In a recent judgment, a two-judge bench of the Supreme Court upheld the judgment of the Singapore International Arbitration Centre which had stayed the deal between Future Group and Reliance Industries Limited.
In August 2020, Future Retail had announced a business deal with Reliance Retail to which Amazon objected stating that the deal would violate the contract that Amazon had with Future Coupons, Future Retail’s promoter firm. Future Group is India’s second-largest retailer and owns and owns popular brands such as Big Bazaar. Amazon took the dispute before the emergency arbitrator of Singapore International Arbitration Centre and the emergency arbitrator stayed the $3.4 Billion deal between Future Retail and Reliance Industries. The purpose of emergency arbitration is to provide urgent relief to the parties. It is interim relief that is granted before the matter is finally adjudged.
THE SUPREME COURT JUDGMENT
The Supreme Court held that the emergency arbitrator’s decision was within the ambit of the provisions of the Arbitration and Conciliation Act of 1996. Section 17 of the 1996 Act stipulates a mechanism through which the parties can seek interim relief before the final judgment is delivered by the arbitration tribunal. Since the parties had agreed to the arbitration administered by the Singapore International Arbitration Centre, the decision of the emergency arbitrator was held to be valid and enforceable. The order of the emergency arbitrator under Section 17 of the 1996 At could not be challenged under Section 37 of the Arbitration Act.
The Court also referred to the Justice B N Srikrishna Committee which had recommended that emergency arbitration awards must be permitted in India. The Committee had referred to the international trend in countries such as Singapore and the United Kingdom where such awards are enforceable.
Furthermore, the apex Court held that the appeal filed by Future Retail before the Division Bench of the Delhi High Court against the order of a single judge Bench of the High Court was not maintainable under the Arbitration and Conciliation Act of 1996. The Single Judge bench had rules in favor of the execution of the emergency award of the Singapore International Arbitration Centre. The Supreme Court highlighted the importance of arbitration in reducing the backlog of cases in the Indian judiciary.
Thus, the apex Court rules in favor of Amazon with respect to both the issues.
The parties have approached the Singapore International Arbitration Center to have a final judgment delivered on the matter by the permanent bench. If the bench rules in favor of Amazon, then it would effectively put an end to the deal between Future Retail and Reliance Industries.
In any case, the Supreme Court judgment has provided a big relief to Amazon which has been engaged in several legal disputes over the deal between Future Group and Reliance Industries. Amazon has invested $6.5 billion in India and would have suffered huge losses had the Supreme Court not intervened and ruled in favor of the execution of the emergency arbitrator’s award.
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