The Supreme Court, in the recent case of Amazon.com NV Investment Holdings LLC v Future Retail Ltd & Ors, answered two important questions. First, it held that an award by an emergency arbitrator appointed under the Arbitration Rules of the Singapore International Arbitration Centre was an order made in accordance with section 17(1) of the Arbitration and Conciliation Act, 1996, and therefore enforceable in accordance with section 17(2) as if it were an order made by a civil court. Second, it held that an order under section 17(2) for enforcement of an emergency award is not appealable under section 37 of the act.
In December 2019, Amazon invested more than INR14 billion (USD190 million) in Future Coupons Private Ltd (FCPL), a subsidiary of Future Retail Ltd (FRL), India’s second-largest offline retailer. Future Retail is owned by Kishore Biyani, the founder of Future Group.
It was agreed that the investment in FCPL would flow to Future Retail, but that Future Retail could not transfer its retail assets without the consent of FCPL. This, in turn, would not be granted without Amazon’s agreement. It was also agreed that Future Retail would not create any charge or encumbrance in favour of restricted persons, a category that included Reliance Industries Ltd (RIL).
In August 2020, Future Retail’s board resolved to amalgamate with RIL. Future Retail would cease to exist and its assets would pass to RIL.
Alleging breach of the agreement, Amazon invoked arbitration in October 2020 and applied to an emergency arbitrator for a stay of the amalgamation. The emergency arbitrator ordered Future Group not to enter into any transaction or amalgamation with RIL until the conclusion of the arbitration.
Future Group described the emergency order as a nullity and pursued the transaction with RIL. Future Group also unsuccessfully applied to Delhi High Court for an anti-arbitration injunction. Amazon applied to the same court under section 17(2) of the act to enforce the emergency award. In March 2021, the high court eventually decided that the emergency arbitration order was one that could be enforced under section 17(2). The case then moved to the Supreme Court, which stayed all orders until its final decision.
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