ALTERNATIVE DISPUTE RESOLUTION (ADR)

ASSIGNMENT

CASE – Amazon.com NV Investment Holdings LLC v. Future

Retails Ltd. & Others, (2022) 1 SCC 20

Submitted by -
Upasana Chopra, L19BALB044
 TABLE OF CONTENTS

S. No Contents Page No.

1. Background of the case 3

2. Facts of the case 3

3. Issues Raised 4

4. Arguments from the Appellants Side 4

5. Arguments from the Defendants Side 5

6. Judgement 5

7. Impact on the Arbitration Law 6

BACKGROUND OF THE CASE

The case involves Appellants, Amazon and defendants, Future Retail Ltd and Future Coupons
Private Ltd who were in agreement that Amazon would hold exclusive rights to retail assets of
the Future group. Future Group, which is a large offline retailer in India had plans to collaborate
with foreign investors in an attempt to expand business operations. This involved promoters,
Biyanis restructuring their existing entity into Future Coupons Private Ltd(FCPL) to acquire
shares of Future Retail Limited.

Amazon.com NV Investment Holding LLC (Amazon) had received INR 1,431 crore into
Future Coupons Private Ltd. which was supposed to flow down to Future Retail Ltd. (FRL).
Amazon thus grabbed the opportunity and entered into FCPL by infusing 1431 crore rupees
into it and holding 49% shares in a share subscription agreement parallel to that with the
promoter, Biyanis. According to a mutual understanding between them, Amazon’s investment
in FRL’s retail assets will continue to vest in FRL, preventing FRL from transferring its retails
assets without Amazon’s permission.

FRL and 12 other Future Groups companies entered into a transaction with Mukesh Dhirubhai
Ambani Group within a few months after the investment (Reliance Group). The merger of FRL
and Reliance Group, which included the transfer of FRL's retail businesses to Reliance Group,
resulted in a dispute between FRL and Amazon.

As a result of this transaction, an arbitration proceeding was started by Amazon against Future
Group under the Singapore International Arbitration Centre's Arbitration Rules (SIAC Rules).
An application was filed by Amazon requested an injunction against the acquisition as well as
immediate temporary relief. An Emergency Arbitrator issued an interim award on October 25,
2020, prohibiting Future Group from proceeding with the contested transaction. Future Group,
on the other hand, considered interim award as nullity and went ahead with the transaction.

FACTS OF THE CASE

The moment, Future group considered interim award as nullity and went ahead with the
transaction, a suit was filed by FRL before the Delhi High Court requesting an interim
restraining order to prevent Amazon from writing to statutory authorities based on the
Emergency Arbitrator's judgement. The Delhi High Court, however, refused to award the
interim relief, which FRL did not contest.

Separately, a petition was filed by Amazon in the Delhi High Court seeking enforcement of
the Emergency Arbitrators' interim award under Section 17(2) of the Arbitration and
Conciliation Act, 1996 (Act)1. The Delhi High Court barred Future Group from proceeding
with the transaction on February 2, 2021, and March 18, 2021 (detailed ruling). FRL, on the
other hand, challenged the above order before the Delhi High Court's Division Bench, which

1
Section 17(2), Arbitration and Conciliation Act, 1996
stayed the Single Bench's decision. As a result of which a Special Leave Petition was filed and
the Supreme Court stopped all proceedings before the High Court of Delhi

ISSUES RAISED
The following are the issues raised in the above case –
1. Whether the emergency arbitrator (EA) appointed is defined under the Arbitration and
Conciliation Act? Whether the interim order of the EA is null and void?

2. Whether the EA misapplied the Group of Companies doctrine which arguably applies
only to proceedings under s.8 of the Act?

3. Whether an ‘award’ delivered by an Emergency Arbitrator can be considered under an

order as per s.17(1) of the act?

4. Whether an order passed under s.17 (2) by a Single Judge of the High Court is in
enforcement of the award of the Emergency Arbitrator and appealable in nature?

