Initial concepts and definition - definitions that we studied like award , seat, competenze

compentenz
Arbitration agreement
Arbitrability
reference to arbitrate Section 8
interim relief
Emergency arbitration
anti-suit injunction
Anti arbitration injunction
appointment of arbitration
challenge to arbitrator

Lets start with arbitration agreement :

Lets start with arbitration agreement :

7. Arbitration agreement.—(1) In this Part, “arbitration agreement”

means an agreement by the parties to submit to arbitration all or
certain disputes which have arisen or which may arise between them in
respect of a defined legal relationship, whether contractual or not.
(2) An arbitration agreement may be in the form of an arbitration
clause in a contract or in the form of a separate agreement.
(3) An arbitration agreement shall be in writing.
(4) An arbitration agreement is in writing if it is contained in—
(a) a document signed by the parties;
(b) an exchange of letters, telex, telegrams or other means of
telecommunication 10[including communication through
electronic means] which provide a record of the agreement; or
(c) an exchange of statements of claim and defence in which the
existence of the agreement is alleged by one party and not
denied by the other.
(5) The reference in a contract to a document containing an
arbitration clause constitutes an arbitration agreement if the contract is
in writing and the reference is such as to make that arbitration clause
part of the contract.

Arbitration agreement need not to be signed by the parties.

When letter or Telegrams are exchanged between parties - it is the intention of the parties to
arbitrate is required and words like ‘arbitration’, ‘Arbitration’, ‘arbitration agreement’ are
not conclusive. See effect of the language.

Even after performance of contract is come to end- Arbitration agreement would survive for
the purpose of resolution of dispute arising in connection with contract .

Ingredients of arbitration agreement

1. It's agreement between parties to submit dispute to arbitration that have arise and may
arise in respect of define legal relationship.
2. Not necessary that the relationship is contractual or not.
3. Need not to be part of contract may form separate agreement.
4. Parties may refer their dispute to arbitration - not arbitration agreement.
5. The agreement shall be in writing
6. If one party has signed the arbitration agreement, and other party has knowledge about
it, it would be deemed to have given their consent and will be bound by the arbitration
agreement .
7. But the contract between parties must be signed by both.
8. Letters, telex, Telegrams or other means of Telecommunication which provide a record
of agreement - the word “exchange” signifies that , Merely sending later will not
constitute agreement it has to be exchange and assent.
9. Averment is made by one party in statement of claim, And not denied by other party in
statement of defence. - The intention to refer disputes to arbitration can be ascertain
from the failure of the other party to deny the existence of arbitration agreement.
10. Authorized person - Agreement entered into , By parties representative will be binding
if proper authorisation is in place in favor of the represented , Agreement signed by
employees without authorisation will not buying the company .
11. When parties make a new contract over the older, if there are only minor changes in
the old contract, then even if the new contract does not contain arbitration agreement,
the old arbitration agreement shall be applicable. - but if there are substantial changes
made in the contract, then the older agreement will be ineffective.
12. Complete superseding of first agreement containing arbitration clause with second
agreement without Arbitration clause will make the arbitration clause contained in first
agreement ineffective and inoperative.
13. Standard form of contract- one party makes the contract and other party other take it
or leave it.
14. Arbitration clause printed in the standard form or invoice which specifies with clarity
that the intention to refer dispute to arbitration would be binding on party.
15. Arbitration agreement contained in inadmisable document. If the, document in which
there is arbitration agreement and document is insufficiently stamp then court will not
act upon it .

16. On December 13, 2023 a seven judge bench of the Supreme Court in In Re:
Interplay between Arbitration Agreements under the Arbitration And Conciliation
Act, 1996 and the Indian Stamp Act, 1899[1], unanimously ruled on the issue
surrounding the admissibility of unstamped or insufficiently stamped instrument in
evidence, which arose in the context of three statues - the Arbitration and
Conciliation Act 1996 (“Arbitration Act”), the Indian Stamp Act 1899 (“Stamp
Act”), and the Indian Contract Act 1872 (“Contract Act”). The Court held that an
instrument which is unstamped or insufficiently stamped would be inadmissible
in evidence, however the same is a curable defect and that in itself does not
make the agreement void or unenforceable. In doing so, the Apex Court has
overruled the judgment passed by five judge bench of the Court in NN Global
Mercantile Private Limited v. Indo Unique Flame Limited [2], (“NN Global 2”) and
has settled the issue by holding that Courts need not consider the objection as to
under-stamping or non-stamping of underlying contract at the time of deciding
applications under Section 8 and 11 of the Arbitration Act, and deciphering whether
arbitration agreement exists in the underlying instrument.

- Inadmissibility and voidness: A difference was carved out between the validity and
enforceability of an instrument in law and its enforceability in evidence. The Court noted
that when an instrument is inadmissible, then the Court may or may not consider or rely
upon it while adjudicating, however a void instrument renders it unenforceable in a court
of law. Therefore, the Court held that paying inadequate duty or not paying it, would only
render an instrument inadmissible in evidence and not void, and the same is a curable
defect.
-
-
17.Interpretation of arbitration clause
- The construction of arbitration clause should start with presumption that a parties
as a rational Businessman are likely to have intended any dispute arising out of
relationship, to be decided by the same Tribunal.
 - Unless language makes it clear that certain questions are intended to be excluded
from the arbitrations jurisdiction.
18.If two plausible interpretations are possible, then Court must select one that will
produce reasonable and just result, that is refer the part is to arbitration.
19.The Group of Companies Doctrine (GOCD) is a legal principle that states that an
arbitration agreement signed by a company in a group of companies can also bind
non-signatory companies in that group. The doctrine is based on the idea that the
parties involved intended to bind both signatories and non-signatories to the
agreement.
20.Non signatory parties can be subjected to arbitration provided the transactions are
with a group of companies and there is a clear intention of the parties to find both
the signitary as we as the non signatory parties.

Arbitrability

Introduction
Arbitrability plays a pivotal role in dispute resolution, determining if a particular dispute can be
resolved through arbitration. Several key factors, including, among other things, procedural/curial laws,
governing law and actual text of the arbitral agreements, identity of the parties, etc., help establish
arbitrability.[1]

The creation of a contract,[2] party autonomy, and consensus ad idem form the cornerstones of the
private resolution method,[3] which make for an efficient alternative to traditional litigation. Over the
years, courts have developed frameworks and tests to ascertain the extent of arbitrability, often
drawing from landmark cases. However, the legal landscape regarding the scope of arbitrability has
been silent in international[4] and Indian texts.[5] The absence of statutory rules has led to judicial
interpretation playing a crucial factor in assessing the meaning of arbitrability. This article aims to
delve into the broad intricacies of arbitrability, focusing particularly on the evolution of the Booz Allen
test, the judicial interpretations that followed, and which ultimately led to the development of the
expansive fourfold test in the Vidya Drolia case, which has sought to settle the legal debate on the
arbitrability of disputes.

The Booz Allen Test: A Foundational Framework

The Booz Allen test, derived from the seminal Supreme Court decision in Booz Allen & Hamilton Inc. v.
SBI Home Finance Ltd. & Ors.,[6] established the criteria for assessing the arbitrability of disputes. The
issue was whether arbitration could settle a suit of enforcement of a charge/mortgage. The Apex Court
answered in the negative and recognised three conditions that had to be satisfied for a subject matter
to be referred to arbitration[7]:

● The disputes must be capable of adjudication and settlement by arbitration;

● The disputes must be covered by the arbitration agreement; and
● The parties must have referred the disputes to arbitration.

The Court, among other things, also lay down six categories of disputes as incapable of being settled
by arbitration[8]:

● Disputes relating to rights and liabilities which give rise to or arise out of criminal
offences;
● Matrimonial disputes relating to divorce, judicial separation, restitution of conjugal
rights, child custody;
● Guardianship matters;
● Insolvency and winding up matters;
● Testamentary matters; and
● Eviction or tenancy matters governed by special statutes where the tenant enjoys
statutory protection against eviction.

The nature of rights involved is the basis for determining arbitrability. Rights in personam (rights and
interests of specific persons) as prevalent in contracts are amenable to arbitration, whereas rights in
rem (rights and interests exercisable against the world) require judicial intervention. The Court also
held that subordinate rights in personam arising from rights in rem may be referred to arbitration. This
test emphasised that certain categories of disputes are non-arbitrable due to the nature of implications
resulting from the rights.

