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Who is an emergency arbitrator in Singapore International Arbitration Centre (SIAC)? 

GS Paper 2

Topics Covered: Important International institutions, agencies and fora, their structure, mandate. 

 

Context: 

The Supreme Court has ruled in favour of e-commerce giant Amazon against the proposed ₹24,713 crore merger deal between Future Retail Limited (FRL) and Reliance Retail. 

  • The court has also upheld the validity and enforceability of a Singapore-based Emergency Arbitrator (EA) award (October 2020 award), which restrained FRL, India’s second largest offline retailer, from going ahead with the disputed transaction. 

 

What’s the issue? 

(Note: just have a brief overview of the case. No details are necessary about the case from the exam’s perspective). 

Future Group and Reliance Industries Limited had signed a Rs 24,713-crore deal in August 2020 for Future Retail to sell its retail, wholesale, logistics and warehousing units to Reliance Retail and Fashionstyle. 

  • Amazon is Future Group’s Indian partner. 
  • Amazon says Future violated a partnership contract with the asset sale to its rival and wants to scuttle it, while the indebted Indian group says it would collapse if the transaction fails. 

 

What has the Supreme Court ruled? 

The award by Emergency Arbitrator in SIAC is “exactly like an order of an arbitral tribunal” contemplated under Section 17 of the Arbitration and Conciliation Act, 1996 Act Hence, an award by the EA was like an order under Section 17(1) (interim measures ordered by an arbitral tribunal) of the Act. 

  • Therefore, no appeal would lie under Section 37 of the Arbitration Act against an order of enforcement of an Emergency Arbitrator’s order. 

 

Why did Amazon approach SIAC?

The parties in a deal usually sign a contractual agreement which specifies about:

  1. The arbitral institution administering the arbitration.
  2. The applicable rules.
  3. The seat of arbitration.

In this case Amazon and Future Group have under their agreement agreed to refer their disputes to SIAC, with Singapore presumably being the contractual choice for the seat/place of arbitration.

 

How is the dispute taken up at the SIAC? What is the procedure to be followed?

Once a dispute is referred to arbitration, the process of appointment of the arbitral tribunal takes place.

Composition: Typically, in case of a three member tribunal, both the parties appoint one member each to the tribunal, while the third member is jointly appointed by the two nominees or, if they fail to agree, by SIAC.

 

Appointment of an Emergency Arbitrator:

Appointment of the arbitral tribunal usually takes time.

  • Therefore, under the rules of SIAC, parties can move SIAC to appoint an emergency arbitrator to get urgent interim relief, even as the process of appointment of the main arbitral tribunal is underway.

 

What happens when the parties don’t comply with the order voluntarily?

Currently under Indian law, there is no express mechanism for enforcement of the orders of the Emergency Arbitrator.

But, the parties voluntarily comply with the Emergency Award.

  • However, if the parties don’t comply with the order voluntarily, then the party which has won the emergency award, in this case Amazon, can move the High Court in India under Section 9 of the Arbitration & Conciliation Act, 1996, to get similar reliefs as granted by the Emergency Arbitrator.

 

Why has Singapore become the hub of international arbitration?

  • Foreign investors investing in India typically want to avoid the rigmarole of the Indian courts.
  • Foreign investors feel that Singapore is neutral ground for dispute resolution.
  • Singapore itself over time has built a stellar reputation as jurisdiction driven by rule of law with international standards and high integrity. This gives comfort to investors that the arbitration process will be quick, fair and just”.

According to the 2019 annual report of SIAC, India was the top user of its arbitration seat with 485 cases being referred to SIAC, followed by Philippines at 122, China at 76 and the United States at 65.

 

Does India has any international arbitration centre?

Yes. India now has its own international arbitration centre in Mumbai.

 

About Singapore International Arbitration Centre (SIAC):

It is a not-for-profit international arbitration organisation based in Singapore, which administers arbitrations under its own rules of arbitration and the United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules.

 

Insta Curious: 

Do you know about the UN Convention on International Settlement Agreements? Reference 

 

InstaLinks:

Prelims Link:

  1. What is Arbitration?
  2. About SIAC.
  3. Overview of the Arbitration & Conciliation Act, 1996.
  4. About UNCITRAL.

Mains Link:

Discuss why has Singapore become the hub of international arbitration?

Sources: the Hindu.