EMERGENCY ARBITRATION IN INDIA

ARBITRATION LAW

Dr Vishnu Kumar sir

M DHEMETHRI
2OLLB026
SIXTH
 ACNOWLDEGEMENT

I am grateful to our lecturer Dr Vishnu Kumar sir, who has given me the opportunity to do this
project under the theme emergency arbitration in India which is a great learning process and also
the research that helped me gain a new perspective I look forward to be a part of many more
learning curves in future Thank You sir
 INDEX

Synopsis …………………………………………………………………………………………1

Abstract…………………………………………………………………………………………3

Introduction ……………………………………………………………………………………4

Emergency arbitration under international law………………………………………………7

Law commissions report on emergency arbitration in India…………………………………8

Indias Initiative Towards EA…………………………………………………………………9

Challenges………………………………………………………………………………………10
Landmark cases ………………………………………………………………………………11

Analysis…………………………………………………………………………………………13

Conclusion………………………………………………………………………………………14

Bibliography…………………………………………………………………………………15
 Synopsis

Introduction

In the gamut of a sound and systematised International Arbitration, an emergency relief is often
described as an Achilles Heel1 Emergency Arbitration EA in the guise of an emergency relief is an
upcoming concept in the field of arbitration suitable for those who want to protect their assets and
evidence that might otherwise be altered or lost Such arbitration is usually agreed to and arranged by
the parties themselves without recourse to a Tribunal at the first instance The proceedings either
domestic or international are conducted by an Arbitrator as per the agreement between the parties or
with the concurrence of the parties

Objective of the study: The researcher in this study tries to explain the domestic institutional rules
that governs the emergency arbitration proceedings, talks about the international and domestic
standards of emergency arbitration and recommends amendments and solutions that would help in
the robust of emergency arbitration

Scope of the Study: The researcher has limited the scope to the conceptual overview, comparative
analysis between the international and domestic standards of emergency arbitration and
recommendation of amendments and solutions that would help in the robust of emergency arbitration

Research Question: wether the emergency arbitration in India is serving its purpose or not ?

Research Methodology : The researcher has adopted the doctrinal type of research

Chapterization :

1. CHAPTER 1 consists of introduction , EA under Indian and international law

2. CHAPTER 2 consists of challenges , law commissions report and Indias

initiatives towards

3. CHAPTER 3 consists of case laws and analysis part

4. CONCLUSION
Literature review

SECONDARY JOURNAL ARTICLES

1. Emergency arbitration in India : A critical appraisal of the institutional framework

Abhinav Gupta & Sriroopa Neogi

2. Emergency arbitration and India a long overdue friendship by Akash Srivastav https://
heinonlineorg/HOL/Page?handle=heinjournals/
ijal10&div=11&g_sent=1&casa_token=&collection=journals

PRIMARY ARTICLES

1. Emergency Arbitration: An Approach Towards the Advancement: Ms Shivangi Sinha*,

Dr Jyoti Dharm

BOOKS

1. Emergency Arbitration By Cameron Sim : The book combines a practical approach,

including the use of flowcharts and tables, with indepth analysis of important issues
arising in emergency arbitration

2. Interim and Emergency Relief in International Arbitration : it addresses issues

relating to obtaining interim measure orders, including the relevant applicable standards
such as irreparable harm that various international courts and tribunals, under the ICSID,
UNCITRAL, ICC, SCC, and some domestic law jurisdictions often apply It also
touches upon theoretical and practical issues involving compliance with and
enforcement of interim measures in international arbitration

