(i) In view of the extensive preparations made for the hearing of the expert witnesses from 05th January to 08th January, 2022, the Arbitral Tribunal does not consider it correct to abandon the said hearing for hearing the termination applications filed on behalf of the petitioners.
(ii) It is not clear whether or not the order dated 17th December, 2021 of the Competition Commission of India (CCI) is appealable and hence, cannot form the basis for termination of the arbitration proceedings.
(iii) In view of the strength of the legal team of the parties and the fact that the aforesaid dates in January, 2022 were fixed long time back, there is no reason to adjourn the said hearings.
(iv) The issue as to when to hear the termination applications is an issue of case management and therefore, the Arbitral Tribunal has the full discretion to decide when to hear the said applications.
(i) The Arbitral Tribunal has not taken any decision with regard to implications of the CCI order on the continuation of the said arbitration. What was expressed in the impugned order dated 29th December, 2021 was only the preliminary view of the Arbitral Tribunal so that the parties can address submissions accordingly.
(ii) It was noted that the Arbitral Tribunal will give reasonable opportunity to all the parties to present their submissions on the matter of implication of the CCI order on the arbitration proceedings.
(iii) In view of the parties being asked to file their written submissions in support of their respective contentions in respect of the termination applications, one day for hearing would be sufficient for the oral submission of the parties.
(iv) Dates for hearing of the expert witnesses in January, 2022 were agreed by the parties until just before Christmas i.e., 25th December, 2021.
(v) No prejudice would be caused to the petitioners if the hearing on the termination applications be conducted after the hearing on the parties' expert witnesses on damages.
(vi) If the petitioners are successful in their request for termination of arbitration, the option to claim costs would also be available for them.
(vii) The Arbitral Tribunal had offered to hear the termination applications on 04th January, 2022 by adding an extra day. However, since the lead counsel of FRL was not available on the said date, the hearing could not be scheduled on 04th January, 2022.
(viii) An endeavour would be made to find dates before May, 2022 for hearing on the termination applications.
(i) The application filed by the FCPL under Section 32(2)(c) of the Arbitration and Conciliation Act, 1996 [hereinafter 'Arbitration and Conciliation Act'] goes to the very root of the matter and therefore, ought to be decided at the outset without further continuing with the arbitration proceedings. In the event that the termination applications are allowed, there would be no requirement for proceeding with the hearing of the expert witnesses.
(ii) The said application is not based on a mere averment but is in fact based on an order dated 17th December, 2021 passed by a statutory authority, CCI, in terms of which the earlier approval granted by the CCI in respect of the agreement between FCPL and Amazon has been kept in abeyance as the same was held to be obtained by fraud and costs of Rs.2,00,00,00,000/- were imposed on Amazon.
(iii) In light of the aforesaid order passed by the CCI, the agreement itself between Amazon and FCPL, which contains the arbitration clause, would not survive and therefore, the arbitration proceedings have to be terminated.
(iv) One day may not be sufficient for hearing the termination applications, as culled out by the Arbitral Tribunal.
(i) The Arbitral Tribunal has consistently violated the principle of equal opportunities as mandated in Section 18 of the Arbitration and Conciliation Act.
(ii) The Arbitral Tribunal has itself, in its email dated 22nd December, 2021, noted that the expert reports filed on behalf of the claimant are not backed by any pleadings or submissions on legal principles and had therefore, directed the claimant to file a short synopsis on the applicable legal principles for violation of the losses allegedly suffered by the claimant as a result of various breaches of the contract committed by the respondents. Amazon was directed to file the said submissions by 28th December, 2021 and FRL was directed to file its reply by 01st January, 2022.
(iii) The law firm representing FRL had brought to the attention of the Arbitral Tribunal that some lawyers of their firm working on the present matter have tested positive for COVID-19. Therefore, the Arbitral Tribunal was requested to defer the hearing of the expert witnesses, as scheduled for the month of January, 2022 and instead take up the termination application filed on behalf of the petitioner for hearing on the said dates. In this regard, reference is made to the emails dated 28th December, 2021 and 31st December, 2021 sent by lawyers of FRL to the Arbitral Tribunal.
(iv) Hearing of the expert witnesses scheduled for 05th to 08th January, 2022 be adjourned and instead the aforesaid dates be utilized for hearing on the termination applications filed on behalf of both the petitioners.
