Introduction

'The Arbitration and Conciliation Act, 1996', (the Act), is the cardinal law on arbitration and purported to expeditiously dissolve disputes with minimum judicial interference. The Act provides a timeline of maximum two years unless parties get the court's permission for further extension for the disposal of dispute since the appointment of the arbitral tribunal1. Despite such a provision, most cases fail to abide by the timeline and cause a setback to serving justice in cases where time has utmost significance. However, in urgent matters, a party can seek interim relief from the court prior to commencement of the arbitration proceeding2 or from arbitral tribunal after the commencement of the arbitration proceeding3. The Act has no provision for interim relief without going to court or prior to the appointment of arbitral tribunal.

Therefore, the notion of 'Emergency Arbitration' has become popular among parties to arbitration.

'Emergency Arbitration' is an evolving practice, in which both parties agree to institutional arbitration, and an emergency arbitrator is appointed by the arbitral institution to deal with application for interim relief in aid of final relief, on a short notice due to lack of time or an urgency pertinent to the matter in dispute. Emergency arbitrator would grant any interim relief safeguarding the interest of applicant, if the applicant establishes that case is prima facie in his favor and denial of grant of interim relief would cause irreparable loss to him.

Time is the essence of 'Emergency Arbitration' therefore it has utmost significance in cases where urgency doesn't allow waiting for the constitution of an arbitral tribunal to substantially resolve the dispute. Many arbitration institutions have incorporated the rules on emergency arbitration. Countries like Singapore, Hong Kong, the United Kingdom, and others, have recognized 'Emergency Arbitration' and incorporated changes into their legal systems to enforce such 'Emergency Award' (Emergency award is award given in Emergency arbitration)4.

The Act, however, neither acknowledges 'Emergency Arbitration/Award' nor incorporates any provision to enforce 'Emergency Award' despite the 246th Law Commission's report5 recommending acknowledgement of the concept of 'Emergency Arbitration/Award' in the Act. Enforcement of arbitral award depends upon the seat of arbitration6. In Amazon.com Investment Holdings LLC v. Future Retail Limited & Others7, ('Amazon Case') the apex court held that the 'Emergency Award' pronounced in Indian-seated arbitration is enforceable. However, the law is not settled on whether the 'Emergency Award' pronounced in foreign-seated arbitration is enforceable or not. Therefore, this article seeks to analyze this question by discussing the reasoning of the apex court in 'Amazon Case'.

Enforcement of Emergency Award in Indian-Seated Arbitration

Part I of the Act deals with Indian-seated arbitrations. Therefore, it's necessary to analyze whether provisions under Part I of the Act contemplate 'Emergency Arbitration/Award' or not.

In 'Amazon Case' the Apex court has held that the 'Emergency Award' pronounced in Indian-seated arbitration is enforceable as it is an interim award given under Section 17 of the Act. The issues for determination before the court were as follows.

Whether a party has the autonomy to opt for emergency arbitration?

The term 'Emergency Arbitration' is nowhere used in the Act. However, in most jurisdictions' exceptions have been allowed to the parties' discretion by adding the term "unless otherwise agreed by the parties". 'Emergency Arbitration' is a procedural aspect of arbitration and has developed through institutional arbitration. It is important to consider whether provisions of the Act allowing the party to submit their dispute to institutional arbitration also allows them to agree for 'Emergency Arbitration' or not. Relevant provisions are Section 2(6), 2(8) and 19(2) of the Act.

Section 2(6) of the Act allows parties to authorize any arbitral institution to determine the issue that has to be determined by them. If parties have authorized any institution to determine the issues, then according to Section 2(8) of the Act, parties can agree to abide by the rules of the institution including the rules pertaining to 'Emergency Arbitration'. Therefore, a combined reading of these provisions establishes that parties have the discretion to opt for 'Emergency Arbitration', which is evident from and in consonance with Section 19(2) of the Act that allows parties to agree on the procedure to be followed by the arbitral tribunal in conducting its proceedings.

Therefore, the Apex Court in 'Amazon Case' reiterates that the party autonomy8 is corner stone of arbitration, and submission of a dispute to 'Emergency Arbitration' is within all nooks & corners of the Act and doesn't bypass any compulsory statutory provision9.

Download : INDIAN LEGAL IMPETUS Newsletter - February 2023 Volume XVI, Issue II

Footnotes

1 The Arbitration and Conciliation Act, 1996 (Act 26 of 1996), Section 23(4) and Section 29

2 Id., Section 9

3 Id., Section 17

4 Ravi Shankar Prasad, "Report of the High Level Committee to Review the Institutionalization of Arbitration Mechanism in India, (30th July, 2017)", page 76, (January 22, 2023, 09:52 PM), https://legalaffairs.gov.in/sites/default/files/Report-HLC.pdf

5 Id., page 77, (January 22, 2023, 08:41 PM), https://legalaffairs.gov.in/sites/default/files/Report-HLC.pdf

6 Bharat Aluminum v. Kaiser Technical Services, (Civil Appeal No. 3678 of 2007), decided on 6th September, 2012 by the Supreme Court of India

7 Amazon.com Investment Holdings LLC v. Future Retail Limited & Others, (Civil Appeal No. 4492-4497 of 2021), decided on 6th August, 2021 by the Supreme Court of India, Para 35-36

8 Antrix Corporation Ltd. V. Devas Multimedia Pvt. Ltd. (2014) 11 SCC 560

9 Amazon.com Investment Holdings LLC v. Future Retail Limited & Others, (Civil Appeal No. 4492-4497 of 2021), decided on 6th August, 2021 by the Supreme Court of India, Para 17

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