Citation style : Chicago stule of citation

Mode of research : the researcher opted for doctrine mode if research

 ABSTRACT

Emergency“Arbitration means there is a situation which is been encountered and need to be resolved
through an arbitration but on an early basis looking after its nature of vitalness It is one of the
mechanisms which allows the disputing parties to apply for urgent interim relief before an arbitration
tribunal has been duly constituted Parties opting for ADR , if gets delayed ultimately have to go for
litigation, but the avoidance of which may be the principal fact for them to choose for Arbitration To
overcome this dilemma the best logical solution which can be considered is to go for Emergency
Arbitration In this paper I will try to cover and focus more on the conceptual overview of emergency
arbitration In addition to it , ill also focus on concerns surrounding the recognition and enforcement of
emergency arbitration orders , comparison between international and domestic arbitration rules and
discussion regarding numerous amendments for the domestic institutional framework that can assist in
formulating a robust emergency arbitration procedure in India”
 Introduction

An“emergency arbitration EA is an arbitration mechanism where parties can seek urgent interim
relief prior to the formation of the arbitral tribunal It is a time bound process, with the emergency
arbitrator expected to pass an emergency award within a specified period typically around 1415
days from the date of the appointment of the emergency arbitrator EA has become very popular
over the past decade, with almost all major arbitral institutions having incorporated EA provisions
in their”rules1

InIndia,“the EA mechanism gained significant limelight during the Amazon v Future Retail dispute
where, for the first time, an emergency award was held to be enforceable by the Supreme Court of
India However, despite the said judgment, is EA an effective mechanism in Indiarelated disputes
disputes involving Indian parties or having India as the seat of arbitration? Should parties seeking
urgent interim relief consider invoking EA or would they be better served approaching Indian
courts for such relief? These are the questions that this article seeks to answer”

Emergency arbitration under Indian Law

The“Arbitration and Conciliation Act, 1996 does not provide for EATherefore, it can be invoked
only if the parties agreed to institutional arbitration providing the option of EA Also, until the
Amazon case, there was no clarity on the enforcement of an emergency award in India This is
because the Act only defines an award to include an interim award It does not specifically provide
for the requirements that are to be fulfilled for an order of an arbitrator to be declared an award”

1 Born, Gary Modern Arbitration: Live – An Interview with Gary Born SCC Online Blog, March
26, 2022 https://wwwscconlinecom/blog/post/2022/03/26/emergencyarbitration/
Given “this lack of clarity, courts in India interpreted an award to mean an order which finally
determines some part of the dispute or issue between the parties in an arbitrationHowever, most
EA rules provide that an emergency award may be confirmed, modified or revoked by the arbitral
tribunal once it is appointed and, therefore, it is difficult to say that an emergency award finally
determines an issue or some part of the dispute in an arbitration Also, Section 17 of the Act prior to
its amendment in 2015, which provides an arbitral tribunal with the power to grant interim relief,
did not expressly provide for such interim relief to be enforceable as an order of the court”

That being“said, Indian courts, when faced with having to consider emergency awards, have tried
to uphold their sanctity The Bombay High Court and the Delhi High Court in the cases of HSBC v
Avitel and Raffles Design v Educomp respectively, granted parties relief similar to those granted in
the EA, in Section 9 proceedings initiated subsequent to the EA However, in the case of Raffles
Design, the Delhi High Court observed that a court under Section 9 would consider the request for
interim relief independent of the emergency” award2

The“Delhi High Court in the case of Ashwani Minda v UShin Ltd refused to grant interim reliefs
under Section 9 of the Act in line with the order of the emergency arbitrator One of the grounds for
refusing the interim relief was that once a party had failed in its attempt to get interim relief in an
EA, it was not open for that party to use Section 9 proceedings to get a second bite at the cherry As
is evident from the above, despite the challenges in enforcing emergency awards, courts have
respected EAs and emergency awards However, they were all in subsequent proceedings for
interim relief under Section 9 of the Act”

2Born, Gary Modern Arbitration: Live – An Interview with Gary Born SCC Online Blog, March
26, 2022 https://wwwscconlinecom/blog/post/2022/03/26/emergencyarbitration/
It is pertinent to note that the above judgments were all passed in the context of foreignseated
arbitrations The Amazon case considered the issue of enforcement of an emergency order in an
Indiaseated arbitration In this case, an emergency award was secured by Amazon against Future
Retail in a Singapore International Arbitration Centre SIAC administered, Indiaseated arbitration
Future Retail failed to comply with the emergency award and Amazon filed for enforcement of the
same The Supreme Court in its judgment held that an emergency award can be referred to and are
made under Section 17 of the Act, thereby giving emergency awards the status of interim orders
passed by an arbitral tribunal

