In a setback to Mukesh Ambani, the Supreme Court stalled the proposed £2.47 billion Future-Reliance deal and ruled that Singapore’s Emergency Arbitrator (EA) award restraining Future Retail Ltd (FRL) from going ahead with its merger with Reliance Retail is valid and enforceable and allowed the plea of multinational e-commerce giant Amazon.
A bench of Justices R F Nariman and B R Gavai quashed the order passed by a division bench of the Delhi high court, which had virtually allowed Kishore Biyani’s Future group to go ahead with the deal by staying single bench order which had directed the group to maintain status quo in view of Singapore’s EA award. The SC bench also ruled that the order passed by the single bench of the HC for the enforcement of the Singapore arbitration award could not have been challenged.
The bench framed two questions - first whether an award of Emergency Arbitrator under the Arbitration Rules of the Singapore International Arbitration Centre can be deemed to be an order under the Arbitration Act, and second, whether an order passed for enforcement of the award by a single judge of the HC can be appealed. The SC passed verdict in favour of Amazon on both counts.
“We, therefore, answer the first question by declaring that full party autonomy is given by the Arbitration Act to have a dispute decided in accordance with institutional rules which can include Emergency Arbitrators delivering interim orders, described as ‘awards’. Such orders are an important step in aid of decongesting the civil courts and affording expeditious interim relief to the parties,” the bench said.
The bench said that a party, after having agreed to institutional rules and participating in an Emergency Award proceeding, is bound by the award and cannot be allowed to ignore the award by stating that it is a nullity. Interpreting the provisions of Arbitration Act, the bench said Section 17, as construed in the light of the other provisions of the Act, leads to the clear conclusion that such emergency award is made under the provisions of Section 17 (1) and can be enforced under the provisions of Section 17(2).