Since 2011, the Booz Allen test has formed the guiding principle for determining the arbitrability of
disputes in India, setting a benchmark for subsequent deliberations on arbitrability and holding the field
of law on arbitrability until the Vidya Drolia decision.

Aftermath of Booz Allen: Subsequent Refinements and Variations

Following the Booz Allen test, Indian courts have faced nuanced scenarios that require further
delineation of arbitrable disputes, with the scope of disputes involving fraud, taxation, insolvency,
etc., being open to debate. By expanding upon the Booz Allen test, the Supreme Court has contributed
to the evolving jurisprudence on arbitrability and shaped the contours of permissible arbitration.

In Shri Vimal Kishor Shah v. Jayesh Dinesh Shah & Others,[9]the Supreme Court examined the Indian
Trusts Act, 1882, and held that disputes arising out of trust deeds form part of the civil court’s
jurisdiction. The Indian Trusts Act, 1882, is a complete code, has a comprehensive machinery to deal
with all issues relating to a Trust, and provides for the specific remedy of adjudication of disputes by a
Civil Court, barring any dispute resolution through arbitration. This ensured culling out a seventh
exception to arbitrability.

Further, in Ayyasamy v. A. Paramasivam and Others,[10]the Supreme Court held that conferring
exclusive jurisdiction to a specified court or tribunal as a matter of public policy, implicitly bars the
remedy by arbitration. The Court also examined the arbitrability of disputes involving fraud, holding
that while allegations of fraud not affecting the public domain shall be amenable to arbitration, the
courts will adjudicate serious instances of fraud because these demand extensive evidence.

The Supreme Court has provided a standard test for determining arbitrability in Booz Allen and
subsequent judicial pronouncements. However, lower courts have differed on their interpretation of
arbitrability. Following are some instances:

● In Rakesh Kumar Malhotra v Rajinder Kumar Malhotra,[11] the Bombay High Court
excluded arbitrability for a disputeof oppression and mismanagement (shareholders’
claims against the company) under the Companies Act of India, 1956, recording that
 despite shareholders’ interest being aggrieved, parts of the relief may be in rem and,
therefore, outside the purview of the arbitrator.
● In Eros International Media Ltd. v. Telemax Links India (P) Ltd.,[12] the Bombay High
Court held that contractual rights related to copyrights are amenable to arbitration as the
remedy is a right in personam, whereas the claim for copyright is a right in rem.

In the aforestated set of cases, the courts emphasised on the nature of the relief sought, as opposed to
the rights and interest of the parties, to determine the feasibility of settlement by arbitration. The
Booz Allen approach allows parties to circumvent the test by claiming for reliefs outside the purview of
the arbitration. The test falls short in instances wherein the relief may in essence be arbitrable. The
Supreme Court has stated that the facets of arbitrability expressly laid down in Booz Allen are not a
hard–and-fast rule to be blindly followed.

The Vidya Drolia Case: Redefining Arbitrability

In 2019, aiming to solve the conundrum and marking a significant milestone in Indian arbitration, the
Supreme Court’s ruling in Vidya Drolia and Ors v. Durga Trading Corporation,[1] (“Vidya Drolia”) laid
down the contours of arbitrability. While analysing thearbitrability of Landlord-Tenant disputes
governed by the Transfer of Property Act, 1882 (“TPA”), the Supreme Court elucidated that the mere
existence of a special statute dealing with certain disputes does not ipso facto render them
non-arbitrable, thereby widening the scope of arbitrability and increasing the access to arbitration in
complex legal contexts.

A fourfold test to determine non-arbitrability of disputes was laid down by the three-judge bench in
Vidya Drolia:[2]

● When cause of action and subject matter of the dispute relates to actions in rem, that
do not pertain to subordinate rights in personam that arise from rights in rem.
● When cause of action and subject matter of the dispute affects third party rights;
have erga omnes effect; require centralized adjudication, and mutual adjudication
would not be appropriate and enforceable;
● When cause of action and subject matter of the dispute relates to inalienable sovereign
and public interest functions of the State and hence mutual adjudication would be
unenforceable; and
● When the subject matter of the dispute is expressly or by necessary implication
non-arbitrable as per mandatory statute(s).

The Supreme Court stated that land tenancy matters governed by the TPA are subordinate rights in
personam arising from rights in rem, which do not have an erga omnes affect and, therefore, are
amenable to arbitration. It also stated that insolvency disputes, grant and registration of patents and
trademarks, and matters relating to probate, testamentary matter, etc., confer monopoly rights having
an erga omnes effect and are not amenable to arbitration. On the other hand, criminal offences that
are offences against the State and matrimonial disputes also fall within the ambit of sovereign functions
and are non-arbitrable.[3]

Latest Judicial Developments

By applying the aforesaid tests in Vidya Drolia, the Supreme Court went on to expressly overrule the
following judicial pronouncements with an aim to foster a conducive environment for alternative
dispute resolution:

In N. Radhakrishnan v. Maestro Engineers,[4] the Madras High Court noted that a civil court would be
the competent authority to resolve matters involving serious allegations of fraud and malpractices.
These do not warrant trial by an arbitral tribunal. The Apex Court in Vidya Drolia overruled the decision
and observed that allegations of fraud can be made a subject matter of arbitration when they relate to
a civil dispute subject to the caveat that fraud, which would vitiate and invalidate the arbitration
clause, is an aspect relating to non-arbitrability.[5]

Thereafter, in HDFC Bank Ltd. v. Satpal Singh Bakshi,[6] the Delhi High Court applying the principle in
Booz Allen,held that the matters within the scope and jurisdiction of Debt Recovery Tribunal are
arbitrable, which simply replaces a civil court. Overruling the decision, the Apex Court in Vidya Drolia
recorded that since disputes falling under the jurisdiction of the Debt Recovery Tribunal are created
under the Banks & Financial Institutions Act, 1993, these are non-arbitrable as special powers are
conferred upon the Tribunal.[7]

The Apex Court overruled the decision in Himangni Enterprises v. Kamaljeet Singh Ahluwalia[8] – that
tenancy matters governed by the TPA are non-arbitrable – and held in Vidya Drolia that tenancy disputes
under the TPA are arbitrable, unless exclusive jurisdiction vested in specific forums is applicable to
decide any special rights and obligations forming part of landlord-tenant disputes, such as those
governed by rent control legislations, which are non-arbitrable.[9]

Furthermore, the Court placed reliance on Vidya Drolia in the case of Suresh Shah v. Hipad Technology
India Private Limited,[10] where the courts reiterated that special statutes that grant special
protection against eviction to tenants in land tenancy matters bars the remedy of arbitration, giving
exclusive jurisdiction to the forum specified under the statute.

Recently, in N.N. Global Mercantile Private Limited v. Indo Unique Flame Limited and Ors.,[11] the
Supreme Court discussed the issue of arbitrability of a fraudulent invocation of a bank guarantee
furnished under a substantive contract and citing Vidya Drolia. It held that an arbitral tribunal could
adjudicate the civil aspect of fraud, coercion, undue influence, or misrepresentation in civil or
commercial disputes, unless expressly barred.
Existence of a valid Arbitration Agreement

The existence of a valid arbitration agreement is the most essential pre-requisite for referring a
matter to resolution by way of arbitration. Under Section 7 of the Arbitration and Conciliation Act
1996 (“The 1996 Act”), an arbitration agreement means a written agreement (which may be in the form
of an arbitration clause) by the parties to submit to arbitration all or certain disputes that have arisen
or may arise between them in respect of a defined legal relationship, whether or not contractual.[12]
As stated in Vidya Drolia, an arbitration agreement exists only when it is legally valid, satisfying
statutory requirements of both the 1996 Act and the Indian Contract Act, 1872.[13]

The question of “who decides arbitrability – court or arbitral tribunal?” is as crucial as defining
what constitutes arbitrability and has been addressed extensively in Indian jurisprudence. Following
the introduction of Section 11(6A) of the 1996 Act in 2015, the powers of the court have been
confined to the examination of the existence of an arbitration agreement.[14] Prior to the 2015
amendment, the scope of powers of the court was considerably wider. The intention behind Section
11(6A) was to confine court powers to one aspect of arbitrability only, i.e., the existence of a valid
arbitration agreement – nothing more, nothing less, thereby minimising judicial intervention.[15]

However, although a 2019 amendment resulted in the omission of Subsection (6A) of Section 11 of
the 1996 Act,[16] this has not yet been notified in the 1996 Act.