Section 17 has been amended in 2015 to make interim orders enforceable like an order of a civil
court Therefore, an emergency award in an Indiaseated arbitration would be akin to an interim
order passed by an arbitral tribunal and similarly enforceable The principle laid down in this
judgment would be applicable only to Indiaseated arbitrations as Section 17 is not applicable to
arbitration seated outside India

Two propositions therefore emanate from the above analysis:

1. Emergency awards passed in Indiaseated arbitration are enforceable like orders passed by
Indian civil courts

2. 2 In foreignseated arbitration, emergency awards passed therein are unenforceable and,

therefore, subsequent Section 9 proceedings would necessarily have to be filed in the relevant
Indian courts seeking interim relief The said courts would then consider the request of the
applicant on its own perspectives
 Emergency arbitration under international law

In“1990 the ICC launched its PreArbitral Referee Procedure arguably the first attempt by a major
institution to provide emergency relief prior to the constitution of the tribunal Whilst the 1998
revision of the ICC Rules added provisions allowing applications for urgent measures to be made
directly to courts, the ICCs most recent amendments provide the ICC Rules with an internal
mechanism for dealing with urgent applications he intention behind the EA procedure in the ICCs
2012 Rules is that an applicant should be able to secure effective interim relief in less than three
weeks from the commencement of the procedure Although there are limits to what interim
procedures can reasonably achieve, it appears that the ICC hopes that this new procedure will
contribute to the expanding facilities available to parties resorting to arbitration to resolve their”
disputes 3

Singapore International Arbitration Centre SIAC

SIACs“approach to emergency procedures relies primarily on EAs who can be called upon to
answer emergency issues before the arbitral tribunal has been constituted It should be noted from
the outset that these procedures apply to the relevant arbitration agreements by default meaning
that there is no requirement for the parties to optin to their availability As will be seen, the default
operation of EA rules or the requirement to explicitly opt out of their provisions is an important
developing feature of EA procedures across the range of institutions discussed in this article The
practical effect of the default operation of these provisions is that EA procedures become more
widely available to disputing parties and there will likely be a continuing increase in applications
for EA interim relief”

3Khan, Stephanie and Lim, Benson Emergency Arbitrator Procedures: What Should a Practice
Note of Best Practices Consider? SCC Online Blog, March 26, 2022 https://
wwwscconlinecom/blog/post/2022/03/26/emergencyarbitration/
 Law commissions report on emergency arbitration in India

Inorder“to recognise emergency arbitrations, The Law Commissions 246th Report 2 on

amendments to the Arbitration and Conciliation Act, 1996, proposed an amendment to Section 2d
of the Act This amendment was to ensure that institutional rules such as the SIAC Arbitration
Rules, or ICC Rules or any other rule which provide for an appointment of an emergency arbitrator
are given statutory recognition” inIndia:

Section 2d“Arbitral tribunalmeans a sole arbitrator or a panel of arbitrators and, in the case of an
arbitration conducted under the rules of an institution providing for appointment of an emergency
arbitrator, includes such emergency arbitratorIt was expected that the Arbitration and Conciliation
Amendment Act, 2015 would embrace this global turn of tide and create provisions for
appointment of Emergency Arbitrator The Amendment of 2015, however, failed to incorporate the
recommendation of the Law Commission and does not provide at all for Emergency Arbitration
Recently, in the case of Amazoncom NV Investment Holdings LLC vs Future Retail Limited
&Ors,4, the Supreme Court observed that the mere fact that a recommendation of a Law
Commission Report was not followed by the Indian Parliament, would not necessarily lead to the
conclusion that the suggestion of the Law Commission can never form part of the interpretation of
the statute The Supreme Court also referred to the Srikrishna Committee Report which laid down
that it is possible to interpret Section 172 of the Act to enforce emergency awards for India seated
arbitrations and recommended that the Act be amended so that it comes in line with international
practice in favour of recognizing and enforcing an emergency award”
 Indias Initiative Towards EA

