Amazon v. Future | Future Retail seeking to terminate arbitration proceedings with Amazon: Read Delhi HC’s decision on 4 significant points

Delhi High Court: Amit Bansal, J., noted that,

“…there is only a very small window for interference with orders passed by the Arbitral Tribunal while exercising jurisdiction under Article 227. The said window becomes even narrower where the orders passed by the Arbitral Tribunal are procedural in nature.”

Instant petitions arose out of the same arbitration proceedings involving (i) Amazon.com NV Investment Holdings LLC (ii) Future Coupons Private Limited (iii) Future Retail Limited.

Petitioners’ grievance was that in terms of the impugned orders dated 29th December 2021 and 30th December, 2021, no date had been fixed for a hearing on the termination applications. However, the said grievance of the petitioners stood redressed by the subsequent email dated 01st January, 2022 of the Arbitral Tribunal (placed on record before this Court as a part of the additional affidavit filed on behalf of the petitioners in CM(M) 3/2022), in terms of which the date of 8-1-2022 was fixed for hearing on the termination applications.

Analysis, Law and Decision

Willingness of Arbitral Tribunal

High Court observed that it does not find any merit in the contention that termination applications should have taken priority over the hearings of the expert witnesses. Court stated that, just because the hearing of the termination applications was scheduled for a date after the hearings of the expert witnesses did not mean that the Arbitral Tribunal was not willing to consider the said applications on merits.

It is in the sole discretion of the Arbitral Tribunal to decide whether the termination applications should be heard before or after the hearings of the expert witnesses.

Court added that it cannot interfere with the scheduling of the arbitration proceedings as sought in the instant case.

Is it true that 1 Day may not be sufficient for oral hearing?

The Bench did not find merit in the above-stated contention and noted that the Arbitral Tribunal has directed the parties to make detailed written submissions in advance. Clearly, this is to reduce the time for making oral submissions. In any case, the Arbitral Tribunal has observed that in the event that the hearing is not concluded in one day, another date will be fixed for the said purpose.

In Court’s opinion, there was nothing to suggest that the Arbitral Tribunal had denied equal opportunity to the parties, or the Tribunal had not been accommodating towards requests of the petitioners.

It is a matter of common knowledge that in international commercial arbitrations involving parties as well as specialist arbitrators from different jurisdictions, it is difficult to schedule dates and therefore, the requests of the parties to adjourn or postpone the dates fixed much in advance are generally not acceded to.

Continuing the above-stated, Court added that in the present matter, Amazon is a foreign entity, whereas the Future Group Companies are Indian Companies.

Further, the Bench found no infirmity in the decision of the Arbitral Tribunal in not postponing the hearings of the expert witnesses scheduled in January, 2022. In the opinion of this Court, acceding to such a request for adjournment, is bound to derail the arbitration proceedings as it would be very inconvenient and cumbersome to schedule fresh dates for the arbitration proceedings, taking into account the availability of all arbitrators as well as the experts.

Some Lawyers representing petitioners tested COVID-19 positive

High Court observed that the above-stated cannot be a ground for postponement of hearings and stated that COVID-19 pandemic is a reality that the world has been living with for the last two years and may continue to live with for the near foreseeable future. Therefore, the business community at large as well as professionals, including lawyers/law firms, would have to learn to live with this reality and continue with their regular professional and business activities, subject of course, to any regulations that may be imposed by state/national governments.

Even as of today, when COVID-19 cases are on the rise in India, Courts in the country, including the Supreme Court of India, continue to function, albeit through the virtual mode. Functioning during the COVID-19 pandemic is a reality that lawyers, judges and arbitrators have had to come to terms with.

Further, the Court elaborated stating that the parties in the present arbitration proceedings are big corporation and have a battery of lawyers representing them before multiple fora, even if some lawyers have tested positive for COVID, it can be duly expected that the parties and their law firms would endeavour to make alternate arrangements.

An adjournment at the last minute cannot be sought in respect of an international commercial arbitration of this magnitude, involving arbitrators, counsels and experts from different jurisdictions.

 Whether in exercise of jurisdiction under Article 227 of the Constitution of India, this Court can interfere with the impugned orders dated 29th December, 2021 and 30th December, 2021 passed by the Arbitral Tribunal?