In Vidya Drolia, the court held that despite the deletion, Section 11(6A) of the 1996 Act continues to
guide a court’s jurisdiction at the referral stage. The court’s role is limited to examining an
arbitration agreement when it is manifestly and ex facie certain that the arbitration agreement
was non-existent or invalid, reinforcing the principle of competence-competence.[17] Subsequently,
when the courts expanded on the view taken in Vidya Drolia in DLF Home Developers Ltd. v. Rajapura
Homes Pvt. Ltd.[18], the Apex Court warned that courts should not act mechanically and must apply
their mind within the framework of Section 11(6A) – the intention being not to usurp the arbitral
tribunal’s jurisdiction but to streamline the process of arbitration. In 2023, NTPC Ltd. v. SPML Infra
Ltd.[19] dealt with the eye-of-the-needle test, meaning the court’s jurisdiction under Section 11(6A),
1996, Act is narrow. Thereafter, the Court observed that as a general rule and a principle, the Arbitral
Tribunal is the preferred first authority to determine and decide all questions of non-arbitrability. As
an exception to the rule, and rarely as a demurrer, the Referral Court may reject claims which are
manifestly and ex facie non-arbitrable,[20] following from the decision in Vidya Drolia.

Thereafter, in Indian Oil Corpn. Ltd. v. NCC Ltd.,[21] the Supreme Court expressed that Section 11(6A)
of the 1996 Act does not prohibit the court from ascertaining the arbitrability of disputes. The court
submitted at Paragraph 93 of(2023) 2 SCC 539:

“We are of the opinion that though the Arbitral Tribunal may have jurisdiction and authority to decide
the disputes including the question of jurisdiction and non-arbitrability, the same can also be
considered by the Court at the stage of deciding Section 11 application if the facts are very clear and
glaring and in view of the specific clauses in the agreement binding between the parties, whether the
dispute is non-arbitrable and/or it falls within the excepted clause….”

Recently, in In re Interplay between Arbitration Agreements under the Arbitration & Conciliation Act,
1996 & the Indian Stamp Act, 1899, the Supreme Court tackled the question on arbitrability and
clarified the position of law. The Apex Court held that since Section 11(6a) continues to remain in force,
it must give true effect to the legislative intent. The extent of courts powers should be restricted to a
prima facie determination of the existence of an arbitration agreement based on Section 7 of the 1996
Act, the same being non-binding, allowing the arbitral tribunal to examine the issue in depth.[22] This
interpretation also gives true effect to the doctrine of competence-competence by leaving the issue of
substantive existence and validity of an arbitration agreement to be decided by an arbitral tribunal
under Section 16 of the 1996 Act.[23]

Conclusion

In conclusion, at this stage, it is safe to say that the Vidya Drolia case has sought to put an end to the
conundrum surrounding the aspect of arbitrability. The fourfold test presents and promotes arbitration
as a resilient mechanism for expeditious and effective dispute resolution, guided by fundamental
principles of party autonomy, fairness, and enforceability. Unless a dispute necessitates judicial
intervention for adjudication, it shall be amenable to resolution through arbitration and shall be
decided on the facts and circumstances of each case. The decision in In re Interplay between
Arbitration Agreements under the Arbitration & Conciliation Act, 1996 & the Indian Stamp Act,
1899,aims to resolve the tussle between who determines arbitrability by extending autonomy to arbitral
tribunals, reducing judicial intervention, and re-emphasising on the principle of
competence-competence. While there is an expanding body of jurisprudence concerning arbitrability,
courts continue to adhere to a principles-based approach. The evolution of law in this area remains a
topic of interest for future developments.

Notes
F. Who decides non-arbitrability?

As per the Supreme Court, the issue of arbitrability of disputes can be raised at three stages.40
Firstly, before the court on an application for reference under Section 11 or stay of pending
judicial proceedings and reference under Section 8 of the Arbitration Act. Secondly, before the
Arbitral Tribunal during the course of the arbitration proceedings. Thirdly, before the court at
the stage of the challenge to the award or its enforcement.

(i) Before the referral court under Section 8 or Section 11 of the Arbitration Act
The Supreme Court clarified that the scope of judicial review and jurisdiction of courts acting
under Sections 8 and 11 of the Arbitration Act is identical and extremely limited and restricted.
The courts at the referral stage ought to undertake a prima facie examination on the existence
of a valid arbitration agreement. A prima facie review does not entail a full review or mean
that a case is proved to the end. It refers to a first review made by the referral court to weed out
manifestly and ex facie non-existent and invalid arbitration agreements and non-arbitrable
disputes. The prima facie review is intended to cut the deadwood and trim off the side
branches in straightforward cases where the dismissal is barefaced and pellucid.41 The object
of exercising the limited jurisdiction under Section 8 or Section 11 of the Arbitration Act, as
the case may be, is to protect the parties from being forced to arbitrate when a matter is
demonstrably non-arbitrable. Thus, as held by the Supreme Court in a recent case42, the
referral courts are not expected to act mechanically merely to deliver a purported dispute
raised by an applicant at the doors of an arbitrator.

(ii) Before the Arbitral Tribunal

Clauses (a) and (b) to sub-section (1) of Section 16 of the Arbitration Act enact the principle of
separation of arbitration agreement from the underlying or container contract. Section 16(1)(a),
by legal fiction, gives an independent status to an arbitration clause as if it were a standalone
agreement, even when it is only a clause and the integral part of the underlying contract.
Section 16(1)(b) formulates a legal rule that a decision by the Arbitral Tribunal holding that
the main contract is null, and void shall not ipso jure entail invalidity of the arbitration clause.
Thus, a successful challenge to the existence, invalidity, or recission of the main contract does
not necessarily embrace an identical finding as to the arbitration agreement. As regards the
principle of competence-competence43, it declares the Arbitral Tribunal as being competent
and authorised in law to rule on issues pertaining to its own jurisdiction and further decide on
matters of non-arbitrability. Section 16(1) of the Arbitration Act accepts and empowers the
Arbitral Tribunal to rule on its own jurisdiction including any objections with respect to all
aspects of non-arbitrability including validity of the arbitration agreement. The general rule, in
view of the principle of severability and competence-competence, is that the Arbitral Tribunal
is the preferred first authority to determine and decide all questions of non-arbitrability.

(iii) At the stage of challenging the award and execution/enforcement of award

The issue of non-arbitrability can be raised at the stage of challenging the award and the
execution/enforcement of the award as well. For instance, it is a well-settled norm that
unilateral appointment of sole arbitrators is void ab initio and anything and everything that
falls from such an appointment is also non est.44 An arbitral agreement providing for
unilateral appointment of arbitrators is illegal and unenforceable in law. Such a plea can be
taken before the court in proceedings challenging the award or even at the stage of
enforcement of the arbitral award emerging out of the unilateral appointment of the sole
arbitrator.45 Another instance where the plea of non-arbitrability and invalidity of the
underlying arbitration clause may be raised at the stage of challenging the award or
enforcement of the award includes an arbitral award that may be rendered out of proceedings
conducted based on an insufficiently stamped or unstamped arbitration agreement. Notably,
the Supreme Court in a recent decision has clarified that in case an arbitration agreement is
insufficiently stamped or unstamped, the parties cannot act upon the same and the arbitration
agreement would be unenforceable in law.46

G. Conclusion

In conclusion, the concept of arbitrability in Indian arbitral jurisprudence has witnessed

significant development and reinforcement through the judicial precedents rendered from time
to time. The four-fold test in Vidya Drolia47 provides a crucial guiding framework for
determining the arbitrability of different types of disputes. However, as rightly pointed out in
Vidya Drolia48 the four-fold test cannot act as watertight compartments and would not only
dovetail and overlap but also evolve over time. There is no clear-cut dichotomy between the
expressions “rights in rem” and ”rights in personam” insofar as arbitrability is concerned.
Matters involving rights in personam could also relate to rights in rem. It is expected that the
lawmakers and the courts, in the coming years, will continue to contribute to the development
of jurisprudence on arbitrability and delve deeper into the interplay of rights in rem and rights
in personam. ...