Notwithstanding the fact that the term Emergency Arbitration is omitted from the amended
Arbitration and Conciliation Amendment Act, a new move has emerged by way of which,
arbitration institutions are trying to absorb the term Emergency Arbitration in their rules and are
making simultaneous procedures thereof Although, the Indian arbitral institutions statutorily are
not cogent enough in realm of an expressly omitted provision, yet they have framed rules which
are by large synonymous to the leading international arbitration institutional rules Even the
Supreme Court has noted in the case of Amazon supra that after a party has participated in an
Emergency Award proceeding having agreed to institutional rules, the party is bound by the award
and it does not lie in the mouth of a party to ignore an Emergency Arbitrators award to state nullity
Some notable institutions with their respective regulations are:

1. Delhi International Arbitration Center DAC5, of the Delhi High Court in Part III of its
Arbitration Rules includes Emergency Arbitration Further Section 18A enumerates Emergency
Arbitrator and further explains the appointment, procedure, time period and powers of an
Emergency Arbitrator

2. Court of Arbitration of the International Chambers of CommerceIndia, under Article 29 of the

Arbitration and ADR Rules r/w Appendix V enumerate the provisions of EA and Emergency
Arbitrator

3. International Commercial Arbitration ICA, under Section 33 r/w Section 363 wef 01012014,
enumerates the provisions of EA and Emergency Arbitrator

4. Madras High Court Arbitration Center MHCAC Rules, 2014, under Part IV, Section 20 read
with Schedule A and Schedule D enumerate the provisions of EA and Emergency Arbitrator

5. Mumbai Center for International Arbitration Rules 2016, under Section 3 wef 15062016
enumerates the provisions of EA and Emergency Arbitrator
 Challenges to emergency arbitration

The“foremost challenge of an emergency arbitration is its recognition and enforceability Many

countries are still in process of recognising the sanctity and binding nature of the order passed by
an emergency arbitrator which gives a preclusive effect whereas a lot of it including its
enforcement depends on which jurisdiction the application for enforcement is filed There may be a
probability that a country might recognise the provision of emergency arbitration and will enforce
the order passed by it but in the same case, any court of different jurisdiction might be incapable to
recognise and enforce the same, due to reason of absence of specific legislation which recognises
the order passed by an emergency arbitration The situation gets much grimmer when an interim
order passed by an emergency arbitrator is unlikely to qualify as an award and the situation
becomes much dicey on how different courts would react to such requests and much likely the
parties who has interim order in his favour would be left at the mercy of the respective courts to
get it enforced Another challenge is that it is interim binding and once the Arbitral Tribunal is
constituted the same is not binding and in case if any other person is appointed as an arbitrator to
the substantive Tribunal, the latter can vary or suspend it, in case the time stipulated for such award
has not expired The form of interim relief can also play a part particularly when interim relief
granted by the emergency arbitrator is in the form of order rather than an awardOne major
particular drawback is that there is no certainty for the consequences of noncompliance of the
order made by the emergency arbitrator Although, Article 292 of the ICC Rules requires the parties
to undertake to comply with any order made by the emergency arbitrator, however, the same is
silent about any consequences of noncompliance thereof Parties who even manage to get interim
orders in their favour would further struggle to get it enforced and will still need to rely on the
support of the courts of that jurisdiction, meaning thereby that they are being virtually dragged into
the litigation which they never intended to do so”
For“instance, in India, the statutory provision relating to emergency arbitration is not clear, as the
Arbitration and Conciliation Act, 19969 the Act for short, is silent about the concept of emergency
arbitration Even if we read Section 21d of the Act which defines an Arbitral Tribunal, goes on to
describe it as a sole arbitrator or a panel of arbitrators It is silent about whether an emergency
arbitrator comes within the definition of the Arbitral Tribunal or not The said has created a very
dicey situation in the minds of the corporate giants who choose the seat of arbitration on basis of
the flexibility of the local laws in adopting international conventions whereas predominantly the
New York Convention More so, when the Act is silent on the recognition of emergency arbitrator it
is very less likely that same can be enforced by the Indian courts”

