I. INTRODUCTION

1. The asset acquisition deal between Future Retail Limited ("Future Retail") and Reliance Retail Ventures Limited ("Reliance Retail") and the subsequent legal disputes raised by Amazon India has brought the mechanism of 'Emergency Arbitrations' in spotlight as status, validity, and enforceability of such proceedings / mechanisms in India is being questioned. Summarily - Amazon India sought emergency award against Future Retail from concluding its deal with Reliance Retail, before an Emergency Arbitrator appointed in terms of Schedule I of the Rules of Arbitration of the Singapore International Arbitration Centre. Amazon India was able to secure an emergency award. However, its recognition and enforcement in India is not so straightforward. Emergency Arbitration is a mechanism which "allows a disputing party to apply for urgent interim relief before an arbitration tribunal has been formally constituted"1.

2. At the outset, it is imperative to specify that the Arbitration and Conciliation Act, 2015 ("Arbitration Act") does not define or prescribe Emergency Arbitrations. This creates a peculiar situation where there are no specific provisions for recognition and enforcement of awards passed in Emergency Arbitrations. The issue is further amplified as the New York Convention on Recognition and Enforcement of Foreign Arbitral Awards, 1958 does not specifically provide for Emergency Arbitrations as such proceedings do not attained finality being interim in nature. In other words, even if a party obtains an award as an outcome of Emergency Arbitration, there appears to be no clear or straightforward route to seek enforcement of such awards in the form of urgent interim measures, in India.

II. INCLUSION OF EMERGENCY ARBITRATIONS IN RULES OF ARBITRATION AND LEGISLATIONS

3. Numerous arbitration institutions such as the International Centre for Dispute Resolution (ICDR), Stockholm Chamber of Commerce (SCC), International Chamber of Commerce (ICC), Singapore International Arbitration Centre (SIAC) and Hong Kong International Arbitration Centre (HKIAC) have amended their rules to prescribe Emergency Arbitrations.2 In an effort to keep up with universal acceptance of the mechanism and for seamless inclusion of the mechanism in domestic laws, various States – such as Singapore and Hong Kong - have implemented laws recognizing the mechanism of Emergency Arbitrations and the awards passed as a result thereof.

4. In India – as also highlighted above – the Arbitration Act does not recognize the mechanism of emergency awards. However, various arbitration institutions such as Indian Council of Arbitration (Article 33), the Delhi International Arbitration Centre (Rule 14), the Nani Palkhivala Arbitration Centre (Rule 20(A)), Mumbai Centre for International Arbitration (Rule 14) prescribe provisions for Emergency Arbitration.

5. The 246th Law Commission Report recommended broadening the definition of "arbitral tribunal" by including "in the case of an arbitration conducted under the rules of an institution providing for appointment of an emergency arbitrator, includes such emergency arbitrator". Be that as it may, the recommendation did not translate into legislation.

III. REQUIREMENTS FOR RELIEF UNDER EMERGENCY ARBITRATIONS

6. Grant of relief in Emergency Arbitrations, inter alia, requires examination of following issues:

  1. jurisdiction of Emergency Arbitrator / Tribunal;
  2. merits of the case evidencing prima facie case in favor of an applicant;
  3. possibility of irreparable harm; and
  4. urgency.

7. Considering that any award passed in an Emergency Arbitration is going to be in a form of interim measure, the Tribunal should pass such award only in cases where the relief aids final adjudication of the disputes.

IV. MANNER OF ENFORCEMENT OF EMERGENCY AWARDS IN INDIA

8. Evidently, Emergency Arbitrations and awards originating thereof are not recognized under Indian legislation. However, Indian courts appear to have taken pro-enforcement approach towards such awards by allowing parties to institute proceedings under Section 9 of the Arbitration Act for same reliefs. Section 9 of the Arbitration Act provides for interim measures by courts. Notably, Arbitration and Conciliation (Amendment) Act of 2015 increased the scope of Section 9 to include international commercial arbitrations even if the seat of arbitration is outside India, unless parties agree otherwise.

9. The Honorable High Court of Bombay – January 22, 2014 – in the matter of HSBC PI Holdings (Mauritius) Limited v. Avitel Post Studioz Limited and Ors.3 states as under:

"21. As regards the Petitioner's right to obtain reliefs under Section 9 in the present case, the same is based on two premises. First, the emergency arbitrator has passed an interim award dated 28th May 2012 holding that protective orders are required to be passed. The said interim award has not been challenged by the Respondents. The issue therefore has been decided by a competent forum and this decision has become final and binding on the parties. On the basis of the principles of issue estoppel the said decision is binding and the Respondents are not entitled to re-agitate the question as to whether the Petitioner is entitled to any protective order. The second premise is that independently of the interim award passed by the Arbitral forum, the Petitioner has made out a case for grant of reliefs under Section 9 of the Indian Arbitration Act.