 High Court referred to the Supreme Court decision in Deep Industries Ltd. v. Oil and Natural Gas Corporation Ltd., (2020) 15 SCC 706, which deals with the scope of interference with arbitration proceedings in exercise of jurisdiction under Article 226/227 of the Constitution of India.

Bench observed that there is only a very small window for interference with orders passed by the Arbitral Tribunal while exercising jurisdiction under Article 227. The said window becomes even narrower where the orders passed by the Arbitral Tribunal are procedural in nature. Hence, the said window cannot be used for impugning case management orders passed by the Arbitral Tribunal which are in the nature of procedural orders.

This Court, in exercise of jurisdiction under Article 227, cannot dictate to a duly constituted Arbitral Tribunal, the manner and the procedure of carrying out the arbitration proceedings.

Bench added that arbitrators have far greater flexibility in adopting procedure to conduct the arbitration proceedings as compared to the Civil Court.

High Court concluded stating that nothing was found to suggest that the Arbitral Tribunal has denied equal opportunity to the parties or that it has not been accommodating towards requests of the petitioners.

Mere fixation of tight timelines or denial of requests for adjournment by the Arbitral Tribunal or deciding the order in which the Arbitral Tribunal considers the applications filed by the parties cannot be reason enough to contend that the orders of the Arbitral Tribunal are perverse or lacking in inherent jurisdiction.

Furthermore, all rights and contentions of the petitioners with regard to the violation of any provisions of the statute as well as the arbitration being conducted in violation of the agreement would be open to challenge by the petitioners under Section 34 of the Arbitration and Conciliation Act.

In view of the above discussion, petitions were dismissed. [Future Retail Ltd. v. Amazon.Com NV Investment Holdings LLC, 2022 SCC OnLine Del 13, decided on 4-1-2022]


Advocates before the Court:

For the petitioner:

Mr. Harish Salve, Mr. Sandeep Sethi, Mr. Ritin Rai, Senior Advocates with Mr. Raghav Shankar, Ms. Madhu Gadodia, Mr. Harshvardhan Jha, Ms.Ritika Sinha and Ms. Arshiya Sharda, Advocates.

For the respondents:

Mr. Gopal Subramanium, Mr. Rajiv Nayar, Mr. Gourab Banerji, Mr. Amit Sibal, Mr. Nakul Dewan, Senior Advocates with Mr. Anand S Pathak, Mr. Amit K Mishra, Mr. Shashank Gautam, Ms. Sreemoyee Deb, Mr.Vijay Purohit, Mr. Mohit Singh, Mr. Promit Chatterjee, Ms. Anubhuti Mishra, Mr. Shivam Pandey, Ms. Samridhi Hota, Ms. Nikita Bangera, Mr. Pratik Jhaveri, Mr. Faizan Mithaiwala, Ms. Didon Misri, Mr. Chetan Chawla, Mr. Vijayendra Pratap Singh, Mr. Rachit Bahl, Ms. Roopali Singh, Mr. Abhijnan Jha, Mr. Priyank Ladoia, Mr. Tanmay Sharma, Ms. Vanya Chhabra, Mr. Arnab Ray, Mr. Vedant Kapur, Mr. Shaurya Mittal, Mr. Abhisar Vidyarthi, Mr. Kartik Nayar, Mr. Pawan Bhushan Ms. Hima Lawrence, Ms. Ujwala Uppaluri, Mr. SP Mukherjee, Mr. TS Sundaram, Mr. Vinay Tripathi, Mr. Aishvary Vikram, Mr. Kaustubh Prakash, Ms. Anushka Shah, Ms. Neelu Mohan, Ms. Smriti Kalra and Ms. Manjira Dasgupta, Advocates for respondent No.1.

Mr. Mukul Rohatgi, Mr. Dayan Krishnan, Senior Advocates with Mr.Mahesh Agarwal, Mr. Rishi Agrawala, Mr. Karan Luthra, Mr.Pranjit Bhattacharya, Mr.Sanjeevi Seshadri and Mr. Ankit Banati, Advocates for respondents No.2 to 13.

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