[Amazon v. Future] Supreme Court reserves judgment in appeal against Delhi High Court stay order

The Supreme Court today reserved its judgment in the appeal filed by Amazon against the Delhi High Court order which stayed a previous order directing the attachment of properties of Future Group companies and Kishore Biyani in relation to the Future-Reliance deal..A Division Bench of Justices Rohinton Fali Nariman and BR Gavai heard arguments at length on Amazon’s plea against the order dated March 22 passed by a Division Bench of the Delhi High Court..The order under challenge stayed the single-judge order that upheld the award of an emergency arbitrator, directed attachment of the properties and restrained Future Retail Limited from going ahead with the Rs. 24,713 crore merger with Reliance Retail..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 the same can be enforced under Section 17(2)..Last week, Senior Advocate Aspi Chinoy made detailed arguments before the Bench on behalf of Amazon.He 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 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 concurred 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 was 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.“I can always say that this order is not worth the paper it is written on. This plea is always open in execution.”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 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 the recourse to either go to an EA or seek redressal under Section 9, he added.The Senior Counsel also told the Court that several foreign jurisdictions have included EAs either by way of express provisions - such as in New Zealand, Hong Kong and Singapore - or laws much less detailed than ours, such as the UK model..The exercise of amendment to include EAs as tribunals under the 1996 Act must be by Parliament and not by the courts,Senior Advocate Harish Salve.Senior Advocate KV Viswanathan also appeared for FRL and reinforced Salve’s arguments that once you cross into the realm of enforceability, the proceedings are governed by the Civil Procedure Code..While arguing his rejoinder, Subramanium stressed that the Arbitration Act is a self-contained code based on the Model Law.He said that three main features of the Model Law were incorporated into the 1996 Act: one, party autonomy; two, limited judicial review on awards; and three, nothing was in variance with the Model Law..After hearing arguments by various Senior Counsel representing the parties, the Court reserved its judgment today.