Case Brief Amazon.com Nv Investment Holdings Llc Vs Future Coupon Private Limited & Ors.

Sreeja Pattanaik, Intern

Amazon.com Nv Investment Holdings Llc Vs Future Coupon Private Limited & Ors.

Case Citation: 2021 SCC OnLine Del 1279

Bench: J.R. Midha

Date of Decision: 18th March, 2021

FACTS OF THE CASE:

In this situation, Amazon (Amazon.com NV Investment Holdings LLC) and Future Group (Future Retail Ltd -FRL and Future Coupons Private Ltd -FCPL) engaged in a series of agreements. These agreements granted Amazon exclusive access to Future Group's retail assets and required Future Group to get Amazon's written approval before designating the assets. Future Group was also banned from transferring its retail assets to 'restricted persons' under the terms of the agreements. Following that, the Reliance Industries Group, which was classified as a "restricted person," engaged in a deal with the Future Group for a future amalgamation, transferring the retail assets to the Reliance Group. This was the controversial deal that resulted in arbitration proceedings between Amazon and Future Group. According to the arbitration clause in the agreement, Amazon launched arbitration against Future Group under the SIAC Rules (Rules of Singapore International Arbitration Centre). It was also predetermined that the seat of arbitration would be in New Delhi, India. On October 25, 2020, an emergency arbitrator was granted to Amazon for Interim Relief. However, because Future Group did not comply with the emergency award, Amazon filed an enforcement action in the Delhi High Court. The case was eventually appealed to the Supreme Court, which decided on the issues listed below.

ISSUES

1. Whether an award granted by an Emergency Arbitrator under the SIAC Rules considered an order under Section 17(1) of the Act?

2. Whether an order issued by a Single Judge of the High Court under Section 17(2) of the Act in order to enforce the decision of an Emergency Arbitrator appealable?

ANALYSIS

The Supreme Court ruled that emergency arbitration was covered by section 17(1) of the Indian Arbitration Act. The court emphasized the significance of party autonomy and the right of parties to delegate decision-making authority to anyone (even an EA). It also alluded to the SIAC Rules, which provide that an EA has all of the powers of an arbitral tribunal. The Supreme Court ruled that section 17(2) of the Emergency Arbitration and Conciliation Act (EA) may be interpreted to allow EA judgments to be enforced in India. The court stated that EA orders are an essential step in decongesting the civil courts and providing parties with expedited interim relief. It further held that a court order executing an EA order or an interim order of an arbitral tribunal would not be appealable under section 37 of the Act. Section 9 states that once an arbitral panel has been established, an Indian court would not ordinarily hear an application for interim remedies. According to the Supreme Court's decision in Amazon, once an EA has been appointed (even if the arbitral panel has not been formed) in an India-seated arbitration, the Indian courts are likely to deny a plea for interim relief. However, as previously stated, in the case of arbitrations held outside of India, Indian courts may consider a section 9 application for interim relief in order to indirectly enforce an EA judgment. The Indian Supreme Court has now given an evolving meaning to the concept of an arbitral tribunal, allowing it to include an EA (for the purposes of section 17). It is also a purposeful interpretation that carries out the parties' commitment to being bound by EA judgments. It should be emphasized that the ruling does not hold that all EA judgments are enforceable in India under Section 17. Section 17 is found in Part I of the Act and, with a few exceptions, applies solely to arbitrations held in India. The aforementioned transaction obviously resulted in Amazon holding protection rights in FRL, which would be rendered ineffective by the sale of FRL's retail section to Reliance. While advancing the theory of Group of Companies from a technical legal standpoint, the judgment will also be a significant incentive to increasing Foreign Direct Investment in our nation. This judgment is expected to boost international investors' confidence in investing in India and giving support to Indian companies, which had previously been exceedingly gloomy due to the CCI's strict scrutiny. The Indian Law in regard to FDI is typically utilized to ensure that there are adequate obstacles for foreign investors in India, keeping them at bay and averting their huge entry into the massive Indian markets.

CONCLUSION

The decision resulted in the Supreme Court re-emphasizing the basic concept of arbitration, namely "party autonomy," and referring to it as the "guiding principle" in all cases. Arbitration provides parties with an unassailable right of choice, and emergency arbitration is one such option. It has been established that an emergency arbitral ruling rendered in an Indian seat is enforceable in Indian courts. However, no precedent has yet defined whether or whether an emergency arbitration decision made in a foreign seat is enforceable in India. As a result, it is typically recommended that foreign parties to the arbitration agreement select India as the seat of arbitration so that, in the case of an emergency arbitral decision, the Indian courts cannot reject the legitimate execution of such an award. We can only hope that the result of this case will clarify India's position on emergency arbitration in an ad hoc situation.