TMI Blog2022 (2) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... al justice is the sworn enemy of unfairness. It is expected of the Courts to be cautious and afford a reasonable opportunity to parties, especially in commercial matters having a serious impact on the economy and employment of thousands of people. Coming to the facts herein, the opportunity provided to the appellants herein was insufficient, and cannot be upheld in the eyes of law - Whenever an order is struck down as invalid being in violation of the principles of natural justice, there is no final decision of the case and fresh proceedings are left open. All that is done is to vacate the order assailed by virtue of its inherent defect. Such proceedings are not terminated and are usually remitted back. The contempt of a civil nature can be made out under Order XXXIX Rule 2A CPC not when there has been mere disobedience , but only when there has been wilful disobedience . The allegation of wilful disobedience being in the nature of criminal liability, the same has to be proved to the satisfaction of the court that the disobedience was not mere disobedience but wilful and conscious . A disconcerting aspect wherein the interim order enforcing the Emergency Award has adop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties resolved to settle their disputes in accordance with the Arbitration Rules of the Singapore International Arbitration Center (SIAC). The parties had further resolved to have the seats at New Delhi. 4. On 12.08.2019, FCPL and its promoters entered into a Shareholder Agreement with Future Retail Limited (FRL). Through this Agreement, FCPL was granted certain protective rights. One such right is produced as under: Clause 10 of SHA: 10. TRANSFER OF RETAIL ASSETS 10.1 As of the Execution Date, the Company has set up an aggregate of at least 1,534 (one thousand five hundred and thirty four) retail outlets/formats including without limitation the Small Store formats across India and such retail outlets/stores are an integral part of the business conducted by the Company representing a significant and substantial part of the business conducted by the Company. The Existing Shareholders and the Company further agree, covenant and undertake to FCL that the Company shall be the sole vehicle for the conduct of such current business comprising of a widespread network of the retail outlets/formats including without limitation the Small Store formats that the Compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... low: Order of Emergency Arbitrator dated 25.10.2020 Order of Single Judge Bench in I.A. No. 10376 of 2020 in CS(COMM) No. 493 of 2020 dated 21.12.2020 285. In the result, I award, direct, and order as follows: (a) the Respondents are injuncted from taking any steps in furtherance or in aid of the Board Resolution made by the Board of Directors or FRL on 29 August 2019 in relation to the Disputed Transaction, including but not limited to filing or pursuing any application before any person, including regulatory bodies or agencies in India, or requesting for approval at any company meeting; (b) the Respondents are injuncted from taking any steps to complete the Disputed Transaction with entities that are part of the MDA Group; (c) without prejudice to the rights of any current Promoter Lenders, the Respondents are injuncted from directly or indirectly taking any steps to transfer/dispose/alienat e/encumber FRL s Retail Assets or the shares held in FRL by the Promoters in any manner without the prior written consent of the Claimant; (d) the Respondents are injuncted from issuing securities of FRL or obtaining/secu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the Indian law permitted in future. Further there may not be irreparable loss to FRL for the reason even if Amazon makes a representation based on incorrect facts thereby using unlawful means, it will be for the statutory authorities/Regulators to apply their mind to the facts and legal issues therein and come to the right conclusion. There is yet another aspect as to why no interim injunction can be granted in the present application for the reason both FRL and Amazon have already made their representations and counter representations to the statutory authorities/regulators and now it is for the Statutory Authorities/Regulators to take a decision thereon. Therefore, this Court finds that no case for grant of interim injunction is made out in favour of the FRL and against Amazon. 13. Consequently, the present application is disposed of, declining the grant of interim injunction as prayed for by FRL, however, the Statutory Authorities/Regulators are directed to take the decision on the applications/objections in accordance with law. 8. In the meanwhile, CCI and SEBI approved the composite Scheme proposed by FRLReliance. Thereafter, FRL filed for s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Arbitrator; the Emergency Arbitrator has rightly proceeded against the respondent No.2; the order dated 25th October, 2020 is not a nullity; the order dated 25th October, 2020 is an order under Section 17(1) of the Arbitration and Conciliation Act. This Court is of the view that the order dated 25th October, 2020 is appealable under Section 37 of the Arbitration and Conciliation Act. This Court is of the clear view that the order dated 25th October, 2020 is enforceable as an order of this Court under Section 17(2) of the Arbitration and Conciliation Act. The detailed reasons shall be given in the reserved order. 9. This Court is satisfied that immediate orders are necessary to protect the rights of the petitioner till the pronouncement of the reserved order. In that view of the matter, the respondents are directed to maintain status quo as on today at 04.50 P.M. till the pronouncement of the reserved order. The respondents are directed to file an affidavit to place on record the actions taken by them after 25th October, 2020 and the present status of all those actions, within 10 days. All the concerned authorities are directed to maintain status quo with respect to all matt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eements as a single integrated transaction does not amount to control of the petitioner over FRL and therefore, the petitioner s investment does not violate any law. 192. All the objections raised by the respondents are hereby rejected with cost of ₹ 20,00,000/to be deposited by the respondents with the Prime Minister Relief Fund for being used for providing COVID vaccination to the Below Poverty Line (BPL) category senior citizens of Delhi. The cost be deposited within a period of two weeks and the receipt be placed on record within one week of the deposit. 