Amazon.com NV Investment Holdings LLC v. Future Retail Ltd. & Ors.

Case Name: Amazon.com NV Investment Holdings LLC v. Future Retail Ltd. & Ors. 

[(2022) 1 SCC 209]

Court & Bench: Supreme Court of India, Second Civil Appellate Jurisdiction; Division Bench comprising Hon’ble Mr. Justice R.F. Nariman and Hon’ble Mr. Justice B.R. Gavai

Date of Judgement: 6th August 2021

Patrties: Appellant/Petitoner –  Amazon.com NV Investment Holdings LLC (a Delaware company and indirect investor in Future Retail)indiankanoon.org; Respondents – Future Retail Ltd. (India’s second-largest offline retailer, “FRL”), Future Coupons Pvt. Ltd. (9.82% shareholder of FRL, “FCPL”), and members of the Biyani family and group (promoters of FRL), as well as related group companiesindiankanoon.org. For brevity, Respondents No.1–13 (including FRL, FCPL, and the Biyani family) are collectively referred to as the “Future Group” or “Biyani Group”. 

FACTS

Amazon in August 2019 invested  ₹1431 crore in FCPL under a share subscritption Agreement, intending that this investment “flow down” to FRL. Subsequently, the concurrent share holder’s agreements (FRL-SHA and FCPL-SHA) gave Amazon protective rights: FRL could not transfer or encumber its retail assets without FCPL’s (and thus Amazon’s) consent, nor sell to any “restricted person” (which included Reliance Industries). In August 2020 the Future Group entered into a scheme of amalgamation with the Reliance group, effectively disposing of FRL’s retail assets to Reliance.

Soon enough Amazon challenged this controversial transaction by initiating arbitration (SIAC Arbitration No.960/2020, seat New Delhi, SIAC Rules 2016) under the FCPL-SHA. Under the SIAC Rules, on 5th October 2020, Amazon sought emergency interim relief. An Emergency Arbitrator (EA), Mr. V.K. Rajah SC, was appointed and within weeks issued an “interim award” granting broad injunctive relief: specifically, Respondents were prohibited from taking any steps to implement the August 29, 2020 board resolution or complete the transaction with the Reliance group (among other directives). The EA’s order provided that its injunction would remain in effect until further order of the tribunal. 

The Future Group ignoring the EA award, pressed on with the regulatory filings. Meanwhile, FRL sued Amazon in Delhi High Court for tortious interference (C.S. No.493/2020) but interim injunction was refused to be granted. Amazon on the other hand filed petition in the same court under Section 17(2) of the Arbitration Act, 1996, to enforce the EA’s “award” as an order of the court. On 2nd February 2021, the Single Judge stayed the transaction (status quo) pending detailed reasons. FRL appealed that order and on 8th February, a Division Bench (Delhi High Court) stayed the Single Judge’s order. As a consequence, Amazon approached the Supreme Court by way of Special Leave Petition (SLPs (C) Nos. 2856–2857 of 2021) and thus on 22nd February, the Supreme Court permitted the NCLT scheme proceedings to continue but directed that no final sanction order be passed pending further consideration.

On 18th March 2021, the Delhi High Court Single Judge delivered a judgment holding that “an Emergency Arbitrator’s award is an order under Section 17(1) of the [Arbitration] Act”. Thus granting Amazon’s appeal to enforce the EA order and injunctions were issued. Against this decision, the Future Group (FCPL and FRL) appealed directly to the Supreme Court (Special Leave Petitions Nos.13547–13548/2021 and 13556–13557/2021). By interim order on 9th September 2021, the Supreme Court stayed further implementation of the Delhi HC’s order, pending final hearing.

ISSUES

The court based its judgment around two central questions:

1. Whether the EA’s “interim award” of 25 October 2020 can be treated as an “order” of the arbitral tribunal under Section 17 (1) of the Arbitration Act (i.e. made by the tribunal during arbitration proceedings).
2. Whether an order passed under Section 17(2) in enforcement of the EA’s award (in the Delhi HC) is appealable to this Court under Section 37 of the Arbitration Act.