...

79. Having taken a view that law of Singapore would apply to the parties in this proceedings and under laws of Singapore, respondents would have remedy of challenge the interim awards before the appropriate court at Singapore and the respondents not having challenged the said jurisdictional award and interim award, in my view the said jurisdictional award and interim award made by the arbitral tribunal between the same parties arising out the same agreement in the arbitration proceedings have become final and conclusive on the issue of jurisdiction and the respondents are barred by the principles of estoppel in re-agitating the same issue in this proceedings..."

10. It is critical to note that the emergency arbitrator passed its interim award on May 28, 2012. The decision of the Learned Single Judge was challenged before the Honorable Division Bench of the High Court of Bombay4. The Honorable Division Bench – on July 31, 2014 (i.e. more than two years after passing of emergency award) – in its decision states, "28. It is to be noted that even without there having been any emergency or interim awards from the Arbitral Tribunal at Singapore, in light of the provisions contained in clause 16.4 SSA, the HSBC could have invoked the provisions of section 9 of the Act. Merely because, in the present case such emergency or interim awards have been made by the Arbitral Tribunal at Singapore, that would make no difference, particularly when it comes to determination of the jurisdiction of the Indian Courts to grant interim measures by resort to section 9 of the Act. Ultimately, it has to be borne-in-mind that we are dealing with an international commercial arbitration, where perhaps the emergency or interim awards may be enforceable in other parts of the globe, without any further ado, on account of inapplicability of restrictions akin to those contained in sections 46 to 49 of the Act..."

11. Notably, the Honorable Supreme Court of India recently – on August 19, 2020 – passed its decision in challenge to the decision of the Division Bench dated July 31, 2014. However, the issue relating to the validity of Emergency Arbitration or enforceability of award arising out of such proceedings was not raised or discussed.

12. Further, the High Court of Delhi – on October 7, 2016 – passed a judgment allowing a petition under Section 9 of the Arbitration Act in relation to an Emergency Award passed on October 6, 2015.5 The Honorable Court in the judgment states as under:

"99. In the circumstances, the emergency award passed by the Arbitral Tribunal cannot be enforced under the Act and the only method for enforcing the same would be for the petitioner to file a suit.

100. However, in my view, a party seeking interim measures cannot be precluded from doing so only for the reason that it had obtained a similar order from an arbitral tribunal. Needless to state that the question whether the interim orders should be granted under section 9 of the Act or not would have to be considered by the Courts independent of the orders passed by the arbitral tribunal. Recourse to Section 9 of the Act is not available for the purpose of enforcing the orders of the arbitral tribunal; but that does not mean that the Court cannot independently apply its mind and grant interim relief in cases where it is warranted."

V. CONCLUSION

13. The Honorable High Court Delhi has rightly opined that proceedings under Section 9 of the Arbitration Act is an independent remedy to be adjudicated without being influenced by any similar/identical relief adjudicated and decided in an Emergency Arbitration. It is merely a matter of chance that both the High Courts above arrived at the same conclusions as the respective emergency arbitrators. It is just a matter of time, when a Court in India may not follow the interim measure awarded in an Emergency Arbitration and arrives at a contrary finding. Such a situation is avoidable by enacting a provision for recognition and enforcement Emergency Arbitrations in the Arbitration Act to be in line with the recent international developments.

14. Further, another point of concern (which may even be considered a bigger point of concern) is the delay caused for obtaining emergency interim measures in India. Even after a party has been awarded an award in an Emergency Arbitration, it is required to initiate a fresh proceeding under Section 9 of the Arbitration Act to secure the same relief added with the fact that Section 9 may or may not be taken up or be disposed of on an urgent basis.

15. The makeshift mechanism of recognition and enforcement of emergency awards – by instituting a fresh petition under Section 9 of the Arbitration Act – may not be a sustainable way moving forward and the legislature may consider introducing a provision in the Arbitration Act this regard.

Footnotes

1. Alnaber, R., Emergency Arbitration: Mere Innovation or Vast Improvement, Arbitration International, Vol. 35, 2019, pp. 441-472.

2. See, https://www.conventuslaw.com/report/india-emergency-arbitration-and-its-enforceability/, last seen on November 28, 2020 at

3. MANU/MH/0050/2014

4. Avitel Post Studioz Ltd. vs. HSBC PI Holdings (Mauritius) Ltd., MANU/MH/1147/2014

5. Raffles Design International India Private Limited and Ors. v. Educomp Professional Education Limited and Ors., MANU/DE/2754/2016

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