The Supreme Court of India on Friday upheld an order of the Singapore International Arbitration Centre (SIAC) as legally enforceable in India, effectively blocking the sale of Future Group (“Future”) to Reliance Industries Limited (“Reliance”).

The sale was part of a ₹247.3 billion (US$3.4 billion) acquisition deal between Future and Reliance. Amazon initiated the emergency arbitration in October challenging the acquisition deal between Reliance and Future, alleging that Future breached the terms of a mutual agreement by proceeding to announce the asset sale deal with Reliance.

The SIAC emergency arbitrator temporarily blocked the deal the same month but Reliance and Future ignored the arbitrator’s ruling as not binding stating that the matter “will have to be tested” under the laws of India.

This arbitrator’s ruling was initially upheld in February by Judge Midha of the Delhi High Court as enforceable in India, but the Division Bench of the Delhi High Court overturned Judge Midha’s holding within days.

This formed the basis for Amazon’s appeal to the Supreme Court, which argued that the Division Bench lacked jurisdiction and that its order is “illegal” and “arbitrary.” Amazon further contended that the company would face “irreparable harm” if the Division Bench order is not stayed by the top court.

The Supreme Court primary dwelled on two questions of law: whether the emergency arbitrator’s award is valid under § 17(1) of the Arbitration and Conciliation Act of 1996 (“the Act”) and (ii) whether Judge Midha’s order enforcing the arbitration award can be appealed under § 37(2) the Act.

The first question concerns party autonomy in the scheme of the Act. Full party autonomy is given by the Act to have a dispute decided in accordance with institutional rules which include emergency arbitration. Thus, the Court held that the emergency arbitrator’s award is valid under § 17(1) of the Act.

As to the second question, the Court stated that § 37 is a complete code in respect of appeals from orders and awards made under the Act. Absent a provision for appeal stemming from enforcement proceedings, an appeal only lies from interim measures defined under § 17(1)(i) and 17(1)(ii).

Since such measure are inapplicable here, the Court held “no appeal lies under Section 37 of the Arbitration Act against an order of enforcement of an Emergency Arbitrator’s order made under Section 17(2) of the Act.”

The judgment is considered a major setback for Reliance and its Chairman and Managing director, Mukesh Ambani, and simultaneously a major victory for Amazon. The judgment is being looked upon favourably by legal commentators, particularly in relation to the enforceability of institutional and emergency arbitration rulings in India.