Landmark Cases in India Reated to Emergency Arbitration

India“takes an auxiliary enforceability approach to an EA order There are few judicial decisions on
emergency arbitration These cases have shown a bright future of approach towards Emergency
Arbitration Some of such cases”are:

• HSBC v Avitel:
The“case involved an arbitration agreement in which the parties reserved their right to seek
interim relief in Indias national courts, notwithstanding the fact that the arbitration was held
outside of India The parties went to the EA in Singapore, where the party seeking to enforce
the order in India received a favourable”ruling

While upholding the Emergency Arbitrators award and granted interim relief, the Bombay
High Court noted that the petitioner has not bypassed any mandatory requirements of
enforceability, because it was not seeking direct implementation of the interim award It is
important to note that the parties entered into the subject agreements prior to the BALCO
judgment, so the ratio decidendi of BALCO did not apply in this case
• Ashwani Minda and Ors v UShin Ltd And Ors:
The“case involved an arbitration agreement governed by the Japan Commercial Arbitration
Association JCAA Rules emergency arbitration provisions The applicants sought to prevent
the Respondents from acquiring shares purchased in an open offer until the dispute was
resolved, and they sought interim relief by filing an EA The emergency arbitrator denied the
applicants request for relief, which prompted them to file a Section 9 application in the
Delhi High Court seeking similar reliefThe Court examined the maintainability of a Section
9 application seeking similar interim relief that had already been denied by the Emergency
Arbitrator and concluded that the Court cannot sit as a Court of appeal to review the order
of the Emergency Arbitrator in an application under Section 9 of the Act The applicants
cannot take a second bite at the cherry after invoking the emergency arbitrator mechanism
and requesting a detailed and reasoned order”

Amazoncom NV Investment Holdings LLC v Future Retail Limited and Others:

This is the most recent case that cleared the status of emergency arbitration and showed its
bright future in India In this case, Amazon sought the interim relief against the Future Retail
through the arbitration agreement between them governed by SIAC rule Amazon applied
for interim relief for a transaction disputes between them under schedule 1 of the SIAC rule
and was successful in obtaining it

Simultaneously, Amazon filed for enforcing a relief under S 17 1 of the Arbitration and
Conciliation Act, 1999 Through this two main issue rose before Apex court, first was
whether the emergency arbitration comes under the ambit the A/C Act, 1999, and second
was whether it can be considered as the order under S 171 of the Act
 • The court while examining both issues scrutinizes the definition of arbitral tribunal
mentioned under S 21 d to check whether it constrains S 171 by allowing only arbitral
tribunal that can give final awards by way of interim or final awards and does not allow an
emergency arbitration

The SC held that S 21 d does not contain emergency arbitration as such but S 2 of the Act
commence with the words unless the context otherwise requires and when it is read with S
21 a provides whether or not permanent arbitral institutions and with S 26 and S 28 of the
Act, it can be said to be clear that interim relief ordered by emergency arbitration comes
under ambit of S 171 of the Act Thus it was cleared by the court that granting interim relief
under emergency arbitration comes under principle of party autonomy

