Thread by @barandbench

Delhi High Court begins hearing Future Retail's suit against Amazon in relation to the emergency arbitrator award stalling its deal with Reliance Retail.

#FutureRetail #Amazon #Reliance

Suit is listed before Justice Mukta Gupta.

Senior Advocate Gopal Subrmanium will continue his submissions on behalf of Amazon.

#Amazon #FutureRetail #Reliance

I want to deal with a point the court discussed before closing the hearing yesterday. What is the cognizablity of the award. They have not challenged the award for whatever reasons : Subrmanium

Who is there for Plaintiff? : Court

Mr Salve, Mr Khambata: Senior Adv Rajiv Nayar

If I can't go into the legality or illegality of teh award, can a person be restrained from making a representation? What do you say Mr Singhvi. You are the main party : Court

It is not an appeal from an award. It is to tell the Court about the general status of an emergency award. The content of the award is not required to be challenged: Senior Adv Abhishek Manu Singhvi who appears for Reliance

It is the minimalist approach of the Plaintiff: Singhvi

This is the core issue in the matter. You say you are not challenging the award. Other believes it is legal. Everyone is working on their beliefs: Court

I'm disregarding their claim on not challenging the award. My position is recognised under Part I: Subrmanium

Under 1940 Act, an award is not waste paper. It is final and binding under first schedule. You cannot have a second reference on the same issue even if it is not a decree: Subrmanium

In the 1996 Act, it was done away with. The Act makes an award a decree of the Court. Party autonomy is give primacy: Subrmanium

It is upto the parties how they want to frame their arbitration. Arbitration clauses are to be given supremacy: Subrmanium

Subrmanium refers to Antrix case.

The parties here agreed to ICC rules and Supreme Court says that they could not change it : Subrmanium

Delhi has Delhi International Arbitration Centre. This has a rule for emergency Arbitration. This is part I Arbitration, purely domestic. The emergency award is enforceable under the Act: Subrmanium

Mumbai, Madras Arbitration Centres have similar Rules on emergency Arbitration. It is inspired from SIAC Rules. There is no incompatibility between emergency Arbitration and Part I: Subrmanium

What does their argument hinge on then? The Law Commision Report: Subrmanium

Subrmanium refers to a judgement.

Supreme Court said that merely because Parliament did not act on the Law Commision, it is no bar the Court will interpret the provision clearly : Subrmanium

It does not suggest that Parliament wanted otherwise and wanted status quo to prevail: Subrmanium

When institutional rules are adopted, parties agreed to SIAC Rules. Jurisdiction of Delhi courts was subject to arbitration: Subrmanium

There is an arbitration clause. The suit is not maintainable: Subrmanium

Courts will enforce the arbitration agreement and not adjudicate. A formal application under section 8 is also not necessary: Subrmanium

All points were urged before the emergency Arbitrator because it was under the scope of the arbitration: Subrmanium

If it is an order by Emergency Arbitrator, section 17 says order passed by a Tribunal. It includes the emergency arbitration by virtue of SIAC Rules: Subrmanium

The parties are passed by the directions of the emergency Tribunal. The Biyanis are common in all this. They are parties to the arbitration agreement: Subrmanium

Amazon repeatedly asked FRL to see what are the ways: Subrmanium

We brought in Samara. All this is noted by Arbitrator. The breach became evident and they finally swung to the other side: Subrmanium

Rights and obligations of parties shall remain in force pending the arbitration. Arbitrator has followed tbe spirit. After finding a prima facie case, he passed the directions : Subramanium

Even something is in order of the court, there is a procedure. A man cannot unilaterally say that the award is bad: Subramanium

Where is quorum non judice? He was appointed as per the arbitration agreement: Subrmanium

4k+ pages were argued and then285 para award was passed: Subramanium

Even in relation to awards, an award is final and binding unless you take steps to step it aside. Section 17 equates it with the order of the court : Subramanium

Before Emergency Arbitrator they (promoters) say that they are going to appoint an Arbitrator. So you hold back : Subramanium

Even without emergency award, my client could go to the statutory authorities. Why was there the need of emergency award? We wanted to go by the letter of the arbitration agreement: Subramanium

Subramanium reads the SIAC Rules.

