25 January 2022, Tuesday

1 year ago

A High Court exercising powers under Article 227 of the Constitution cannot dictate the procedure of conducting arbitration: the Delhi High Court

04 January 2022 | Future Retail Ltd. v. Amazon.Com NV Investment Holdings LLC and others | CM (M) 02 of 2022 | Amit Bansal J | Delhi High Court | Order and arbitration proceedings stayed in appeal in LPAs 6/2022 & 7/2022

A single judge of the Delhi High Court ruled that the arbitral tribunal’s procedural orders could not be challenged in a petition under Article 227 of the Constitution of India.

The court was hearing a petition in the widely reported Amazon—Future—Reliance litigation that had challenged some orders of the tribunal. Future and Reliance wanted the tribunal to hear an application to terminate the arbitration proceedings. However, the tribunal was going to attend to others pre-scheduled items first (hearing expert testimony) before hearing the termination application. The Article 227 petition was on the footing that the arbitration agreement did not survive any longer because the Indian competition regulator suspended an approval granted earlier to the Future-Amazon deal.

The court examined the arguments and noted the tribunal was going to hear the termination application following the timetable set by it. It ruled that in the exercise of jurisdiction under Article 227, the court cannot dictate to a duly constituted arbitral tribunal the manner and the procedure of carrying out the arbitration proceedings.

The interested reader would note that on 28 November 2019, the Competition Commission of India (“CCI”) had approved the “Combination” under Section 31(1) of the Competition Act, 2002 after arriving at the opinion that the Combination is not likely to cause any appreciable adverse effect on competition in India. Later, on Future’s complaint, CCI found that Amazon, in a deliberate design, had failed in its obligations to notify the transaction appropriately, and it suppressed the actual purpose and particulars of the combination. Therefore, by order of 17 December 2021, the CCI directed Amazon to give fresh notice to examine the combination afresh. Till then, the approval granted earlier has been put in abeyance. The CCI also imposed on Amazon a penalty of INR 202 crores.

Read the decision here.


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