4. Waiver of right to object.

- A party who knows that
(a)
any provision of this Part from which the parties may derogate, or
(b)
any requirement under the arbitration agreement,
has not been complied with and yet proceeds with the arbitration without stating his objection
to such non-compliance without undue delay or, if a time limit is provided for stating that
objection, within that period of time, shall be deemed to have waived his right to so object.
The concept of waiver of the right to object means that if a party is aware of a
non-compliance with any provision of the arbitration law (from which parties can agree to
deviate) or a breach of the arbitration agreement, they must raise an objection without
unreasonable delay. If the party continues with the arbitration process without raising this
objection promptly, or within the time limit specified for making such an objection, they will
lose the right to object later.

Key elements:

1. Knowledge of Non-Compliance: The party must know that a rule or requirement

under the arbitration agreement or law has not been followed.
2. Failure to Object: If the party does not object to the non-compliance without undue
delay, or within the specified time, they are considered to have waived the right to raise
that issue later.
3. Effect of Waiver: The party cannot later challenge the arbitration process or award
based on that non-compliance, as they are deemed to have accepted the defect by not
raising it earlier.

In simple terms, you can’t stay silent about a problem during arbitration and then
complain about it later.

Requirements of Section 4
1. Non compliance of provision of statute from which party may derogate
2. Knowledge of such non compliance by opposite party
3. Participation in the arbitration proceedings by party who has knowledge without stating
his objection
4. When time limit has been provided to state the objection but the objection is not raised .

Waiver of right under Section 8

1. Particified the suit which was covered under arbitration agreement.
2. No application for referring the dispute to arbitral Tribunal has been filed by parties .
3. Application is not filed before submitting first statement on the dispute .
4. By filing such statement or application or affidavit, defendant shows his intention to
submit himself to the jurisdiction of court.

10. Number of arbitrators.—(1) The parties are free to determine the

number of arbitrators, provided that such number shall not be an even
number.
(2) Failing the determination referred to in sub-section (1), the
arbitral tribunal shall consist of a sole arbitrator.
Waiver of right to object to the composition of arbitral Tribunal
1. Party Deemed to waived his right to object any non compliance- provided it is not
mandatory in nature.
2. section 10 of the act provides their should not be even number of arbitrators.
3. objection to the composition of arbitral Tribunal can be waved if party choses not to
object to the composition within stipulated time.
4. If the parties have not objected to the composition of the Tribunal even with even
number of arbitrators, they would be Deemed to have agreed to the composition and
award cannot be challenged on that ground .

Waiver of inherent lack of jurisdiction

Inherent lack of Jurisdiction meaning the decision shall be nullity.
The decision can be challenged at a letter stage even in Collateral proceeding.
The defect cannot be cured even by waver of the party entitled to raise objection.

8. Power to refer parties to arbitration where there is an arbitration

Agreement.—

[(1) A judicial authority, before which an action is

brought in a matter which is the subject of an arbitration agreement
shall, if a party to the arbitration agreement or any person claiming
through or under him, so applies not later than the date of submitting
his first statement on the substance of the dispute, then,
notwithstanding any judgment, decree or order of the Supreme Court
or any court, refer the parties to arbitration unless it finds that prima
facie no valid arbitration agreement exists.]

(2) The application referred to in sub-section (1) shall not be

entertained unless it is accompanied by the original arbitration
agreement or a duly certified copy thereof.
12[Provided that where the original arbitration agreement or a
certified copy thereof is not available with the party applying for
reference to arbitration under sub-section (1), and the said agreement
or certified copy is retained by the other party to that agreement, then,
the party so applying shall file such application along with a copy of the
arbitration agreement and a petition praying the court to call upon the
other party to produce the original arbitration agreement or its duly
certified copy before that court.]

(3) Notwithstanding that an application has been made under subsection

(1) and that the issue is pending before the judicial authority,
an arbitration may be commenced or continued and an arbitral award
made.
Party is not completely prohibited from proceeding with the suit. If party files the suit and
application is not file under Section 8, The court shall proceed with the suit.
- Third party cannot file application under Section 8

Matter
- Matter falls within the scope of arbitration agreement - Is matter fall partly within
scope of arbitration agreement and partly outside, then reference under section 8 can
not be made

Shall -
- Obligatory for the court to refer the parties to arbitration
- Civil Court cannot conduct an enquiry with regard to an applicability of the arbitration
close to the fact of the case

Section 8 of the act shall not apply to the suit dealing with matter falling outside the
Arbitration agreement or between the parties who are not party to arbitration agreement.

The judicial authority is not empowered under Section 8 to go into the merits of the case.

Foreign seated arbitration

The case for Section 8 becomes strong when the parties Agree to foreign seated arbitration.
Because they not only agreed on arbitration but they went to the extent of choosing foreign
seat.

First statement

First statement included returns statement in suit or a reply to application in other proceeding.

Court Drama
It is primer PC discussion of the court on the valid albertson agreement exist or not.
Court cannot decide issues as to whether agreement is null or avoid, Inoperative or incapable
of being performed or not?

Summary of Section 89: Settlement of Disputes Outside the Court

1. Court’s Role in Settlement: If the court believes a settlement is possible, it will draft
settlement terms and seek the parties' opinions. Based on their feedback, the court may
modify the terms and refer the case to:
○ Arbitration,
○ Conciliation,
○ Judicial settlement (including Lok Adalat), or
○ Mediation.
2. Procedures for Referred Disputes:
○ Arbitration/Conciliation: The Arbitration and Conciliation Act, 1996 applies.
○ Lok Adalat: The Legal Services Authority Act, 1987 provisions apply.
○ Judicial Settlement: Referred to an institution/person, treated as Lok Adalat,
governed by the Legal Services Authority Act, 1987.
○ Mediation: The court facilitates a compromise following the prescribed
procedure.
Section 9. Interim measures, etc., by Court.

1[(1)]A party may, before or during arbitral proceedings or at any time

after the making of the arbitral award but before it is enforced in
accordance with section 36, apply to a court—

(i) for the appointment of a guardian for a minor or person of unsound mind
for the purposes of arbitral proceedings; or

(ii) for an interim measure of protection in respect of any of the following

matters, namely:—

(a) the preservation, interim custody or sale of any goods which are the
subject-matter of the arbitration agreement;

(b) securing the amount in dispute in the arbitration;

(c) the detention, preservation or inspection of any property or thing which

is the subject-matter of the dispute in arbitration, or as to which any question
may arise therein and authorising for any of the aforesaid purposes any
person to enter upon any land or building in the possession of any party, or
authorising any samples to be taken or any observation to be made, or
experiment to be tried, which may be necessary or expedient for the purpose
of obtaining full information or evidence;

(d) interim injunction or the appointment of a receiver;

(e) such other interim measure of protection as may appear to the Court to
be just and convenient,

and the Court shall have the same power for making orders as it has for the
purpose of, and in relation to, any proceedings before it.
2[(2)Where, before the commencement of the arbitral proceedings, a Court
passes an order for any interim measure of protection under sub-section (1),
the arbitral proceedings shall be commenced within a period of ninety days
from the date of such order or within such further time as the Court may
determine.

(3) Once the arbitral tribunal has been constituted, the Court shall not
entertain an application under sub-section (1), unless the Court finds that
circumstances exist which may not render the remedy provided under
section 17 efficacious.]

The issues which are to be decided in substantive arbitration proceedings cannot be gone
into the petition under section 9 of the act.

Purpose : Purpose of section 9 is to grant enter in major sore to protect the subject matter of
arbitral procedures

Interim order must not finally and conclusively decide the issue and is marely temporary
arrangement to prevent the status co till matter is finally decided

Amarjeet Singh versus Devi Ratan, SC 2010 : court held that Power under section 9 is wide
in scope . It would extend to third party in whome the properties or goods are vested even
if they are not party to arbitration.

The grant of injection is a discretionary relief.

Court is required to satisfy itself that

1. there is a prima facie case in favor of the party asking for injunction and

2. irreparable injury or damage would be caused if in junction is not granted and

3. balance of convenience lies in favor of the appellant

Section 9 of the act applies to International commercial arbitration even if the place of the
arbitration is outside India
The code shall not appoint receiver unless the party through that he has primacy good chance
of succeeding in the proceeding.

Petition under section 9 must be file before Court defined under section 2 (1) (e) . The court
must have territorial jurisdiction with regard to subject matter of arbitration proceeding , just
like it would have been the suit procedure .

