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JC - Legal Updates - (Amended) Emergency arbitral awards considered orders under Section 17(1), enforceable under Section 17(2) of Arbitration Act

Legal Updates

10 Aug 2021

(Amended) Emergency arbitral awards considered orders under Section 17(1), enforceable under Section 17(2) of Arbitration Act

Emergency arbitral awards are orders under Section 17(1) of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) which can be enforced under Section 17(2) of the Arbitration Act.

This was held by the Supreme Court (“Court”) in its judgment dated 6th August 2021 in matter of Amazon.com NV Investment Holdings LLC v. Future Retail Ltd. & Ors.

The Court in the matter observed that full party autonomy given by the Arbitration Act to have a dispute decided in accordance with institutional rules includes interim orders/awards delivered by Emergency Arbitrators. The Court equated that such awards are orders made under Section 17(1) of the Arbitration Act and the same are enforceable under Section 17(2) of the Arbitration Act. The Court noted that such orders are an important step in aid of decongesting civil courts and affording speedy interim relief to the parties.

With respect to appealability of orders passed under Section 17(2) for enforcement of emergency arbitral awards made under Section 17(1), the Court observed that under Section 17(2), the court acts in the same manner as it acts to enforce a court order made under Section 9(1) of the Arbitration Act. As such, the Court noted that Section 17(2) only creates a legal fiction only for the limited purpose of enforceability of interim orders made by the arbitral tribunal. To extend this fiction to include appeals from such orders would be a leap beyond clear intent of the legislature and unsustainable. The Court further observed that Section 37 of the Arbitration Act only provides for appeals from an order granting or refusing to grant any interim measures under Section 17 and does not encompass orders passed under Section 17(2) of the Arbitration Act in enforcement of an emergency arbitral award.

In view of the above observations, the Court held that emergency arbitral awards are orders under Section 17(1) which can be enforced under Section 17(2) of the Arbitration Act. The Court also held that no appeal lies under Section 37 of the Arbitration Act against an order passed under Section 17(2) of the Arbitration Act for enforcement of an emergency arbitral award by a learned Single Judge of the High Court.

https://main.sci.gov.in/supremecourt/2021/3947/3947_2021_32_1501_29084_Judgement_06-Aug-2021.pdf

For any further information, please contact Mr. Shubhabrata Chakraborti (shubhabrata.chakraborti@jclex.com) or Mr. Dhruv Malik (dhruv.malik@jclex.com).