ARGUMENTS FROM THE APPELLANTS SIDE

The following were the contentions from the Appellants side –
• The Appellants stated that in the proceedings of the court, Amazon supported the EA’s
Order arguing that the EA falls completely within the scope and definition of ‘Arbitral
Tribunal’ under Section 2(1)(d) of the Act. Also, the EA orders is valid because it was
passed in accordance with SIAC Rules.
• Another argument mentioned by appellants was there exists a party autonomy in
deciding the rules of adopting SIAC and the provisions of the Emergency Arbitration,
indicates parties’ agreement to be bound by EA’s order.
• Amazon also argued that Emergency Arbitration is recognised under Indian Law, citing
the rules of the Delhi International Arbitration Centre, Mumbai Centre of International
Arbitration, and Madras High Court Arbitration Centre, all of which provide for
Emergency Arbitration procedures.
• Amazon further stated that they were willing to support Future Group financially in any
way they could, but that it was surprised to see that their shareholding had been
diminished as a result of disputed transactions between Future Group and a restricted
person, namely MDA, in violation of the FCPL-SSA rules.
• Lastly, appellants contented that the Doctrine of ‘Group of Companies’ would apply in
the present case and relied on the following precedents of the Supreme Court- Chloro
Controls India Private Limited v. Server N Trent Water Purification Inc.2; Cheran
Properties Limited v. Kasturi and Sons Limited3 and MTNL v. Canara Bank4.

2
Chloro Controls India Private Limited v. Server N Trent Water Purification Inc.; (2013) 1 SCC 641.
3
Cheran Properties Limited v. Kasturi and Sons Limited; (2018) 16 SCC 413.
4
MTNL v. Canara Bank; 2019 SCC 995
 ARGUMENTS FROM THE DEFENDANTS SIDE
The following were the contentions raised from the defendants side –
• The defendants argued that the Section 2(1)(d) of the Act which defines Arbitral
Tribunal does not include the provisions of the Emergency Arbitration.
• Defendants argued that because the appointment of an EA under SIAC Rules was void,
any order issued by the EA would be void as well. The defendants reasoned that the
EA's order could never constitute an order of the 'Arbitral Tribunal' under the Act's
provisions or the SIAC Rules.
• It was further argued by the defendants that the Indian Courts have taken note of the
EA orders only in the context of the foreign seated arbitrations where the proceedings
were filed under Section 9 of the Act and not Section 17 of the Act5.
• Lastly, defendants stated that the group of companies doctrine did not apply in the
present case.

JUDGEMENT
The Arbitration and the conciliation Act does not expressly contains the word ‘Emergency
Arbitrator’. But the court mentioned that the parties have right to agree to the set Arbitral
Institutional Rules which means that the parties have right to use the provision of emergency
arbitration stated in the rules elected by the parties. Section 2(6), Section 2(8) and section 19(2)
of the act provides an indication towards the above stated provision.

With respect to the above stated provision, the Supreme Court of India mentioned that the main
idea behind all this was to respect and to protect the autonomy of the party during the ongoing
arbitration proceedings. The Supreme Court also stated that going with emergency arbitrator
and carrying proceedings for interim relief according to the rules of institution does not violate
the Arbitration and Conciliation Act, 1996 as no provision mentioned in the act prohibits such
practice.

The other thing which Supreme Court focused on was the definition of the Arbitral tribunal
and whether such definition includes the meaning of the emergency arbitrator under Section
2(1)(d) of the Act. By the simple reading of the Section and applying literal approach of
interpretation, Section 2(1)(d) of the Arbitration and Conciliation Act, 1996 does not define
the term emergency arbitrator. So, here ‘Arbitral Tribunal’ either includes a sole arbitrator or
a panel of arbitrators.

By interpretating the condition, the Supreme Court of India widened the scope of the Section
to include the concept of emergency arbitrator as well. By referring to the term mentioned
under Section 2(1)(d) of the act ‘unless the context otherwise requires’ along with Section

5
Raffles Design International Pvt. Ltd v. Educomp Professional Education Ltd. & Ors.; 2016 SCC Del Online
5521
2(1)(a) of the act, the Supreme Court of India clearly stated that any interim relief passed by
emergency arbitrator would fall under the definition of ‘Arbitral Tribunal’.

It was further held that both the orders passed by the Arbitral Tribunal and the Emergency
Arbitrator would be considered as same and could be enforced before the High Court. Their
does not exists any difference between such orders.

IMPACT ON THE ARBITRATION LAW

The Supreme Court re-emphasized the core idea of arbitration, namely, 'party autonomy,' and
referred to it as the 'guiding principle' in all cases as a result of the case. Parties to arbitration
have an inalienable right of choice, and emergency arbitration is one of those options.

The Supreme Court has repeatedly stated its worries about the vast majority of cases currently
pending in the courts. An emergency award tries to decongest the court system and provide
immediate relief to the parties in such a situation. This is significant because it makes India a
pro-arbitration jurisdiction for international dispute settlement and a hotspot by adopting
modern arbitral jurisprudence concepts. However, in order for India to become a global
arbitration powerhouse, the Act must include a mechanism for emergency arbitration.

Also, it lies under the responsibility of the courts to follow a proper guidelines while
adjudicating the matters of interim relief. The Emergency Arbitrator shall ensure proper
confidentiality and efficiency in the process of the proceedings.