Case Analysis on: Amazon.com NV Investment Holdings LLC v. Future Coupons Private Limited & Ors.

Authored By: Kartikeya Nain

Citation: Civil Appeal Nos. 4494-4495 of 2021

Date of Judgement: 18th March 2021

Court: The Supreme Court of India

Bench: Justice Rohinton Fali Nariman, Justice B.R. Gavai

Introduction

An Emergency Arbitrator is a solution for the earliest relief and helps prior to framing an arbitral court. The main job of Emergency Arbitration becomes an integral factor in a circumstance when there is no arbitral tribunal set up or in a circumstance where adequate time would be squandered in setting up one, contingent on the necessities of a discretionary understanding of the institutional guidelines. It multiplies as a guarantee due to different imperfections in the framework, for example, absence of trust in the public courts to concede pressing relief, spillage of classified data, misrepresented prosecution costs, and so forth. One of the objectives of forming an Emergency Arbitrator is to accomplish a goal than that which gets through the public courts under section 9 of the Arbitration and Conciliation Act.

Facts of the Case

In 2019, Future Group, which is India's second-biggest coordinated disconnected retailer, needed to team up with foreign investors to develop their business. The advertisers "Biyanis" rebuilt a current gathering element, Future Coupons Private Limited ("FCPL") to obtain portions of Future Retail Limited ("FRL"). Considering it to be a splendid chance. Through the FCPL-SSA, it was commonly concluded that the Biyanis and Amazon would together exercise the privileges of FCPL in FRL, and explicitly never without Amazon's consent.

Following one year, in August 2020, Amazon, to its absolute amazement, discovered that FRL, without their endorsement or consent, had supported a contested exchange with a confined individual, for example with Mukesh Dhirubhai Ambani Group ("MDA"). These contested exchanges and confined people were precluded completely under the FCPL-SSA. Amazon sought intervention under the FCPL-SSA, which was represented by the Singapore International Arbitration Center ("SIAC") and had its seat in New Delhi. Because of the earnestness in question, in October 2020, Amazon recorded an application for the arrangement of an emergency arbitrator as given under the SIAC Rules, and accordingly, an Emergency Arbitrator ("EA") was selected.

Accordingly, FRL (co-Respondent), brought up a primer criticism regarding the ward and arrangement of the EA. Among others, it was additionally argued that there was no legitimate mediation understanding between the FRL and Amazon.

Issue

Whether an ‘Emergency Arbitrator’ is an arbitrator within the meaning of Section 2(1)(d) of the Arbitration & Conciliation Act?[ii]

Arguments

Contention of the Petitioner

In the Court proceeding, Amazon upheld the EA's organization and presented that the EA' is well inside the extent of the meaning of 'Arbitral Tribunal' under Section 2(1)(d) of the Act. Having been passed as per the SIAC Rules, the EA's organization keeps on being legitimate and restricted to parties. The idea of party independence and its results have been relied upon by the Court to presume that EA falls inside the meaning of 'Arbitral Tribunal' as the gatherings' determination of SIAC Rules to administer the arbitral procedure, which has arrangements of Emergency Arbitration, itself demonstrates the gatherings' consent to be limited by the EA's structure.

Amazon further depended on the Rules of the Delhi International Arbitration Center, Mumbai Center of International Arbitration, and Madras High Court Arbitration Center, which accommodate Emergency Arbitration techniques to fight how Emergency Arbitration is perceived under Indian law.

Amazon presented that they were prepared to monetarily help the Future Group in the most ideal way they could. However it was to its shock that its shareholding had been weakened because of the contested exchanges being entered into by the Future Group with a confined individual.

For example MDA disregarding the conditions of the FCPL-SSA. Amazon additionally contended that, as appropriately maintained by the EA, the Group of Companies precept applies decisively to the debate, taking into account the points of reference set out by the Supreme Court in Chloro Controls India Private Limited v. Sever N Trent Water Purification Inc.[iii]

Contentions of the Respondent

Respondents presented that the 'Arbitral Tribunal' as characterized in Section 2(1)(d) of the Act does exclude an EA. They kept up with the fact that the arrangement of an EA under SIAC Rules was invalid. Along these lines, any request conceded by the EA would likewise be invalid. The thinking embraced by the Respondents was that the EA's structure would never be a request for the 'Arbitral Tribunal' either under the arrangements of the Act or significantly under the SIAC Rules.