Subrmanium refers to Rule 30.

The Rule pertains to Interim and emergency interim relief.

Parties can choose any set of Institutional rules. Once they choose it, courts say that you are bound by it : Subramanium

Our DIAC Rules have a similar pattern : Subramanium

Subramanium reads the relevant DIAC Rules.

Subrmanium reads the SIAC Rules.

Emergency Arbitrator held it by way of zoom. Award is deemed to be rendered in seat ie Delhi. First and last page of the award says "as rendered" in Delhi : Subramanium

The Emergency Arbitrator said he would give everyone proper time and asked if status quo would be maintained. They were hesitant. There is a transcript to show how proceedings were held. Full hearing was held : Subramanium

They undertake to comply with it. When there is statutory right to appeal, you cannot waive it: Subramanium

When you subscribe to the Rules of such centres (Delhi, Madras, Mumbai), you can have an emergency arbitration even for domestic arbitration: Subramanium

How can it be argued that Part 1 prohibits it ? : Subramanium

Subramanium reads Rule 14 of DIAC Rules.

This is a best practice procedure now: Subramanium

Rule 14 refers to emergency Arbitration.

It is not ex facie illegal. To call something a nullity means there is inherent lack of jurisdiction: Subramanium

Subramanium continues to read the Rule and says it is identical to the SIAC rule on emergency Arbitration.

There is no escape when parties agree to such procedure. Although for a limited duration, he is still an arbitrator whose order is capable of being enforced under Arbitration Act: Subramanium

Subramanium reads the Mumbai International Arbitration Centre Rule.

It is also Rule 14. Interim and Emergency Relief : Subramanium

Very similar to SIAC and Delhi Rules: Subramanium

Subramanium reads the Madras High Court Rules.

It is Rule 19: Subramanium

Is this not an agreement of the parties? The moment you sigh an agreement with SIAC rules, you are bound by stipulation that when there is an award my emergency Arbitrator you are bound by it : Subramanium

Even without going through process of law, you say it is non est : Subramanium

Idea of the Institutional Rules is to relieve the courts from section 9 Petitions. Don't clog up the courts as you are before the tribunal: Senior Adv Rajiv Nayar supplements.

I will not take more than an hour: Subramanium

Counsel requests that Senior Adv Harish Salve's rejoinder may be taken up tomorrow as he is engaged in another matter.

Court breaks for lunch.

Hearing to resume at 2.20 pm.

Hearing resumes.

Now section 58 itself provides.. you can have contracts which prohibit transfer of security: Subramanium

Emergency Arbitrator accepted our cross undertaking: Subramanium

Undertaking was given by the parties and directions were passed : Subramanium

How an award is enforced is stage two. How is it enforced has nothing to do with its binding nature : Subramanium

The suit itself is not maintainable because all these are matter of reference and are covered by arbitration. There cannot be re-agitation of these points: Subramanium

Until impeached, an award which is on the face of it is regular is binding even though not formally enforced: Subramanium

1996 Act has gone a little further from 1996 Act: Subramanium reads the judgment.

You cannot keep on challenging over and over again. Mr Salve says waste paper. Plese see, Justice Sikri says it is not waste paper: Subramanium continues to read.

In 1996 Act, an award is a decree of the court and an interim award is an order of the court : Subramanium

Subramanium continues to read a judgement.

An award is binding unless set aside by a court of competent jurisdiction: Subramanium

When award is not enforced, it is not a waste paper .. there is error on behalf of what is contended by the Plaintiff. If I want to enforce it, I can move an application under section 17. If I want to. But it is not a test of its legality : Subramanium

Party autonomy is the back bone of arbitration. This court has held it in many cases : Subramanium

Subramanium reads a judgement.

