapore Emergency Arbitrator award against Future -Reliance deal enforceable in India

E-commerce giant, Amazon secured a major relief from the Supreme Court of India on Friday as the top court allowed the appeal filed by the multi-national against a Delhi High Court order staying attachment of properties of Future Group companies and Kishore Biyani in relation to the Future-Reliance deal..The Bench of Justices Rohinton Fali Nariman and BR Gavai also held that the order of an emergency arbitrator of Singapore restraining Future Retail from proceeding with its merger deal with Mukesh Ambani's Reliance Retail is enforceable in India, under Section 17(2) of the Arbitration and Conciliation Act (Arbitration Act).An emergency arbitrator's award, the Court ruled, is very much an order under Section 17(1) of the Arbitration Act."It is wholly incorrect to say that Section 17(1) of the Act would exclude an Emergency Arbitrator’s orders.....We declare that that 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 orders of this Court stand vacated," the Court ruled.A Division Bench of the Delhi High Court had stayed an order passed by the single-judge, who had pursuant to the emergency arbitrator's award, directed attachment of properties of Future Group companies and Kishore Biyani in relation to the Future-Reliance deal .The Single Judge order of the High Court had upheld the award of an emergency arbitrator, directed attachment of the properties and restrained Future Retail Limited from going ahead with the ₹24,713 crore merger with Reliance Retail.This order was subsequently stayed by a Division Bench, prompting the appeal by Amazon.During the course of the proceedings before the apex court, the Bench clarified that only two issues would be decided in this appeal:1) Whether Section 17(1) of the Arbitration and Conciliation Act, 1996 covers an Emergency Arbitrator's awards; and2) Whether an order passed under Section 17(2) of the Arbitration Act in enforcement of the award of an Emergency Arbitrator by a Single Judge of the High Court is appealable.The Court said 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 be included within the ambit of Section 17(2)."When Section 17(1) uses the expression “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. It is significant to note that the words “arbitral proceedings” are not limited by any definition and thus encompass proceedings before an Emergency Arbitrator," the judgment said.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, the Court reaffirmed. "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 Court said..Section 17(2) lays down that subject to any orders passed in an appeal under section 37, any order issued by the arbitral tribunal under this section shall be deemed to be an order of the court for all purposes and shall be enforceable under the Code of Civil ProcedureThe Court held that there is no doubt that Section 17(2) creates a legal fiction and that 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," the Court said. Thus, no appeal would lie 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..Senior Advocate Aspi Chinoy on behalf of Amazon submitted that the promoters of FRL - Kishore Biyani and Rakesh Biyani - were the real focus of the matter, since they negotiated and induced Amazon into entering into multiple agreements and subsequently, wilfully breached them."In the clash of corporates, one must not lose sight of the dramatis personae as that is where the driving force comes from,” he said..Chinoy urged the Bench to resolve the epiphany of the the Biyans that struck them at a later stage that an award by the emergency arbitrator is contrary to the Arbitration Act..Senior Advocate Gopal Subramanium for Amazon argued that the parties consented to arbitration governed by the Singapore International Arbitration Centre (SIAC) Rules, subject to Indian law.Therefore, they agreed to emergency arbitration when they agreed to be governed by the SIAC Rules till the constitution of an arbitral tribunal..Senior Advocate Harish Salve, appearing for FRL, made submissions regarding the error in the order passed by Single Judge, Justice JR Midha.Salve submitted that there is no concept of an emergency arbitrator under Indian law, and that it is a matter of right that once an award comes for execution to an Indian court, its jurisdiction can be argued.Further, it would amount to amendment by construction, should the emergency arbitrator's awards be given the same legal efficacy as orders under Section 17 of the Act, submitted Salve.“The exercise of amendment to include EAs as tribunals under the 1996 Act, must be by the Parliament and not by the courts.”.Salve had also reiterated that there was no arbitration agreement between Amazon and FRL to begin with.He elucidated that the prerequisite for an arbitration proceeding is the constitution of an arbitral tribunal, one that is competent to pass an award.Including an emergency arbitrator (EA) into the scheme of the Act would create a fork in the road, where parties will have recourse to either go to an EA or seek redressal under Section 9, he had added..The Bench had reserved its judgment on July 29, 2021..Senior Advocate Gopal Subramanium appeared for Amazon and was briefed by P&A Law Offices and AZB & Partners.Senior Advocate Harish Salve, appeared for FRL was briefed by Naik Naik & Co. Agarwala Law Associates briefed Vikram Nankani who represented Future Coupon Private Limited and the promoters..[Amazon v. Future] Supreme Court reserves judgment in appeal against Delhi High Court stay order .[Read Judgment]