Future v. Amazon – Setting the position on enforcement of Emergency Arbitration Awards

In the Aarna Law ADR Update/I/03, we provided an overview on the validity and enforcement of emergency arbitration awards in India by covering developments in the Future v. Amazon saga that had transpired until 6 March 2021. In a recent development in the same saga, a Single Judge bench of the Delhi High Court, presided by Hon’ble Justice J.R Midha, upheld the validity of an order passed by an emergency arbitrator under the Arbitration and Conciliation Act, 1996 (the “Act”) and allowed Amazon’s petition to enforce an Emergency Arbitration Order dated 25 October 2020 (“EA Order”) that ensued from an emergency arbitration administered by the Singapore International Arbitration Centre (“SIAC”).

Legal Status of Emergency Arbitrator and enforceability of the EA Order:

The Court held that an emergency arbitrator has a valid legal status and is an arbitrator for all intents and purposes under the Act. The court reached to such a conclusion by a conjoint reading of Sections 2(1)(d), 2(6), 2(8),19(2) of the Act and the SIAC Rules, 2016 which it held would form part of the arbitration agreement between the parties. As an effect, the Court held that an emergency arbitrator has the same powers to make interim orders, as the Court has, per Section 17(1) of the Act and accordingly as per Section 17(2) of the Act, the interim order issued by an emergency arbitrator is enforceable in the same manner as if it was an order of the Court.

Application of the ‘Group of Companies’ Doctrine:

Future has constantly held the position that Future Retails Limited (“FRL” – the 2nd Respondent in the Petition) is not a party to the Shareholders Agreement signed between Future Coupons Private Limited (the 1st Respondent in the petition) and Amazon and that an arbitration cannot be invoked against FRL. The Emergency Arbitrator however applied the ‘Group of Companies’ doctrine to find that it has jurisdiction over FRL. The Court upheld the findings of the Emergency Arbitrator in applying the doctrine and held that FRL is a proper party to the arbitration. The Respondents having not seriously questioned the Emergency Arbitrator’s application of the doctrine, the Court found that it does not warrant the Court’s intervention.

Nullity of the EA Order:

According to Future, the EA Order is null and void and not binding. However, Future had not disputed the validity of the agreements at issue. Therefore, the Court noted that the allegation of nullity was vague, and no specific arguments were advanced by Future to prove the nullity. The Court held that in absence of a specific challenge to the validity of the agreements at issue, the EA Order is not null and void.

To add further effect to its Order, the Court penalized Future for deliberately taking actions that were in violation of the EA Order and directed the deposit of INR .20,00,000/- towards the Prime Minister Relief Fund being used for providing COVID vaccination.