Analysis

There“is significant uncertainty in the law regarding the enforceability of emergency awards in
arbitrations seated outside India The Law Commission of India in its 246th Report had
recommended recognizing the concept of the emergency arbitrator by widening the definition of
arbitral tribunal Under Section 2d of the Act to include an emergency arbitrator However, this
recommendation was not incorporated in the 2015 Amendment ActWhile one could possibly rely
on Section 172 of the Act to enforce emergency awards for arbitrations seated in India, the Delhi
High Court decision in Raffles Case would discourage the same, as the High Court had held in that
case that an emergency award in an arbitration seated outside India is not enforceable in India
Indias approach differs from that of developed arbitration jurisdictions such as Singapore and
Hong Kong which have recognized the enforceability of orders given by an emergency arbitrator”
Given“that international practice is in favor of enforcing emergency awards Singapore, Hong
Kong, and the United Kingdom all permit enforcement of emergency awards, it is time that India
permitted the enforcement of emergency awards in all arbitral proceedings This would also provide
legislative support to the Rules of arbitral institutions that presently provide for emergency
arbitrators13 For this purpose, the recommendation made by the Law Commission of India in its
246th Report may be adoptedThat the Supreme Court has shown muchneeded enthusiasm towards
upholding the instrumental rules which include orders passed by an emergency arbitrator and such
orders are referable to inasmuch can be made under Section 171 of the Act The holistic approach
adopted by the Supreme Court would further robust the arbitration mechanism in India and
needless to say that the same would enlighten Indias prospect towards becoming an international
arbitration hub It would certainly help India in making a big leap in following international comity
in the field of international arbitration and would also stand the test of minimum judicial
intervention in respect of the arbitration proceedings, which was envisaged in Article 5 of the
UNCITRAL Model Law on International Commercial Arbitration and also incorporated in the
form of Section 5 of the Act17 Moreover, in the present conditions, what works as icing on the
cake is that the recognition and thus enforcing of such orders will certainly decongest the Indian
courts which are already neckdeep in work However, whatever herein is said, does come with a
caveat, that is, arbitration mechanism only offers an alternative option to litigation wherein it is
intended only to supplement and not supplant the legal system enshrined in the Constitution A
perfect example would be that of Belgium which in 1985, in an attempt to make the country
arbitration friendly inasmuch the preferred seat for international arbitrations, provided that a
nonBelgian citizen who had no business in Belgium would not be permitted to apply to a Belgium
court to set aside an arbitral award It was believed and was done under the impression that with no
judicial review of the award in Belgium, parties especially international parties, would be attracted
to choose Belgium as a seat for arbitration However, the reality was to the contrary, wherein
nobody opted for Belgium for the seat of arbitration, which can be mainly attributed to the reason
of lack of possible court review18Thus, this analysis, clearly suggests that even parties in
international arbitration prefer court supervision at the place of arbitration”
 Conclusion

It“may, however, be clarified that Indian courts cannot be completely usurped of their power to
grant interim relief, owing to the availability of a remedy before an emergency arbitrator Such an
interpretation may not be consistent with the Act In fact, most institutional arbitral rules, including
the LCIA Rules which were amended subsequent to the decision in Gerald Metals, themselves
provide that emergency arbitration provisions do not prevent, substitute or impliedly waive the
rights of parties to apply to a competent state court for any interim or conservatory measures
SeeArticle 913, LCIA Rules; Rule 303, SIAC Rules; Article 297, ICC Rules Therefore, an
interpretation consistent with section 9 of the Act, as well as institutional arbitral rules, would be
that while the power under section 9 to grant interim relief remains unhindered, Indian courts
should accord primacy to the timely and effective interim remedy available to parties through
emergency arbitration This approach would also serve the purpose of decongesting clogged court
systems, which, as noted in the Amazon Case, is the underlying intention of sections 93 and 17 of
the Act”
 Bibliography

1. Emergency arbitration in India : A critical appraisal of the institutional framework Abhinav

Gupta & Sriroopa Neogi

2. Emergency arbitration and India a long overdue friendship by Akash Srivastav

3. Emergency Arbitration: An Approach Towards the Advancement: Ms Shivangi Sinha*, Dr

Jyoti Dharm

4. Emergency Arbitration By Cameron Sim

5. Interim and Emergency Relief in International Arbitration