Emergency Arbitration in India: Illuminated by Amazon v. Future Retail

Authored by - Arsh Anand (Student, Law College Dehradun, faculty of Uttaranchal University)

Introduction

The concept of Emergency Arbitration gained recognition in Indian jurisprudence during a Civil Appeal under Section 17(1) of the Arbitration and Conciliation Act, 1996 [“Arbitration Act”] for enforcement of an order passed by an emergency arbitrator in the case of Amazon.com NV Investment Holdings LLC v. Future Retail Limited & Ors. (Civil Appeal Nos. 4492-4493 Of 2021).

The order was passed by the emergency arbitrator appointed by Singapore International Arbitration Centre (SIAC) from the SIAC’s emergency proceedings which was conducted in India. The matter raised serious concern over enforceability of an emergency arbitration order in India by a foreign-seated arbitral tribunal when the governing statute (i.e. Arbitration Act) is silent about it.

Background

The parties were related by a Shareholders and Share-Subscription Agreement (2019) including an arbitration clause seated in New Delhi and SIAC as lex arbitri which restrained the respondent party from encumbering/transferring/selling/divesting/disposing of its retail assets to a list of “restricted persons” against an investment of Rs. 1,431 crores. The cause of action arose when FRL (in 2020) entered into a transaction with the Retail Group (or Mukesh Dhirubhai Ambai Group), which was a restricted person as per the agreement. 

Aggrieved by this, the petitioners invoked arbitration under the SIAC rules seeking emergency interim injunctions against the transaction. The tribunal after hearing from the parties passed award within 20 days, ordering injunctions against the disputed transaction between FRL and MDA group. FRL filed a Civil Suit u/s 17(2) in DHC alleging the appointed emergency arbitrator as coram non judice and action as “tortious interference” to their civil rights.

The single judge bench of DHC held that, award by an emergency arbitrator qualifies as an award u/s 17(1) of the Arbitration Act. The division bench of DHC though not ruled on finality of the award passed by tribunal but stayed the enforcement order of single judge bench. Further, a Special Leave Petition (SLP) was filed in the Supreme Court against the ruling of DHC which granted a stay on the award.

Ruling of the Supreme Court- A judicial reform in Arbitration in India

In the light of the subject matter of dispute, two main issues were raised before the Supreme Court:

1.     Whether an order passed by emergency arbitrator under a foreign-jurisdiction qualifies as an interim award u/s 17(1) of the Arbitration and Conciliation Act, 1996?

2.    Whether an enforcement order u/s 17(2) of the Arbitration and Conciliation Act, 1996 by the High Court is appealable?

The Supreme Court contemplated and addressed the issue with gravity and ruled with the “Grundnorm of Arbitration” i.e. “Party Autonomy”. The Supreme Court reiterated the ruling of Centrotrade Minerals & Metal Inc. v. Hindustan Copper Ltd.[1] recognised that “Party autonomy is virtually the backbone of arbitrations”. The court reaffirmed the S. 2(6) r/w 2(8) and 19(2) which provides expressive power to the party in arbitration for steering the course of arbitration agreement and the procedure. 

The court clearly observed that, the contract must be interpreted in the context of intention of the parties that how they wanted to work out the provisions of agreement. Based on this, the court ruled that, the Act itself does not prohibit the enforceability award passed by the emergency arbitrator. Per contra, the provisions of the Act upheld the principle of party-autonomy which endorses the application of institutional rules, as agreed by the parties.

The Supreme Court took a liberal interpretation approach and ruled that, with aspect to the statutory context, the enforcement of award passed by single bench of DHC in the S. 17(2) petition is enforceable as the definition of Arbitration as defined u/s 2(1)(a) r/w S. 2(6) and 2(8) include the arbitral award (u/s 2(1)(c)) passed by the emergency arbitrator. When broadly interpreted, such interim orders passed by Emergency Arbitrators under the rules of a permanent arbitral institution would qualify as interim award u/s 17(1) of the Act.

The Supreme Court observed that, since the parties themselves have agreed for the arbitration agreement to be ruled by SIAC rules, which clearly stipulates that award includes award of an emergency arbitrator, the judgement debtor cannot claim the constituted tribunal by the SIAC to be coram non judice. The choosing of SIAC as lex arbitri is a clear ad idem of parties to abide by the granted award.

Most significantly, the Court showed a pro- arbitration approach by referring to S. 9(3) of the Act and observed that, the court must respect the adopted mechanism and recognise such interim orders as award constitutive in “decongesting the civil courts and affording expeditious interim relief to the parties”.

Addressing the second issue, the court observed that, S. 37(2)(b) allows appeals to the court against the order of the arbitral tribunal u/s 17(1) of the Act. 

The court corroboratively clarified that, prior to the 2015 Amendment, S. 37(2)(b) referred to S. 17 as a whole but post amendment it was not amended accordingly. Further, the court affirmed that, the scope and purpose of the legal fiction u/s 17(2) of the Act is limited only to the enforcement of the award and to be treated as if a decree of the court.

The same cannot be used to scrutinize the interim award by appeal under the Code of Civil Procedure, 1908. Such appeals are maintainable only u/s 37 of the Act.

Post-Amazon v. Future Retail Legal Reforms

Nevertheless, the Arbitration and Conciliation Act, 1996 does not provide a direct mention of application of Emergency Arbitration in India, it has been recognized as a pro forma step in the arbitration which can used effectively to provide urgent interim relief to the aggrieved party prior to the constitution of the formal arbitral tribunal. 

The judgement has now carved a pathway for enforcement of such awards, in case the parties attempt to opt out of contractual obligation, S. 9 can be invoked as de facto route for such enforcements. Indian Arbitral institutions including Mumbai Centre for International Arbitration (MCIA) and Delhi International Arbitration Centre (DIAC) have adopted and enshrined Emergency Arbitration in their updated rules of 2025. This shows a pro-active approach of India’s prospect towards a global arbitration landscape.

Conclusion

The liberal interpretative approach of the apex court in India’s one of the largest M&A cross-border arbitration dispute Amazon v. Future Retail has shown India’s approach towards adoption of pro-arbitration mechanism. 

The judgement has removed the legal ambiguity by ruling on emergency arbitration which previously was a legal grey area in Indian jurisprudence of arbitration. Consecutively, now the orders and awards by emergency arbitration under the rules of institution now has gained recognition and enforceability. However, the ad-hoc emergency arbitration is still a matter of subject to be scrutinized by the court for its recognition and enforceability.

[1] (2017) 2 SCC 228