Introduction
Emergency Arbitration, a relatively newer and developing concept in Arbitration laws of our country, as a prominent apparatus for parties in disputes to secure reliefs. It allows a disputing party to seek relief before the constitution of a formal arbitration tribunal. However, the Arbitration and Conciliation Act, 1996 does not enshrine any provisions of Emergency Arbitration. Traditionally, parties in dispute, seeking urgent measures to protect their rights had to rely on state courts or wait until an arbitral tribunal was fully established, which often caused major delays and risk of irreparable harm. Emergency arbitration has emerged as a mechanism to fill this lacuna, enabling parties to obtain prompt and effective interim relief through an emergency arbitrator appointed expeditiously.
Explore More: Litigation Law Firm in India
Historic Foundation Of Emergency Arbitration
The roots of emergency arbitration are derived from back in the early 1990s. The Court of Arbitration of the International Chamber of Commerce (ICC) laid down Pre-Arbitral Referee Procedures in 1990, which were optional and required parties to opt-in. However, these procedures did not globally rise to prominence.
A landmark evolution came with the International Centre for Dispute Resolution (ICDR), the international division of the American Arbitration Association, in 2006. The ICDR assimilated emergency arbitration as a default provision, thus making the emergency arbitrator apparatus accessible unless expressly opted out. Following this, other major international arbitral institutions, including the Singapore International Arbitration Centre (SIAC), Arbitration Institute of the Stockholm Chamber of Commerce (SCC), the London Court of International Arbitration (LCIA), and the ICC, adopted consistent provisions. This made Emergency Arbitration a recognized norm in international arbitration, evolving rapidly over the last two decades.
The Indian Arbitration and Conciliation Act, 1996, does not entail any provision for emergency arbitration thus creating a blank space, which is not being fulfilled by judicial precedents, as discussed hereinafter. This has created a lacuna regarding the enforceability of emergency arbitrator awards and the procedural legitimacy of Emergency Arbitration in Indian-seated arbitrations.
Distinguishing Emergency Arbitration From Urgent Interim Relief Under S. 9 Of A&C Act
Emergency Arbitration and urgent interim relief under Section 9 of the Indian Arbitration and Conciliation Act cater different needs in Indian arbitration practice. EA provides a swift and confidential process through an emergency arbitrator who can grant urgent relief before the arbitral tribunal is constituted, making it ideal for international disputes with high urgency. However, EA's enforceability in India is uncertain due to the lack of express provisions in the statute, although the Supreme Court has recognized its interim nature in select cases. In contrast, Section 9 relief is granted by Indian courts and is fully enforceable as court orders, though often slower due to procedural delays and the public nature of court proceedings. Practically, parties opt for Section 9 for reliable enforcement within India, while EA is increasingly used for speedy relief in international arbitration settings where confidentiality and quick decisions are key, owing to the lack of statutory backing. The choice between them depends majorly on the dispute's seat, urgency, and enforceability requirements.
Landmark Judicial Precedents
1. Amazon. com NV Investment Holdings LLC v. Future
Retail Limited & Ors.
Amazon.com NV Investment Holdings LLC initiated emergency
arbitration proceedings under the Singapore International
Arbitration Centre Rules for an injunction against Future Retail
Limited, and the Emergency Arbitrator awarded interim protection in
Amazon's favor. Amazon later applied to enforce this emergency
award in India, treating it as an order under Section 17(2) of the
Arbitration and Conciliation Act. The Supreme Court clarified that
emergency arbitral awards made in India-seated arbitrations are
enforceable as interim orders under Section 17(1) and thus have
statutory backing for enforcement under Section 17(2).
2. Raffles Design International India Private Limited v. Educomp Professional Education Limited
The High Court of Delhi held that since the emergency award was passed by a foreign-seated arbitral tribunal, it was not enforceable under the Indian Arbitration Act. The Act does not include provisions for the enforcement of emergency awards granted by tribunals seated outside India. The Court emphasized that the only recourse available to enforce such foreign-seated emergency awards in India was to seek interim relief afresh under Section 9 of the Act. It ruled that a party is not precluded from approaching court for protection even after obtaining an emergency order abroad, but the enforcement of the foreign emergency award itself cannot be recognized by Indian courts.
3. Mr. Ashwani Minda & Anr vs U-Shin Ltd & Anr
In this case, the Delhi High Court held that in the event that the party in dispute fails to secure an interim relief from an emergency arbitrator, they cannot try to procure the same relief from the courts under the Section 9 of the arbitration and conciliation act. The court said, in Para 32 that "Distinguishing the decision of this Court in Raffles (supra), learned senior counsel submits that the decision does not aid the Applicants as the Applicant in the said case was a party who had succeeded in obtaining a favourable order from the Emergency Arbitrator and was only seeking enforcement of the same by way of a petition under Section 9 of the Act. The entire decision centered around whether there can be enforcement of an Emergency Arbitrator's order under Section 9 of the Act and the observations regarding independently considering the relief was only in that context. In the present case, the Applicants have lost and cannot seek the same relief again in a second Forum."
Execution Of Emergency Arbitration Awards
Emergency arbitration awards in India are prominently enforced under Sections 17(1) and 17(2) of the Arbitration and Conciliation Act, 1996. Although the Act does not expressly mention emergency arbitrators, the Supreme Court of India in the landmark judgment of Amazon.com NV Investment Holdings LLC v. Future Retail Ltd.(Supra) held that an order or award passed by an emergency arbitrator in an India-seated arbitration is enforceable as an interim order under Section 17(1), and the courts can enforce such orders under Section 17(2) of the Act. The Court gave emphasis on party autonomy, recognizing that parties' adoption of institutional arbitration rules implicitly authorizes the emergency arbitrator to grant interim measures, thereby making their orders binding. Furthermore, it was ruled that no further appeal lies under Section 37 of the Act against an order passed by the Emergency Arbitrator, and such order is binding in nature.
Conclusion
The Indian Arbitration & Conciliation Act does not enshrine any provisions regarding Emergency Arbitration. However, the Supreme Court has made a significant ruling which now enables the parties in dispute to seek enforcement of Emergency Arbitration awards. Presently, this position is limited to Indian-seated arbitration, and the foreign seated arbitration awards seek recourse through the Section 9 of the Act, which creates a caveat in streamlining the process of enforcement of Emergency Arbitration awards.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