Anti-arbitration injunction suit

These suits are filed to restrain a person from initiating/continuing arbitral proceedings and
typically hit at the arbitral tribunal’s jurisdiction to consider the dispute. The objections raised in
such suits include (a) absence of a valid arbitration agreement (b) agreement being
inoperative/incapable of being performed1; (c) arbitrability of the subject matter of the dispute;
(d) foreign arbitration proceeding being oppressive/vexatious/unconscionable2; and (e) issue in
dispute being hit by principles of res judicata3; and (e) non-enforceability of the arbitral award.

When faced with such suits, a Court is tasked with the crucial responsibility of determining whether
to interfere or refer parties to the agreed adjudicatory forum.

Is there a statutory bar against such suits in India seated arbitrations?

Section 5 of the Act begins with a non-obstante clause (an addition by the Indian Parliament to
Article 5 of the Model Law) and contains an express warning that “matters governed by this Part,
no judicial authority shall intervene except where so provided in this Part“. Thus, unless provided
(and to the extent provided for in Part 1), Section 5 bars any form of Court interference in
arbitrations.
Section 5 is the beacon embodying the Act’s primary objective of minimizing Court supervision in
arbitrations. Given its strict construct, it may be argued that it does not leave any room for grant
of an anti-arbitration injunction. Part I admittedly does not contemplate any such leeway. On the
contrary, under Section 16, it empowers the arbitral tribunals alone to tackle concerns which may
go to the root of their jurisdiction.

Indian Courts have time and again respected this fence drawn by the Act, clarifying that civil
Courts do not have the power to consider questions relating to an arbitrator’s jurisdiction4 and
warning Courts against bypassing the Act5. To this end, the Indian Courts have adopted the
mantra of ‘when in doubt, do refer‘6.

Recently, the Supreme Court7 once again emphasised on this aspect while throwing light on the
positive and negative facets of Section 5. The Court observed that the positive facet vests judicial
authorities with jurisdiction over arbitral proceedings in matters expressly allowed in/ dealt with
under Part I of the Act. The flip side to this approach (which is the negative facet) is that judicial
authorities are prohibited from intervening in arbitral proceedings in situations where the tribunal
has been bestowed with exclusive jurisdiction. The Court made these observations while
acknowledging that the basis of arbitral autonomy is to give effect to the parties’ true intention
distancing themselves from the ‘risk of domestic judicial parochialism‘.

While Section 5 contains the statutory bar against Court intervention, Order 7 Rule 11 of the Code
of Civil Procedure, 1908, gives teeth to this statutory bar. It calls for the rejection of a plaint inter
alia in cases where the “suit appears from the statement in the plaint to be barred by any law“.
Thus, one may argue that a suit seeking such an injunction barred by Section 5 would be hit by
Order 7 Rule 11.8

An Anti-Arbitration Injunction (“AAI”) is an injunction granted by courts to restrain parties or

an arbitral tribunal from either commencing or continuing with arbitration proceedings.[1] An
AAI is generally sought before an arbitration commences or in the course of the arbitration
hearing or after the conclusion of substantive hearing but before the rendering of final award.
Critics of AAI argue that this remedy strips the arbitral tribunal of its power to determine its
own jurisdiction (the kompetenz-kompetenz principle, elaborated below), increases judicial
intervention, and can be used by unscrupulous parties to evade or delay the agreed arbitration
mechanism.. On the other hand, the proponents of AAI argue it is a well-recognised legal
concept, which streamlines the remedy of arbitration itself, weeding out those cases where the
arbitration agreement may be vitiated by fraud, where there is no valid arbitration agreement
or where to proceed with arbitration could be considered vexatious, oppressive or
unconscionable. This effectively assists in saving costs and time by deciding such issues at an
earlier stage than at the stage of setting aside or enforcement of awards. There appears to be
merit on both sides of the debate.

Statutory Framework – Does Arbitration Act allow AAIs?

AAIs are increasingly becoming a powerful tool in the hands of parties to an arbitration.
However, both the UNCITRAL Model Law 1985 and the New York Convention on the
Recognition and Enforcement of Foreign Arbitral Awards, 1958 which forms the basis for the
Arbitration and Conciliation Act, 1996 (the “Act”), do not provide for an express provision
authorising the grant of AAIs by courts. Neither does the Act explicitly prohibit it.

Opponents of AAI argue that courts have a mandatory obligation to refer the parties to
arbitration without first hearing any challenges on the jurisdiction of an arbitral tribunal. For
this, they place reliance on the express provisions contained in Section 16 read with Section 5
of the Act. Section 16 enshrines the principle of Kompetenz-Kompetenz in our national laws,
thereby establishing the ability of the arbitral tribunal to rule on its own jurisdiction, including
any objections with respect to the existence and validity of the agreement[2]. Further, the
non-obstante clause in Section 5 provides that ‘notwithstanding anything contained in any
other law for time being in force’, no judicial authority should intervene except when so
provided under the Act .

However, such critics fail to acknowledge that a reference to arbitration may not be absolute.
In substantive proceedings before a civil court, Section 8 of the Act empowers courts to “refer
the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists.”
Similarly, with regard to foreign-seated arbitrations, Section 45 of the Arbitration Act
empowers courts to make a reference to arbitration unless it finds “that the said agreement is
null and void, inoperative or incapable of being performed.” Further, Section 45 is also a non
obstante clause and hence, it is not limited by Section 5 or the principle of
Kompetenz-Kompetenz as enshrined in Section 16. It may, however, be noted that a court’s
review under these provisions can only be carried out in substantive proceedings before a civil
court.

Both these provisions make it clear that the statutory scheme of the Act allows for grant of
AAIs by courts, albeit on a few limited grounds, such as, prima facie there being no valid
arbitration agreement or such agreement being null and void, inoperative or incapable of being
performed, or if the courts deems it as just and convenient.

On the arbitrability of disputes, the law laid down by the Hon’ble Supreme Court in N.
Radhakrishnan v. Maestro Engineers and Ors.[3], A. Ayyaswamy v. A. Paramasivam[4] and
Avitel Post Studioz Limited and Ors. vs. HSBC PI Holdings (Mauritius) Limited and Ors.[5]
are relevant. These hold that courts may decline reference to arbitration if the matter involves
serious and complicated allegations of fraud requiring detailed appreciation of evidence, for
which courts guided by the exhaustive provisions of the Indian Evidence Act and the Codes of
Civil and Criminal Procedure may be more competent fora than an arbitral tribunal.

Judicial Trend – Are Civil Courts empowered to grant AAIs?

Indian Courts have had multiple occasions to deal with AAIs; unfortunately, the jurisprudence
that has evolved is far from being conclusive.

In 2001, the Hon’ble Supreme Court in the matter of Kvaerner Cementation India Limited v.
Bajranglal Agarwal[6] (“Kvaerner”) held that a civil court did not have jurisdiction to
determine any objection with respect to the existence or validity of an arbitration agreement
owing to the principle of Kompetenz-Kompetenz enshrined under Section 16 of the Act.
Regrettably, Kvaerner failed to cite any precedent or provide any elaborate reasoning for this
decision, and was reported only in the year 2012, after 11 years.

In the meantime, a seven-Judge bench of the Hon’ble Supreme Court in SBP & Co. v. Patel
Engineering Ltd.[7] (“SBP & Co.”), by a majority judgment, rejected the argument that there
is exclusive jurisdiction of the arbitral tribunal to decide the existence or validity of the
arbitration agreement. This was further strengthened by the ruling of the Hon’ble Supreme
Court in World Sport Group (Mauritius) Ltd. v. MSM Satellite[8] wherein the Hon’ble
Supreme Court affirmed the jurisdiction of civil courts to refuse arbitration if the grounds
mentioned under Section 45 of the Act are satisfied. Subsequently, division benches of the
Delhi High Court and the Calcutta High Court held that civil courts are empowered to grant
AAIs; however, such power should be exercised sparingly and with abundant caution.[9] In
fact, the Hon’ble Calcutta High Court in Balasore Alloys Limited v. Medima LLC clarified
that Kvaerner appears to have been impliedly overruled by the later larger bench in SBP & Co.