ARGUMENTS OF THE PARTIES

APPELLANT – AMAZON

It was argued that the Arbitration Act embodies party autonomy and seek to foster arbitration (Sections 2(1)(a), 2(6), 2(8), 19(2)). Under institutional SIAC rules (agreed by the parties), the Emergency Arbitrator is explicitly empowered to grant interim relief and issue an “award”. Once an arbitration notice was filed (noticed deemed receipt under SIAC Rule 3.3), the arbitration has commenced for the purpose of Section 17. It was further contented that the definition of “arbitral tribunal” in Section 2(1)(d) should not exclude the EA. In context, Section 17(1) empowers the (institutionally appointed) arbitrator to make interim orders “during arbitral proceedings”; nothing in Section 17 forbids institutional rules. Accordingly, the EA, chosen by the same rules, is an “arbitral tribunal” for the purpose of Section 17(1). 

The counsel emphasized that an EA’s order cannot be a nullity unless set aside, and also that the non-signatory parties (the entire Future Group) were bound by the arbitration clause and the EA’s award, relying on group-of-companies precedents. Amazon also highlighted the legislative intent to decongest courts: the 2015 Amendment aligned Section 17 with Section 9 (court interim relief), and added a non obstante clause (a legal provision that gives a specific statute, rule, or contract overriding priority over any other conflicting laws or provisions) to Section 37(1) to limit appeals outside its four corners. In particular, appeals under section 37(2)(b) are limited to “granting and refusing an interim measure under Section 17” which b definition refers only to Section 17(1) and not Section 17(2). 

At last, it was stressed that orders enforcing an arbitral order under Section 17(2) are made under the Arbitration Act (with a fiction “as if” of a court order); such orders being under the Act, should not be appealable under CPC provisions if executed by Section 37.

RESPONDENTS – FUTURE GROUP

Counsel for FRL and FCPL conceded that an EA’s award is not wholly outside the Act, but argued that 17(1) of the Act could not have been intended to include an EA order. They noted that the Law Commission had suggested amending Section 2(1)(d) to recognize EAs, but Parliament declined this in the 2015 amendments implying legislative exclusion. The definition of “arbitral tribunal” in Section 2(1)(d) (qualified by “unless context otherwise requires”) was read strictly: an arbitral tribunal must be constituted between parties with power to render a final award, which an EA is not. The arbitration clause itself made the SIAC Rules subject to the Indian Arbitration Act (via an exclusive court-jurisdiction clause), so SIAC emergency provisions could not override the Act. Moreover, an EA is appointed before the main tribunal is constituted (SIAC Schedule 1), so its order is not made “during arbitral proceedings” within Section 17(1).

Further, in reference to the question of appeal, the FRL argued that enforcement under Section 17(2) is effectively in “supplementary” or “coercive” proceedings (Order XXXIX, CPC) – not under the Act hence appeals lie under the CPC. They pointed to Section 17(2)’s words “as if” creating a fiction that the order is a court decree. The Act’s appeal provision (Section 37) enumerates only awards and certain tribunal orders; it makes no provision for appeals from enforcement orders, so by parity with Section 36 (foreign award enforcement) Section 17(2) orders should be enforceable under CPC with appeals under CPC remedies. In sum, Respondents urged that an appeal under Section 37 from a Section 17(2) order is impermissible only if expressly barred, which they submitted it is not. 

JUDGMENT/ FINAL DECISION

The Supreme Court answered both the questions in favor of Amazon. 

• Emergency Arbitrator’s order is covered by Section 17(1): the court held that an Emergency Arbitrator appointed under valid institutional rules is “an arbitrator for all intent and purposes,” and his interim order is an order of the “arbotral tribunal” under Section 17(1). Thus, the EA’s 25 October 2020 injunctions were orders made during arbitration proceedings and enforceable under Section 17(2).
• No appeal lies under Section 37 against an enforcement order under section  17 (2): the court declared that the appeals by FRL/FCPL challenging the Delhi High Court’s enforcement order were held not maintainable and were dismissed. As a result, all prior interim orders (including the Delhi HC and interlocutory Supreme Court order on appealability) were vacated, the impugned Division Bench orders of the Delhi High Court were set aside and the appeals disposed of. 

Thus the final decree was that the Delhi HC’s enforcement (status-quo) order stood affirmed in principle (EA order is valid and enforceable), but FRL’s challenge by appeal was not maintainable so the Division Bench’s stay was vacated. 

RATIO DECIDENDI

The court’s analysis revolved around Sections 2(1)(d),17(1), and 17(2) of the Arbitration Act, in the context of institutional rules and party autonomy.