(i) The present petitions under Article 227 of the Constitution of India are not maintainable.
(ii) The present petitions have been filed only to delay the on-going arbitration proceedings between the parties.
(iii) The reports of the two experts were filed as far back as on 09th and 10th October, 2021 and so, there was ample time for the petitioners to prepare for the cross-examination.
(iv) The dates in January, 2022 for hearing of the expert witness were fixed as far back as on 13th October, 2021.
(v) The experts from both sides, scheduled to appear on the said dates in January, 2022, would be from different parts of the world and therefore, it would cause a lot of inconvenience if the aforesaid scheduled dates are cancelled/postponed.
(vi) The Arbitral Tribunal has, throughout, been accommodative towards various requests made by the petitioners and therefore, it is wrong to state that equal opportunity has not been provided to the petitioners. The Arbitral Tribunal was willing to hear the termination applications on 04th January, 2022 itself, before the dates for hearing of expert witnesses. However, the same could not be scheduled on account of non-availability of the lead counsel for FRL.
(vii) The date for hearing on the termination applications has been fixed on 08th January, 2022 so as to give sufficient time for the parties to file written submissions.
(viii) The Arbitral Tribunal has the full discretion to decide upon the procedural aspects of the arbitration.
(i) The grievance of FCPL stands redressed with the subsequent email dated 01st January, 2022, wherein the date of 08th January, 2022 has been fixed for oral hearing on the termination applications. Amazon has already filed its reply on merits on 29th December, 2021 to the application for termination.
(ii) Substantial progress has already been made in the arbitration proceedings and bulk of hearings have already been completed.
(iii) The hearing schedule in January, 2022 in respect of the expert witnesses, is to determine the quantum of damages, which is the alternate relief claimed in the arbitration proceedings by Amazon.
3. The current position is that, despite the Tribunal's previous offers to accommodate each Party's demands, we have not reached consensus owing to various factors which are apparent from the correspondence. Hence the Tribunal's current position remains as stated in (i) Procedural Order No. 6 dated 14 November 2021, (ii) Procedural Order No. 7 dated 20 December 2021, and (iii) the Tribunal's email of 29 December 2021, which still bind the Parties to appear for the Experts Hearing from 5 to 8 January 2022.
4. That said, the Tribunal is prepared to try and accommodate to the extent possible the concerns of each Party, and makes the following proposal for consideration.
4.1 The Tribunal will set aside one day of the 4-day hearing to receive oral submissions on the Termination Applications, and that day will be Saturday, 8 January 2022.
4.2 The choice of 8 January 2022 for this oral hearing is to enable the Parties to make written submissions in advance of the oral hearing. Respondent No. 2 and Majority Respondents shall file and serve their respective submissions by 7 pm IST on Tuesday, 4 January 2022, and Claimant shall file its submissions by 7 pm IST on Thursday, 6 January 2022.
4.3 If, at the end of the hearing on 8 January 2022, the Tribunal is persuaded that further submissions on the Termination Applications would assist it in reaching its decision, the Tribunal may either order further written submissions to be filed or find another day for further oral submissions after hearing the Parties.
4.4 The remaining 3 days (i.e. 5 to 7 January 2022) will be dedicated to the Experts Hearing, with some modifications in the hearing procedures previously discussed."
"7. The Tribunal does not consider it appropriate to address at this stage Respondent No. 2's assertions regarding the admissibility of Claimant's damages evidence. These matters will be addressed in the Tribunal's award, as required. However, the Tribunal would briefly note as a general observation that the contents of pleadings are a matter of discretion for counsel drafting those pleadings. If opposing counsel considers that the pleadings as drafted are objectionable for any reason, it is open to opposing counsel to make appropriate applications. In the present case, the Tribunal does not recall any applications by any Counsel for Claimant to supplement or clarify its pleadings. It was the Tribunal which was having difficulty in understanding Claimant's expert reports without the benefit of having had Claimant's approach to relief as a whole sufficiently clarified. Accordingly, the Tribunal made its PO 8 on 22 December 2021 to direct a supplementary submission on applicable legal principles for the valuation of the losses suffered by Claimant as a result of the various Respondents' alleged breaches of contract. The Tribunal would also note that Respondents did not object to this procedure at the time. The Tribunal may add that, in arbitration, pleadings have less significance than in litigation: what matters is that both parties are made reasonably aware of the opposing party's case in order to have a proper opportunity of meeting that case. Whether the information about Claimant's case on relief is given by way of pleading or by an oral submission (in an opening statement), or in written submissions before the evidentiary hearing, is not a material issue. What matters is the adequacy of the information provided to ensure that the Tribunal is made aware of all the necessary information and arguments on both sides to arrive at a properly informed decision."