Kvaerner was brought to life after 15 years when the Hon’ble Supreme Court cited it with its
approval in A. Ayyasamy v. A. Paramsivam[10] (though not directly on this issue) and
subsequently in National Aluminium Company Limited v. Subhash Infra Engineers Private
Limited[11]. Recently, this controversy has again come into prominence due to the Hon’ble
Delhi High Court judgment in Bina Modi v. Lalit Modi and Ors[12] which held that suits to
declare the invalidity of an arbitration clause/agreement and to injunct arbitration proceedings,
whether falling in Part I or Part II, are not maintainable.

Finding the Middle Path

In light of the conflicting decisions of the Supreme Court and various High Court, it is
imperative that the courts bring clarity to the issue.

The overarching principle remains that if there is a valid arbitration agreement between the
parties, then the parties shall mandatorily be referred to the arbitration mechanism for
resolution of their dispute. The Courts recognise party autonomy. Thus, it is only where
exceptional circumstances exist, that AAIs can be granted by a court of law. The onus still
remains on the party seeking an AAI to plead and demonstrate that it has no other efficacious
or alternative remedy and that it is just and in the interests of all parties not to proceed with the
arbitration process.

If all jurisdictional issues are resolved by the supervisory court prior to the arbitration process,
there is less likelihood of the award ultimately rendered by the arbitral tribunal being
challenged successfully and the award stayed on the same jurisdictional grounds (which has
been made possible by the recent Arbitration and Conciliation (Amendment) Ordinance,
2020). This would undeniably provide greater certainty to negotiating parties that the award,
once made, would be enforceable without delay.
The Emergency Arbitrator in India – Status and

Enforceability
In Summary

This article discusses Indian law on the legal status of an emergency arbitrator and the efficacy of orders passed by the emergency
arbitrator. The article highlights recent developments in the much-publicised Amazon-Future Group dispute, where the legal status of an
emergency arbitrator is directly at issue. The article explains that there are sound legal and policy reasons for recognising emergency
arbitration in India.

Discussion Points

• Definition of an arbitral tribunal under the Indian Arbitration and Conciliation Act, 1996
• 246th Report of the Law Commission of India
• Arbitration and Conciliation Act on emergency arbitration
• Enforcement of interim measures passed by an arbitral tribunal under section 17(2) of the Indian Arbitration and Conciliation Act, 1996

Referenced in this article

• Amazon.com NV Investment Holdings LLC v Future Coupons Private Limited (2021) SCC Online Del 1279
• Future Retail Limited v Amazon.com NV Investment Holdings LLC (2020) SCC Online Del 1636
• Ashwani Minda v U-Shin Limited (2020) SCC Online Del 721
• Alka Chandewar v Shamshul Ishrar Khan (2017) 16 SCC 119
• Law Commission of India, Report No. 246, Amendment to the Arbitration and Conciliation Act, 1996

Introduction

Speed is the essence of arbitration. Parties opt for arbitration believing that it is a quicker dispute resolution mechanism. Unfortunately,
however, this is often not the case. Complex, commercial arbitrations take significant time to complete and successful parties would
then have to contend with challenges to the validity as well as enforcement of the arbitral award. Urgent interim relief becomes crucial in
such disputes. In fact, such relief may be necessary to preserve the very subject matter of the arbitration. However, with increasing
dockets of courts, obtaining urgent interim relief is easier said than done. Perhaps more importantly, parties who have consciously
chosen a neutral private dispute resolution mechanism are wary of initiating litigation before national courts, even if it is for the limited
purpose of interim relief. The concept of emergency arbitration is specifically designed to address these issues. Emergency arbitration
allows the arbitral institution to appoint an emergency arbitrator to adjudicate a dispute for granting urgent interim relief until the full
arbitral tribunal is constituted. While this concept of emergency arbitration is fast gaining prominence, the legal status of the emergency
arbitrator and the enforceability of orders passed by the emergency arbitrator has been in doubt. Although some countries, such as
Singapore, have granted statutory recognition to an emergency arbitrator, most national legislation is silent on the issue.

In India, the legal position relating to emergency arbitration is unclear, as the Indian Arbitration and Conciliation Act 1996 (the A&C Act)
does not expressly provide for emergency arbitration. This article highlights crucial developments that have taken place in India in the
past few months concerning the enforceability of orders passed by emergency arbitrators. These developments have occurred in the
much-publicised dispute between Amazon.com NV Investment Holdings LLC (Amazon) and the Future Group, an Indian conglomerate
specialising in the retail sector (the Amazon–Future dispute),[1] where Amazon was able to obtain an order from an emergency
arbitrator in an India-seated arbitration proceeding. The article considers critical questions relating to the status and enforceability of
orders passed by an emergency arbitrator.

Status of an emergency arbitrator under the A&C Act

Section 2(1)(d) of the A&C Act defines an arbitral tribunal to mean a sole arbitrator or a panel of arbitrators. Section 2(1)(d), which is
based on the UNCITRAL Model Law on International Commercial Arbitration 1985, has not been amended since the A&C Act was
passed by the Parliament of India in 1996, when the concept of emergency arbitration was practically unheard of.

In 2014, the Law Commission of India issued the 246th Report proposing amendments to the A&C Act.[2] Taking note of the rise of
emergency arbitration, the Law Commission recommended that section 2(1)(d) of the A&C Act be amended to expressly include an
emergency arbitrator where the rules of an arbitral institution provided for the appointment of an emergency arbitrator. The Law
Commission’s recommendation followed the Singaporean example where the definition of an arbitral tribunal was amended to include
an emergency arbitrator.[3] However, when the government of India introduced the proposed amendments to the A&C Act before
Parliament in 2015, in line with the 246th Report, this recommendation was not incorporated.

Objections to recognizing an emergency arbitrator under the A&C Act The legal status of an emergency arbitrator requires further
consideration as the A&C Act expressly does not provide answers. At the outset, while party autonomy may be a good basis to confer
legal status on an emergency arbitrator, it is equally important to consider the objections to conferring such legal status on an
emergency arbitrator. These objections may be summarised as follows:

• Section 2(1)(d) of the A&C Act, which defines an arbitral tribunal, does not expressly include emergency arbitrator.
• Although the Law Commission proposed an amendment to section 2(1)(d) to specifically include an emergency arbitrator, the
government of India did not include this proposed amendment in the text of the bill to amend the A&C Act in 2015 [4].
• An emergency arbitrator is transient and his or her authority ceases to exist after the constitution of the arbitral tribunal. This will result
in parties appointing different arbitrators at different points in time. This is impermissible as the A&C Act does not allow for the
appointment of temporary arbitrators.

Arguments in favour of recognising emergency arbitration in India

As mentioned above, the sanctity of the position of an emergency arbitrator comes from the basic norm of arbitration law, namely party
autonomy. In addition to this and based on a reading of the A&C Act as a whole, there are several reasons for recognising an
emergency arbitrator.

First, section 2(1)(d) of the A&C Act defines an arbitral tribunal to mean a sole arbitrator or a panel of arbitrators. Thus, the true test of
section 2(1)(d) is whether a person or authority is an arbitrator. The test for an arbitrator under Indian law is the ability to perform judicial
functions.[5] Applying this test, an emergency arbitrator is undoubtedly an arbitrator. He or she performs adjudicatory functions to grant
interim relief and determines issues, on a prima facie basis, that arise out of or relate to the grant of interim relief. In fact, arbitral
institutional rules unequivocally regard the emergency arbitrator as having all the powers of the fully constituted arbitral tribunal. For
example, the Arbitration Rules of the Singapore International Arbitration Centre 2016 (the SIAC Rules) expressly vest the emergency
arbitrator with the powers of the fully constituted arbitral tribunal, including the power to rule on his or her own jurisdiction and the power
to give interim relief [6]. The proceedings before an emergency arbitrator have a juridical seat, much like the proceedings before the fully
constituted arbitral tribunal.[7] An emergency arbitrator has to file the same declaration of lack of conflict as an arbitrator. The
appointment of the emergency arbitrator can also be challenged on the ground of lack of independence and impartiality in the same
manner as any other arbitrator.[8]

Second, the argument that Parliament did not incorporate the Law Commission of India’s recommendation to amend the definition of the
arbitral tribunal to include an emergency arbitrator is irrelevant. The legislative history of the 2015 Amendments suggests that the
proposed amendment to section 2(1)(d) of the A&C Act to incorporate an emergency arbitrator was not placed before Parliament at all.
Hence, there was no question of an amendment as the government may have possibly believed that an amendment to section 2(1)(d)
was not required at all. Further, in the context of certain other recommendations of the Law Commission in the 246th Report that were
not reflected in the 2015 Amendments, the Supreme Court held that reliance could not be placed on such aspects and the development
of law by courts could not be thwarted merely because Parliament did not incorporate a certain recommendation of the Law
Commission.[9]

Third, the argument that the concept of an emergency arbitrator is contrary to the mandatory provisions of the A&C Act , may also be
incorrect. No provision in the A&C Act prohibits emergency arbitration. On the contrary, section 2(6) read with section 2(8) provides that
parties are free to choose arbitral institutional rules as part of their arbitration agreement and such rules, as incorporated in the
arbitration agreement, are enforceable. The Supreme Court has held this exercise of ‘party autonomy’ to be the Ground norm and the
backbone of arbitration.[10] Consequently, the choice of emergency arbitration should, as a matter of principle, be considered
enforceable.