Definition of “Arbitral Tribunal” [Sec. 2(1)(d)] vs. Context: the judgment emphasized the saving words “unless the context otherwise requires” in the definition of arbitral tribunal. The judgment held that although Sec. 2(1)(d) normally contemplates a constituted tribunal capable of a final award, this definition must yield if the context of Section 17 suggests otherwise. Here, Sec. 17(1) deals with interim measures by an arbitral tribunal during arbitral proceedings. The court noted that “arbitral proceedings” is not separately defined and can include the stage when the EA is operating. 

Institutional Rules and Commencement: the SIAC Rules were carefully examined. The judgment highlighted that under SIAC Rule 3.3, the arbitration is “deemed to commence” on filing notice of arbitration. Thus by5th October 2020 Amazon’s arbitration was underway. Under SIAC Schedule 1, an Emergency Arbitrator can be appointed concurrently with the notice, and is empowered to grant interim relief. It also linked Sec. 9(3) and 17 (1) as part of single scheme: since parties agreed to arbiter interim relief (EA) once arbitration commenced, arbitral proceedings must be construed to include EA proceedings. 

“Unless context otherwise requires” – Inclusions: Para. 20 of the judgment states that Section 17(1)’s core purpose is to allow applications for urgent relief, and nothing in the act prohibits parties from adopting institutional rules. Hence, when SIAC rules are chosen, it results in the inclusion of the EA under the term “arbitral tribunal” by contextual requirement. Conclusively, an EA’s interim order falls within Section 17(1). The Judgment rejected the respondent’s narrow reading (relying on Traders v. Saluja and ors.) that the tribunal must exist in final form before Section 17 applies, finding those cases distinguishable. 

Section 17(2) – Enforcement and Appeals: Section 17(2) deems an interim order under Section 17(1) to be an order of a court, enforceable as such. The Court highlighted that post 2015, the concerned section (Section 17) spilt into sub-sections (1) and (2) but Section 37 was not amended to include the new sub-section. Thus, the appeal provision [Section 37(2)(b)] still refers only to appeals from tribunal orders granting or refusing interim measures under Section 17(1). The court favored that enforcement orders under Section 17(2) are in effect court orders (and indeed, the Delhi HC Single Judge acted under CPC Order XXXIX, Rule 2A). Since Section 37(2)(b) mentions only Section 17(1), there is no statutory right to appeal a Section 17(2) enforcement order. The Court through its judgment applied the principle that the Arbitration Act is a self-contained code: if an appeal is not provided within it four corners, none lies.

In conclusion, the Emergency Arbitrator’s interim order was held to be fully binding and enforceable under the Act, but subject to challenge only through the standard arbitral forum (e.g. by challenge in the tribunal and then a Section 34 if necessary), rather than by direct appeal from enforcement.

CONLUSION/ OBSERVATIONS

The decision made in this case is of landmark significance for Indian arbitration. It establishes Emergency Arbitration as a valid source of interim relief under Part I of the Act, provided the arbitration is seated in India and parties have opted into institutional EA procedures. The court also honored party autonomy by recognizing the EA as an “arbitral tribunal” under Sec. 17(1) purposes, thus also valuing objectives of speedy trial. Practically this means that if parties agree to institutional rules (here, SIAC-India Rules), interim injunction granted by an EA can be enforced under Indian Law. At the same time, the ruling underscores the exclusivity of the Act’s appeal provisions: enforcement of such interim awards will follow the Act’s mechanism (and ordinarily be challenged only be setting aside in the tribunal, not by an appeal under Sec. 37).

We can observe how court’s analysis aligns both Sec. 17 and Sec. 9 parallel to one another, reflecting a modern arbitration regime. It also implicitly invites legislative action: the judges noted that parliament’s omission to include EA in Section 2(1)(d) and Section 17 was not for want of thought, hinting that an express amendment could provide certainty. For now, however, the ruling applies a purposive interpretation: the lack of explicit statutory mention does not bar enforcement if context (and party intent) clearly demands it. 

Academically, this judgment reaffirms that part I is a complete code, and parties cannot resort to courts for matters covered by arbitration, even if the relief originates in an emergency arbitration award. It also illustrated the interplay between institutional rules and domestic law – a theme of growing importance. The judgment’s ratio and emphasis on Sec. 2(1)(d), 17(1),17(2) will likely guide practitioners in drafting arbitration clauses and understanding the scope of interim remedies. In sum, Amazon v. Future firmly upholds emergency arbitration as an efficacious reemdy, subject to the Act’s self-imposed limitations on appeals.