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SC: Amazon got relief in arbitration dispute with Future Retail Limited on it’s merger with Reliance Group

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Court :
Delhi High Court

Brief :
The Hon'ble Supreme Court held that, the order passed by the Arbitrator under SIAC Rules is an order under Section 17(1) of the Arbitration Act and enforceable as an order of the Court under Section 17(2) of the Arbitration Act.

Citation :
Civil Appeal Nos. 4492-4493 of 2021, Civil Appeal Nos. 4494-4495 of 2021, Civil Appeal Nos. 4496-4497 of 2021

In the case of Amazon.com NV Investment Holdings LLC v. Future Retail Limited & Ors. [Civil Appeal Nos. 4492-4493 of 2021, Civil Appeal Nos. 4494-4495 of 2021, Civil Appeal Nos. 4496-4497 of 2021], the Hon'ble Apex Court has approved the Emergency Award passed by the Singapore International Arbitration Centre ('the SIAC'), which stalled the Rs. 24,731 crore deal between Future Retail Ltd and Reliance Retail in India.

Brief facts

Amazon.com NV Investment Holdings LLC ('the Appellant') filed an appeal before the High Court of Delhi under Section 17(2) of the Arbitration and Conciliation Act, 1996 ('the Arbitration Act') to enforce the award/order dated October 25, 2020 as held by the SIAC.

The Future Retail Limited ('the Respondent') contended that, Arbitrator award did not have any place in the Indian statute books and hence award of the SIAC Arbitrator cannot be enforced under Section 17 of the Arbitration Act.

The division bench of Hon'ble Delhi High Court put stay on enforceability of the SIAC Arbitrator award, which restrained the Respondent from going ahead with its deal with Reliance Retail, under the Indian laws.

Important Question in the appeal

Aggrieved with the decision of division bench of Delhi High Court, the Appellant moved to the Apex Court seeking inter alia, whether an 'award' delivered by an Emergency Arbitrator under the Arbitration Rules of the SIAC can be said to be an order under Section 17(1) of the Arbitration Act.

Important Observations

  1. Emergency Arbitrator's award holds good under Section 17(1) of the Arbitration Act, and it would be wholly incorrect to consider that this section excludes Emergency Arbitrator's award.
  2. Law Commission of India, in its 246th amendment, suggested an amendment to give recognition to Emergency Arbitration, however, the same had not yet been accepted. To this, the apex court observed the fact that Law Commission's recommendation is yet to be accepted by the Parliament, would not under any circumstance, allow the courts to preclude from interpreting that the recommendations forms part of 'apt interpretation of law.'
  3. Parties which did not participated in Emergency Arbitration proceeding, could not later come up with the defence that it would not be bound by the award.
  4. Section 2(1)(d) of the Arbitration Act, which defines an arbitral tribunal, is wide enough to include an Emergency Arbitrator, as it is part of the sole arbitrator. Therefore, there exist the same powers to an Arbitrator as provided to the arbitral tribunal under the Arbitration Act.

Held

The Hon'ble Supreme Court held that, the order passed by the Arbitrator under SIAC Rules is an order under Section 17(1) of the Arbitration Act and enforceable as an order of the Court under Section 17(2) of the Arbitration Act.

Consequently, the Hon'ble Supreme Court ruled in favour of the Appellant and put on hold the merger deal of Future Retail Limited and Reliance Retail.

 

Bimal Jain
on 10 August 2021
Published in LAW
Views : 25
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