Fourth, the idea of two separate arbitral tribunal adjudicating different stages of a dispute has been recognised as valid by the Supreme
Court.[11] Section 15 of the A&C Act also makes it evident that the Act already contemplates that the mandate of an arbitrator may
terminate at any stage of the arbitration proceedings by the ‘agreement of the parties’. Hence, the A&C Act is permissive of the concept
of an emergency arbitrator.
Judicial decisions on ‘emergency arbitration’ in India prior to the Amazon–Future dispute In the past, there have been limited occasions
for Indian courts to consider orders passed by emergency arbitrators. All these decisions have come in the context of Part II of the A&C
Act, which deals with foreign-seated arbitrations and foreign arbitral awards.

In Rafes Design v Educomp,[12] the Delhi High Court had to consider directions passed by an emergency arbitrator in a
Singapore-seated arbitration. The directions were sought to be enforced through an application filed under section 9 of the A&C Act.
The Court did not, at any stage, question the legal status of the emergency arbitrator. However, the Court was conscious of the legal
position that, under Part II of the A&C Act, interim orders could not be enforced.[13] Importantly, the Court stated that parties had to take
recourse to section 9 of the A&C Act as the order passed by the emergency arbitrator could not be enforced under section 17 of the
A&C Act, [14] as section 17 was not available in a foreign-seated arbitration. This was on account of the scheme of the A&C Act that
creates different regimes for India-seated and foreign-seated arbitrations – and not because the order was an order of an emergency
arbitrator.[15] Thus, by implication, the Court equated the order of a foreign-seated emergency arbitrator with interim measures of a
foreign-seated arbitral tribunal.

Thereafter, in Ashwani Minda v U-Shin,[16] the Delhi High Court observed that the order passed by an emergency arbitrator had the
same character as an interim order passed by an arbitral tribunal, and in terms of section 9(3) of the A&C Act, a court ought not to
intervene if an emergency arbitrator has already been appointed.[17]This finding was not interfered with by the Division Bench of the
Delhi High Court in the same case.[18] Importantly, the Division Bench also held that having failed to obtain relief from the emergency
arbitrator, a party could not maintain an application under section 9 of the A&C Act seeking the same relief before a court. Thus, the
Division Bench impliedly recognised that the forum of an emergency arbitrator would serve as an alternate forum to proceedings before
national courts under section 9.

In the context of foreign-seated arbitrations, the Bombay High Court has also not interfered with or questioned the status of an
emergency arbitrator. In Plus Holdings v Xeitgeist Entertainment Group,[19] the Bombay High Court granted reliefs in an application fled
under section 9 where similar reliefs had been granted by the foreign-seated emergency arbitrator. [20]

The Amazon-Future dispute – Delhi High Court order of 21 December, 2020

The legal status of an emergency arbitrator and the validity of orders passed by an emergency arbitrator are directly at issue in the
Amazon–Future dispute. In this case, owing to certain alleged breaches of the agreements between the parties, Amazon had initiated
emergency arbitration proceedings against the Future Group under the SIAC Rules, as per the dispute resolution clause in the
arbitration agreement. After hearing parties, the emergency arbitrator passed certain directions against the Future Group.

Thereafter, Future Retail Limited (FRL), which is the main constituent of the Future Group, fled a suit before the Delhi High Court
challenging the directions passed by the emergency arbitrator. FRL sought interim directions from the Court to the effect that Amazon
could not rely on the directions passed by the emergency arbitrator. While several issues arose in the case, including the maintainability
of such a suit, the Court had to consider the validity of the order passed by the emergency arbitrator. FRL specifically argued that the
concept of an emergency arbitrator was not recognised in India and, therefore, proceedings before an emergency arbitrator were a
nullity. FRL contended that the emergency arbitrator had no legal sanction and was coram non judice.
On 21 December 2020, the Delhi High Court passed an interim order on FRL’s plea, rejecting the arguments. The Court observed that
parties were free to choose rules of an arbitral institution, including rules that provided for emergency arbitration. Importantly, the Court
observed that there was no provision in the A&C Act that prohibited emergency arbitration. Accordingly, the Court took a prima facie
view that: (i) an emergency arbitrator was not coram non judice; (ii) there was no prohibition under the A&C Act on the concept of an
emergency arbitrator; and (iii) the consequential order passed by the emergency arbitrator was not invalid.[21]

The logical follow-up enquiry to this finding was whether the emergency arbitrator was an arbitral tribunal under the A&C Act, and
whether orders passed by an emergency arbitrator were enforceable in India. In its order dated 21 December 2020, the High Court
observed that the emergency arbitrator was ‘not outside the scope of the definition of arbitral tribunal under Section 2(1)(d) of the A&C
Act’. However, a more detailed analysis was conducted by the Court in round two of this dispute, which is explained below.

Mechanisms to enforce orders of the emergency arbitrator in India

The question of whether orders or directions of an emergency arbitrator can be enforced was directly at issue in round two of the
Amazon–Future dispute. Before delving into the circumstances in which round two began, a preliminary question should be addressed:
do directions of an emergency arbitrator constitute an award or interim measures under the A&C Act?

Directions passed by an emergency arbitrator do not constitute an award under the A&C Act

Section 2(1)(c) of the A&C Act defines an arbitral award as including an interim award. While there is no clear guidance in the A&C Act
on the requirements to be fulfilled before an order can be categorised as an interim award, the Supreme Court has held that the
essence of an award is that of finality and its binding nature on the subject matter it adjudicates.[22]

The directions passed by an emergency arbitrator are binding. Almost all institutional rules specifically declare this to be the position.
Even on principle, this position is sound. The very essence of arbitration is based on party autonomy and contractual obligations, and
when the parties have voluntarily agreed to a dispute resolution mechanism that involves emergency arbitration, the outcome of the
same and reliefs granted by the emergency arbitrator should be mandatorily binding upon the parties and complied with.

However, it is difficult to characterise an emergency arbitrator’s orders as final. Most institutional rules provide that the fully constituted
arbitral tribunal has the authority to adjudicate the issues afresh in its entirety on merits and is not bound by the reasons given by the
emergency arbitrator.

In the circumstances, the defining characteristic of all arbitral awards, including an interim award, is that it is final on the issues that it
decides. This is reinforced by the Supreme Court’s observations that an interim award finally determines some of the issues between
parties in an arbitration proceeding, such that the issues ‘could not be re-adjudicated all over again’.[23] This conclusion also naturally
flows from sections 31(6) and section 35 of the A&C Act, which provides that an arbitral award, including an interim award, must be
final.
Orders passed by an emergency arbitrator may be classified as an interim measure under the A&C Act

Section 17 of the A&C Act empowers an arbitral tribunal to grant interim measures during arbitration proceedings. Indian courts have
held that orders passed under section 17 have a ‘nexus with protection’. [24]

Thus, three tests have to be satisfied before an order is classified as an interim measure. It must:

• protect the subject matter of the dispute;

• be passed during arbitration proceedings; and
• be granted by an arbitral tribunal.

First, the basis of an emergency arbitrator’s directions is the protection of the subject matter of the arbitration. Consequently, the first
test is easily met.

Second, an emergency arbitrator passes directions during the course of arbitration proceedings. Most arbitral institutions only appoint
emergency arbitrators after formal commencement of the arbitration proceedings.