"5. Extent of judicial intervention.—Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part."
"16. Most significant of all is the non obstante clause contained in Section 5 which states that notwithstanding anything contained in any other law, in matters that arise under Part I of the Arbitration Act, no judicial authority shall intervene except where so provided in this Part. Section 37 grants a constricted right of first appeal against certain judgments and orders and no others. Further, the statutory mandate also provides for one bite at the cherry, and interdicts a second appeal being filed [see Section 37(2) of the Act].
17. This being the case, there is no doubt whatsoever that if petitions were to be filed under Articles 226/227 of the Constitution against orders passed in appeals under Section 37, the entire arbitral process would be derailed and would not come to fruition for many years. At the same time, we cannot forget that Article 227 is a constitutional provision which remains untouched by the non obstante clause of Section 5 of the Act. In these circumstances, what is important to note is that though petitions can be filed under Article 227 against judgments allowing or dismissing first appeals under Section 37 of the Act, yet the High Court would be extremely circumspect in interfering with the same, taking into account the statutory policy as adumbrated by us hereinabove so that interference is restricted to orders that are passed which are patently lacking in inherent jurisdiction."
"19. Determination of rules of procedure.—
(1) The arbitral tribunal shall not be bound by the Code of Civil Procedure, 1908 (5 of 1908) or the Indian Evidence Act, 1872 (1 of 1872).
(2) Subject to this Part, the parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting its proceedings.
(3) Failing any agreement referred to in sub-section (2), the arbitral tribunal may, subject to this Part, conduct the proceedings in the manner it considers appropriate.
(4) The power of the arbitral tribunal under sub-section (3) includes the power to determine the admissibility, relevance, materiality and weight of any evidence."
"19. There is nothing in the Act to contra indicate the existence of jurisdiction/power in the Tribunal to require the parties to produce documents, exhibits or other evidence, as the Arbitral Tribunal may determine. The aforesaid provision has the effect of vesting the Tribunal with much greater autonomy in the matter of regulating its procedure for conduct of the arbitration proceedings, than that exercised by a civil court - which is bound by the rigour of the Code of Civil Procedure (CPC) and the Indian Evidence Act. The scheme contained in Section 19 of the Act is not to denude the Arbitral Tribunal of its power to regulate its procedure for effective and expeditious conduct of the arbitration proceedings in a transparent and fair manner. On the contrary, the legislative intent appears to be vest the Arbitral Tribunal with autonomy and flexibility in the matter of conduct of its proceedings so as to expedite the proceedings and cut the procedural wrangles witnessed in courts -which are governed by the CPC and the Evidence Act.
20. The procedure that the Tribunal may adopt for conducting the proceedings need not be evolved by consensus of the parties. It is for the Tribunal to devise its own procedure, if the parties have themselves not evolved the procedure consensually under Section 19(2)."
"25. A perusal of the above-mentioned decisions, shows that the following principles are well settled, in respect of the scope of interference under Article 226/227 in challenges to orders by an arbitral tribunal including orders passed under Section 16 of the Act.
(i) An arbitral tribunal is a tribunal against which a petition under Article 226/227 would be maintainable;
(ii) The non-obstante clause in section 5 of the Act does not apply in respect of exercise of powers under Article 227 which is a Constitutional provision;
(iii) For interference under Article 226/227, there have to be 'exceptional circumstances';
(iv) Though interference is permissible, unless and until the order is so perverse that it is patently lacking in inherent jurisdiction, the writ court would not interfere;
(v) Interference is permissible only if the order is completely perverse i.e., that the perversity must stare in the face;
(vi) High Courts ought to discourage litigation which necessarily interfere with the arbitral process;
(vii) Excessive judicial interference in the arbitral process is not encouraged;
(viii) It is prudent not to exercise jurisdiction under Article 226/227;
(ix) The power should be exercised in 'exceptional rarity' or if there is 'bad faith' which is shown;
(x) Efficiency of the arbitral process ought not to be allowed to diminish and hence interdicting the arbitral process should be completely avoided."
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