There is no doubt that SIAC rules govern the arbitration, they are the expression of party autonomy in this case. So an emergency Arbitrator is as good as an Arbitrator. : Subramanium

Subramanium reads Antrix case.

When you choose any institutional rule, you have to follow the regime prescribed under the rules: Subramanium

Subramanium refers to Raffles judgement.

UNCITRAL comes in part II and does not refer to Part I : Subramanium

Emergency awards are per se recognised by Delhi HC and Surpreme Court. There is nothing wrong as such : Subramanium

Subramanium reiterates that when something recommended by Law Commission is not accepted by Parliament by way of an amendment, it doesn't mean that the old law continues.

Subramanium reads a judgement authored on this point by Justice Nariman.

All these arguments .. all of them were urged before the Emergency Arbitrator. I was looking for something new: Subramanium

Sometimes Parliament may decide that it (the recommendation) is already there and the court may interpret: Subramanium

Subramanium refers to the full transcript of the Emergency Arbitration.

Subramanium reads a portion of the transcript.

The Arbitrator recognised that Amazon can always go before the statutory authorities: Subramanium

What is the question of frustrating the arbitration here? Everyone expect FRL, Mr Rohatgi's client apoint an arbitrator on November 4 : Subramanium

after this award is passed, I only say that there is an award. I am entitled to say that. FRL is bound by it unless they take steps to challenge it : Subramanium

The court asked if FRL SHA was in contemplation. Please see the answer. This is from Trilegal who acts on behalf of all Companies.. : Subramanium refers to a document

All agreements (FRL SHA, FCPL SHA and Share Subscription Agreement) are on the plate together: Subramanium

Argument is that FRL did not amend it's Articles.. FCPL amended its Articles : Subramanium

Subramanium reads the definition of control under takeover code.

It is the same as under companies act.. I don't have any control in FCPL. My voting rights are only 25% : Subramanium

Protection that I have is that don't transfer the business or keep it within the company. This is not control: Subramanium

Subramanium refers to ArcelorMittal case on investors having protective rights.

Neither FCPL nor FRL, I'm not controlling their day to day affairs : Subramanium

Control is proactive and not reactive power. Am I in the driving seat? That is the question: Subramanium continues to read the judgment.

Emergency Arbitrator says I accept the claimant's submissions that these are just investor rights : Subramanium

The purported consent in the case is not produced. The emergency Arbitrator records that there is nothing to show that there was consent for the August Resolution: Subramanium

Even when it comes to tort of interference in contracts, the contract itself has to be legal. The sanctity of contracts is to be preserved : Subramanium

Primary recondition is that FRL must have an untainted lawful agreement with Reliance. But where is the agreement? : Subramanium

It is a product of breach. Bypasses an award : Subramanium

It is in the domain of the arbitrator but it is being argued here : Subramanium

Subramanium refers to Justice Gupta's decision in GMR case.

Non signatories in India are bound by awards, there's no problem: Subramanium

Subramanium refers to another judgement.

Section 5, section 8 are attracted in this case. A suit cannot be entertained to stall the emergency Arbitrator's award without taking the remedies under the Arbitration Act: Subramanium

Even an administrative order is valid and you cannot proceed by assuming it to be void unless you challenge it : Subramanium

Merely because it not to your favour, you say it is nullity, non est.. an order is an order: Subramanium

Subramanium refers to judgements.

There cannot be a collateral wishing away of an order : Subramanium

Mandatory injunctions are never granted.. this is a non maintainable suit: Subramanium

It seeks everything in contradiction of the award : Subramanium

You cannot restrain a person from going to a court. My friend says don't go to statutory authorities. I am going because there is an award in my favour. It is not great sin : Subramanium

There cannot be a restrain on going for legal remedies. The remedy in this case is in the Arbitration Act and not elsewhere: Subramanium

In the award, the Arbitrator has considered everything upto end of August 2020: Subramanium

Subramanium reads portion of award on promoters driving and causing FRL to enter into a disputed transaction.