The third and the most important point is whether the emergency arbitrator is an ‘arbitral tribunal’. While the Delhi High Court made
certain prima facie observations in the first round of the Amazon–Future dispute, stating that the emergency arbitrator was not ‘outside
the scope of’ the definition of an arbitral tribunal, this issue was dealt with in more detail in the Delhi High Court’s judgment dated 18
March 2021 in the second round of the Amazon–Future dispute.

Background to round two

Subsequent to the directions passed by the emergency arbitrator on Amazon’s request, Amazon alleged that the Future Group was
wilfully violating these directions and pursuing a transaction, which was specifically injuncted by the emergency arbitrator. Amazon fled a
petition in the Delhi High Court to enforce the emergency arbitrator’s directions. This petition was fled under section 17(2) of the A&C
Act. This provision states that an interim measure granted by an arbitral tribunal in an India-seated arbitration is deemed to be an order
of an Indian court and can be enforced as such. Section 17(2) was incorporated in the A&C Act through the 2015 Amendments to give
teeth to orders passed by an arbitral tribunal, such that parties are not constrained to approach courts for interim relief.[25] In addition, in
these proceedings, the Future Group raised a preliminary objection that the emergency arbitrator is not an arbitral tribunal, and
consequently, the emergency arbitrator’s directions could not constitute interim measures under section 17 of the A&C Act.

On 18 March 2021, the Delhi High Court passed an order enforcing the emergency arbitrator’s directions (the enforcement order).[26]
Rejecting the Future Group’s objections, the Court observed that the principle of party autonomy allowed parties to opt for the
emergency arbitration mechanism and this choice had to be respected. The following observations in the enforcement order are
particularly instructive.
• The Court held that emergency arbitration was an effective and expeditious mechanism. The Court noted that a party could get relief
from an emergency arbitrator within days, which was not possible before Indian courts. Thus, if the directions of an emergency arbitrator
were not enforced, it would make the mechanism of emergency arbitration redundant.
• It was observed that section 2(6) and section 2(8) of the A&C Act allowed parties to incorporate institutional rules into their arbitration
agreement, and such incorporation was enforceable. The Court emphasized Rule 1.3 of the SIAC Rules, which describes the
emergency arbitrator as an ‘arbitrator’.
• The Court considered provisions of the SIAC Rules as well as the A&C Act to hold that the emergency arbitrator was ‘for all intents and
purposes’ an arbitral tribunal. The Court specifically held that the scope of section 2(1)(d) of the A&C Act was wide enough to include an
emergency arbitrator.
• Importantly, the Court held that the current legal framework was sufficient to recognise emergency arbitration and there was no need
for an amendment in this regard. Consequently, the argument that the recommendations of the Law Commission’s 246th Report were
not followed was irrelevant.

In light of this, the Court held that the directions of an emergency arbitrator, being that of an arbitral tribunal, constituted interim
measures under section 17 of the A&C Act. The issues raised on the legal status of the emergency arbitrator and the enforceability of
his of her orders is presently before the Supreme Court of India and the final word on this issue is awaited.

Conclusion

The healthy and aggressive debate on the status and acceptance of emergency arbitration demonstrates that issues of global
importance in arbitration law are currently being contested in India. Indeed, recognition of emergency arbitration in India without an
express statutory framework will be groundbreaking. In addition to upholding the bargain of the parties, recognition of emergency
arbitration will serve a three-fold objective.

• It will support the growth of institutional arbitration in India. Many domestic arbitration institutions such as the Mumbai International
Arbitration Centre, Delhi International Arbitration Centre and the Madras High Court Arbitration Centre, in addition to international
arbitral institutions, provide for emergency arbitration and a final ruling in favour of emergency arbitration will be a much-needed shot in
the arm for institutional arbitration in India.

• Concomitant with the rise of institutional arbitration, the recognition and enforceability of orders passed by an emergency arbitrator will
reduce the dockets of Indian courts, which are already overburdened with a significant backlog of cases. Indeed, the covid-19 pandemic
and the resultant limited functioning of courts has demonstrated the need for seeking out alternative, efficacious mechanisms for dispute
resolution. Recognition of such mechanisms will also be consistent with the principle of minimal judicial intervention in respect of
arbitration proceedings, a principle enshrined in article 5 of the UNCITRAL Model Law, which is incorporated in section 5 of the A&C
Act.

• There will be a rise in India-seated arbitration proceedings. If the orders passed by an emergency arbitrator are held to be enforceable
under section 17(2) of the A&C Act, which is only available in an India-seated arbitration, international parties may seriously consider
choosing India as the seat of arbitration.
Finally, and importantly, recognition of emergency arbitration will also be consistent with those two familiar pillars of arbitration: party
autonomy and efficiency.

FootNotes:

1. The authors act as counsel for Amazon in the dispute. The views expressed in this article are personal.
2. Report No. 246, Amendment to the Arbitration and Conciliation Act 1996, August 2014, Chapter III.
3. Section 2(1), International Arbitration Act, 2012 (Singapore) [for international commercial arbitrations]; Section 2(1), Arbitration Act,
2002 (Singapore) [for domestic arbitrations].
4. Arbitration and Conciliation (Amendment) Bill, 2015 (as introduced in the Lok Sabha).
5. K K Modi v K N Modi (1998) 3 SCC 573.
6. Schedule I, Rule 7, SIAC Rules.
7. Schedule I, Rule 4, SIAC Rules.
8. Schedule I, Rule 5, SIAC Rules.
9. Avitel Post Studioz Limited v HSBC PI Holdings (Mauritius) Limited and Ors (2020) SCC Online 656.
10. Centrotrade Minerals v Hindustan Copper Limited, (2017) 2 SCC 228.
11. id.
12. Raffles Design v Educomp, (2016) SCC Online Del 5521.
13. Part II of the A&C Act has not incorporated article 17H of the UNCITRAL Model Law, which enables enforcement of interim
measures granted by a foreign seated arbitral tribunal.
14. Section 17(1) of the A&C Act, which is only available in India-seated arbitrations, is set out below.
17. Interim measures ordered by arbitral tribunal – (1) A party may, during the arbitral proceedings, apply to the arbitral tribunal –
(i) for the appointment of a guardian for a minor or person of unsound mind for the purposes of arbitral proceedings; or
(ii) for an interim measure of protection in respect of any of the following matters, namely:-

(a) the preservation, interim custody or sale of any goods which is the subject-matter of the arbitration agreement;
(b) securing the amount in dispute in the arbitration;
(c) the detention, preservation or inspection of any property or thing which is the subject-matter of the dispute in arbitration, or as to
which any question may arise therein and authorizing for any of the aforesaid purposes any person to enter upon any land or building in
the possession of any party, or authorising any samples to be taken, or any observation to be made, or experiment to be tried, which
may be necessary or expedient for the purpose of obtaining full information or evidence;
(d) interim injunction or the appointment of a receiver;
(e) such other interim measure of protection as may appear to the arbitral tribunal to be just and convenient, and the arbitral tribunal
shall have the same power for making orders, as the court has for the purpose of, and in relation to, any proceedings before it.
15. Raffles Design v Educomp (2016) SCC Online Del 5521.
16. Ashwani Minda v U-Shin Limited, Order dated 12 May 2020 in OMP(Comm.) 920/2020 (Delhi High Court).
17. Section 9(3) of the A&C Act expressly refers to section 17 of the A&C Act.
18. See Ashwani Minda v U-Shin Limited (2020) SCC Online Del 721.
19. Plus Holdings v Xeitgeist Entertainment Group (2019) SCC Online Bom 13069.
20. Future Retail Limited v Amazon.com NV Investment Holdings LLC (2020) SCC Online Del 1636.
21. id.
22. Morgan Securities & Credit (P) Ltd v Modi Rubber Ltd (2006) 12 SCC 642.
23. IFFCO v Bhadra Products (2018) 2 SCC 534.
24. Asian Electronics v MP State Electricity Board (2007) 3 MPLJ 203.
25. Prior to the 2015 Amendments, an order of an arbitral tribunal could only be enforced through an application fled in court under
section 27(5) of the A&C Act for breach of such an order. However, such an application would have had to be prefaced by the arbitral
tribunal granting a party’s request to approach the court under section 27(5). The change of position by way of the 2015 Amendment
was acknowledged by the Supreme Court in Alka Chandewar v Shamshul Ishrar Khan (2017) 16 SCC 119.
26. Amazon.com NV Investment Holdings LLC v Future Coupons Private Limited (2021) SCC Online Del 1279.