Abstract
Emergency Arbitration (EA) is a fast-developing mechanism in international commercial arbitration that aims to grant interim relief prior to the constitution of an arbitral tribunal. While well-known and in active use by prominent international arbitration centers such as SIAC, ICC, and LCIA, the notion has experienced slow and uneven adoption within India. This paper examines the Indian law position on emergency arbitration, critically evaluates milestone judgements such as Amazon v. Future Retail, and charters a future course to full statutory recognition of emergency awards.
Introduction
In cross-border and high-value commercial disputes, parties may need immediate interim relief — to freeze assets, maintain evidence, or avoid irreparable damage. Historically, such relief had to be obtained through national courts. But contemporary arbitration practice has seen the institution of Emergency Arbitration, which allows parties to obtain interim relief from an emergency arbitrator before the constitution of the arbitral tribunal in full.
Although the Arbitration and Conciliation Act, 1996 does not refer to emergency arbitration by name, India’s growing involvement in global trade has forced the judiciary to recognize it. The changing judicial response and rules of institutional arbitration are finally bridging the gap, but statutory recognition is still needed.
What is Emergency Arbitration?
Emergency Arbitration is a procedure under which, prior to the constitution of the arbitral tribunal, a party may seek interim relief in urgent cases to secure its rights or preserve the status quo. The device is accepted in the rules of procedure of international arbitration centers such as:
- Singapore International Arbitration Centre (SIAC)
- International Chamber of Commerce (ICC)
- London Court of International Arbitration (LCIA)
- American Arbitration Association (AAA-ICDR)
These provisions enable the selection of an emergency arbitrator within a couple of days, whose award (usually referred to as an “emergency award” or “interim order”) becomes binding on the parties.
The Indian Legal Position: Silence in Statute, Recognition in Practice The Indian Arbitration and Conciliation Act, 1996, as it stands today, does not expressly recognize emergency arbitrators or their decisions. Part I of the Act permits parties to approach courts under Section 9 for interim measures. Section 17 allows the arbitral tribunal to grant interim relief, but only after it is constituted.
This legislative lacuna raised questions — are emergency awards binding in India? Can they be regarded as equivalent to awards under Section 17?
Amazon.com NV Investment Holdings LLC v. Future Retail Ltd. (2021) The breakthrough arrived in Amazon.com v. Future Retail, a much-hyped case that placed emergency arbitration at the forefront of Indian arbitration law.
Facts:
Amazon, an American company, had invested in Future Coupons Ltd., which involved a shareholder agreement having a SIAC arbitration clause. When Future Retail entered into an agreement with Reliance, Amazon alleged the deal breached the agreement and approached SIAC for interim relief through an emergency arbitrator.
The emergency arbitrator issued an injunction against the Future-Reliance transaction. Amazon moved for enforcement of the award in India. Future Retail contended that such an award was not a part of Indian law.
Supreme Court’s Judgment:
The Supreme Court, in a milestone judgment, held that:
- An emergency award issued under SIAC rules can be enforced in India pursuant to Section 17(1) of the Arbitration and Conciliation Act.
- Indian parties are under obligation to their contract to institutional rules permitting emergency arbitration.
- The fact that there is no express reference to emergency arbitration under Indian law does not render such awards unenforceable.
- This decision was a turning point for emergency arbitration in India, heralding judicial receptivity irrespective of legislative silence.
The Need for Legislative Reform
Although the Supreme Court judgment in Amazon v. Future Retail does lend judicial support, the lack of statutory acceptance continues to leave room for doubt. Parties are left to question:
- Whether such recognition shall extend to all institutional arbitrations.
- Whether the domestic arbitrations seated in India can avail themselves of emergency arbitration.
- What is to be done when interim relief is desired in non-institutional rule arbitrations.
While progressive, the 2015 and 2019 Amendments to the Arbitration Act did not explicitly deal with emergency arbitration. A clear legislative amendment acknowledging emergency arbitrators and making their awards comparable to tribunal-granted interim orders would put things in line and make them enforceable.
Comparative Jurisdictions
There are a number of jurisdictions across the world that have already
legislatively embraced emergency arbitration. For instance:
- Singapore legislated its International Arbitration Act to include recognition of emergency arbitrators.
- Hong Kong and New Zealand statutorily support emergency awards.
- The United Kingdom and United States, via firm pro-enforcement judicial mindsets, consider emergency awards binding.
- India should do the same to become a credible and competitive international arbitration center.
Conclusion
Emergency Arbitration is an indication of the increasing need for quick and efficacious interim relief in arbitration proceedings. Time-sensitive commercial disputes, driven by globalization, need mechanisms that circumvent the time lags of court processes. The Amazon-Future Retail judgment was a huge leap, setting up the principle that emergency awards ordered under institutional rules are enforceable as decrees in India.
But, to remove ambiguity and bring certainty, India needs to now make the final move — enacting emergency arbitration in its arbitration law. This would bolster India’s reputation as a modern arbitration hub and render it an opting-in seat for domestic and international arbitration.
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