FRL was aware that Amazon's consent was needed in case of sale or retail assets particularly to a restricted person : Subrmanium reads the Award

The Arbitrator takes note that there is interconnectivity of agreements : Subramanium

Subramanium refers to more documents/letters to regulators.

Subramanium reads the award, states that the emergency Arbitrator held that prima facie FRL breached the terms of contract.

What is the cause of action for the suit? They say it arose of Amazon wrote to the Plaintiff on October 3. The suit is filed well after the award. The frame of the suit is anti Arbitration: Subramanium

When there is an Arbitration clause, how can these be the cause of action : Subramanium reads the portion of the plaint on cause of action

The emergency arbitrator, out of maximum transparency, asked for papers and clarification. How can that be cause of action? : Subramanium

He doesn't challenge the award. But they say that the cause of action arose when the Arbitrator "issued a document titled emergency award". : Subramanium

Can the law restrain a person from taking advantage of an award passed in his favour? : Subramanium

Money has gone into the company from me.. how can he now day that now there is an agreement with another company: Subramanium

Say*

How can there be an injunction against me? This is all within the province of Arbitration..I will just give paragraph numbers. The CCI filings disclose two agreements: Subramanium

All the points before the court were urged before the Arbitrator. The plaintiff is the beneficiary of the monies invested by Amazon. Hoe can it now say that violation of FDI policy: Subramanium

We introduced Samara as problem solver for FRL : Subramanium

This suit is very doubtful.. it is not maintainable at all. It seeks to stall an existing sacred arbitration agreement, a process which is already underway: Subramanium

Section 5 and 8 are the general principles that guide this court.. the Arbitration has commenced and the Plaintiff has participated. Why should it not follow the rigour then : Subramanium

If the emergency award was not in my favour, would the plaintiff still say that the emergency award was not binding: Subramanium

Nothing prevented the plaintiff (FRL) from coming earlier. Party autonomy must be respected in this case: Subramanium

Arbitration agreement itself says that pending award, the parties will maintain the obligations under the agreement: Subramanium

Validity of the Arbitration clause has not been assailed: Subramanium

There is no scope in the suit or the application that anything should be said about the award: Subramanium

The plaintiff side steps the Arbitration Act and says I want a simple order that you don't write to statutory authorities.. It is a legal and binding award. A party cannot denude itself of its obligations under the award : Subramanium

We were not going to let FRL go down. But he hooked on to the restricted person and acted in breach : Subramanium

The case is not that we were unwilling to help. We were exploring possibilities acceptable in law : Subramanium

I would be happy to answer any question that the court may have: Court

That's all, Mr Subramanium: Court

Ship of Arbitration has sailed : Subramanium

I want to add a line of gratitude: Subramanium thanks his colleagues who "coached" him.

I want to thank my colleagues on the other side : Subramanium

Senior Advocate Rajiv Nayar supplements the submissions made by Subramanium.

After participating in the arbitration proceedings willingly, the plaintiff is asking that the arbitration be abandoned: Nayar

Senior Adv Amit Sibal points out that FRL /Future Group said that they would apoint an Arbitrator and thus no order should be passed.

They waited for five weeks before coming to the court. They can surely wait for another five weeks. The Arbitration Tribunal is on the cusp of formation: Sibal

They signed the Arbitration clause on adoption of SIAC Rules. The suit is an afterthought and not a genuine reaction : Sibal

They say there is a caveat to SIAC Rules qua the Indian Arbitration Act. But there is no reference to the Indian Arbitration Act. There is no inconsistency between SIAC Rules and Indian Law: Sibal

So Mr Salve will rejoin tomorrow? : Court

Yes: counsel

File written submissions by day after tomorrow: Court

Court adjourns hearing.

Matter to be heard next tomorrow.