Respondents additionally contended that the language of Section 17(2) of the Act, can nor be extended, nor can the meaning of 'Arbitral Tribunal' be extended by the course of development to cause a circumstance where a request/grant by an EA is put at par with the request passed by an Arbitral Tribunal. Respondents kept up with the Indian courts observations requests made by EAs just with regards to foreign situated assertions, where procedures were recorded under Section 9 of the Act to look for authorization of the foreign EA's organization and not treat an EA's structure as one passed under Section 17 of the Act and contended that the gathering of organizations precept applies just in procedures under Section 8 of the Act and not in Court Proceedings like the present.

Judgement

Delhi High Court decides that an EA is a sole arbitrator appointed by an arbitral foundation to consider an application for an emergency interval alleviation in situations where the gatherings have consented as per the Rules of an arbitral organization which contain arrangements connected with emergency assertion. The situation with the EA is holistically founded on party independence, and henceforth a request/grant from the EA is restricted to on every one of the gatherings.

The Court then, at that point, dove into the significant qualities of emergency discretion and decided that an EA has the ability to manage emergency break help, and his request/grant can be tested uniquely at the seat of mediation. Establishments like SIAC select an EA inside 24 hours of the solicitation by a party, and the application for the said explicit design is chosen within 15 days. Consequently, the Delhi High Court held that the EA is an Arbitrator in every practical sense, which is obvious from the conjoint perusing of Sections 2(1)(d), 2(6), 2(8), and 19(2) of the Act and SIAC Rules which are essential for the mediation understanding of Section 2(8) of the Act. Further, according to the Court, Section 2(1)(d) is broad to the point of including an EA. Under Section 17(1) of the Act, the Arbitral Tribunal has a similar ability to make interval requests as the Court, and Section 17(2) makes such break request enforceable in a similar way as though they were requests to the Court.

The Court additionally thought that the current Indian legal structure is adequate to perceive the law of Emergency Arbitration and that there is no need for a change in such a manner.

Case Analysis

As of late, the Supreme Court of India pondered on a critical part of assertion law and gave a milestone choice on account of Amazon v Future Coupons. The case raised under the steady gaze of the pinnacle court managed the enforceability of Emergency Arbitration. Its legitimacy as to Indian law was the disputed matter between both the gatherings and was treated as a significant inquiry of law by the peak court. This article tries to clarify the verifiable grid of the case and the ramifications of the choice.

This case holds importance for different reasons. Initially, it adds to India's voluminous understanding of the statute on worldwide business assertion. Besides, it answers a moderately new and less well-analyzed part of discretion considering recently held choices. Thirdly, it clarifies how the choice is intelligent of India's position of negligible legal mediation in issues of discretion, consequently instigating certainty and sureness in foreign investors.

Conclusion

The request for the emergency arbitrator is restricting upon the gatherings however not on the along these lines established arbitral tribunal, which has the ability to re-evaluate, adjust, end or cancel the request/grant of the emergency arbitrator. The court expressed that segment 2(1)(d) of the Act, which characterizes an arbitral tribunal, is broad to the point of including an Emergency Arbitrator, as it is important for the sole arbitrator. Hence, there exist similar powers for an emergency arbitrator as given to the arbitral tribunal under the Act.

References [i] Amazon v. Future Group https://main.sci.gov.in/supremecourt/2021/3947/3947_2021_32_1501_29084_Judgement_06-Aug-2021.pdf [ii] Section 2(1)(d) of the Arbitration & Conciliation Act https://www.indiacode.nic.in/show-data?actid=AC_CEN_3_46_00004_199626_1517807323919&sectionId=24502&sectionno=2&orderno=2 [iii] https://briefcased.in/case-brief/arbitration-law/chloro-controls-i-p-ltd-v-s-severn-trent-water-purification-inc-ors/