193. The respondents have deliberately and wilfully violated the interim order dated 25th October, 2020 and are liable for the consequences enumerated in Order XXXIX Rule 2A of the Code of Civil Procedure. 194. In exercise of power under Order XXXIX Rule 2A(1) of the Code of Civil Procedure, the assets of respondents No.1 to 13 are hereby attached. Respondents No.1 to 13 are directed to file an affidavit of their assets as on today in Form 16A, Appendix E under Order XXI Rule 41(2) of the Code of Civil Procedure within 30 days. Respondent No.1, 2, 12 and 13 are directed to file an additional affidavit in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly to answer the legal questions which arose therein. On a reading of this judgment, the contention of the learned Senior Advocate Mr. Gopal Subramanium, that this Court has upheld the Emergency Arbitrator Award and did not interfere with the enforcement orders in OMP (ENF)(Comm.) No. 17 of 2021, on merits, is not correct. Although, the judgment narrates the facts leading up to the appeal, the Court neither returned any findings on facts, nor adjudicated on merits of the Order passed by Justice Midha in the enforcement proceedings. It is this gap which has led to the current round of litigation on merits of the case for the second time before this Court. 19. In the meanwhile, FRL filed an application under Para 10 of Schedule 1 of the SIAC Rules for vacating the Award of the Emergency Arbitrator before the Arbitral Tribunal. The oral submissions on the vacate petitions were heard between 12th16th of July 2021 and orders were reserved. 20. Contemporaneously, aggrieved by the merits of the orders of the Single Judge dated 02.02.2021 and 18.03.2021, FCPL and FRL preferred appeals directly before this Court in SLP (C) No. 1354748 of 2021 and SLP (C) No. 1355657 of 2021, respecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not pass any final order, then how interim relief, that too without therebeing any hearing or any reply from side opposite on record, application for interim stay can be heard and orders be passed. Upon this, Mr. Harish Salve, learned senior counsel submitted in such eventuality, this Court may dismiss the application. 16. In view of the above, the application seeking interim stay being IA No. 14285/2021 (u/S 151 CPC) is accordingly dismissed. 24. Aggrieved by the aforesaid order, FCPL and FRL have approached this Court in SLP (C) Nos. 18089 and 18080 of 2021 respectively. 25. Mr. Harish Salve, learned Senior Counsel appearing for FRL submitted that the orders in the enforcement proceedings have been rendered while completely disregarding the order dated 21.12.2020 passed by the learned Single Judge of the Delhi High Court in CS(Comm) No. 493 of 2020, particularly, the finding that FRL does not have any arbitration agreement with the respondent. He further submitted that although an appeal has been filed against the aforesaid order of the learned Single Judge, there is no stay operating against the said order. 26. The learned Senior counsel also submitted that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pearing for Amazon, submitted that the appellants, by their conduct have demonstrated willful and intentional disobedience of the Emergency Arbitrator s interim Award, after agreeing for the Emergency Arbitrator. While he fairly stated that Amazon is not interested in pursuing the punitive directions imposed on FCPL and others, he submitted that the Emergency Arbitrator s interim Award stands confirmed by the Arbitral Tribunal, which must be abided by the appellants. Learned Counsel argued that when no stay has been granted against the interim protection afforded to them by the Arbitral Tribunal, the appellants cannot operate in contravention of the same and proceed to effectuate the scheme before the NCLT. He lastly submitted that pending any challenge, the interim orders passed by the Tribunal needs to be maintained and given effect to, so as to uphold the effectiveness and sanctity of the arbitration process. 32. Mr. Aspi Chinoy, learned Senior Counsel appearing for Amazon contended that the appellants reliance on the order dated 21.12.20, passed by the learned Single Judge of the Delhi High Court in the suit proceeding is misplaced. He submitted that, in the first instance, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oviding effective natural justice to affected parties, before a decision is taken, is necessary to maintain the Rule of law. Natural justice is usually discussed in the context of administrative actions, wherein procedural requirement of a fair hearing is read in to ensure that no injustice is caused. When it comes to judicial review, the natural justice principle is built into the rules and procedures of the Court, which are expected to be followed meticulously to ensure that highest standards of fairness are afforded to the parties. 37. It is well known that natural justice is the sworn enemy of unfairness. It is expected of the Courts to be cautious and afford a reasonable opportunity to parties, especially in commercial matters having a serious impact on the economy and employment of thousands of people. Coming to the facts herein, the opportunity provided to the appellants herein was insufficient, and cannot be upheld in the eyes of law. 38. Whenever an order is struck down as invalid being in violation of the principles of natural justice, there is no final decision of the case and fresh proceedings are left open. All that is done is to vacate the order assailed by virt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ays. Respondent No. 1, 2, 12 and 13 are directed to file an additional affidavit in the format of Annexure B1 and respondents no. 3 to 11 are directed to file an additional affidavit in the format of Annexure A1 to the judgment of M/s. Bhandari Engineers Builders Pvt. Ltd. v. M/s. Maharia Raj Joint Venture, (supra) along with the documents mentioned therein within 30 days. 40. Our attention is drawn to the fact that the learned Single Judge had relied on M/s. Bhandari Engineers Builders Pvt. Ltd. v. M/s. Maharia Raj Joint Venture, 2019 SCC Online Del. 11879, which has been overruled by a Division Bench order in Delhi Chemical and Pharmaceutical Works Pvt. Ltd. Anr. v. Himgiri Realtors Pvt. Ltd. Anr., EFA (OS) (Comm.) No. 4 of 2021. 41. Viewed differently, contempt of a civil nature can be made out under Order XXXIX Rule 2A CPC not when there has been mere disobedience , but only when there has been wilful disobedience . The allegation of wilful disobedience being in the nature of criminal liability, the same has to be proved to the satisfaction of the court that the disobedience was not mere disobedience but wilful and conscious . This Court in the case of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e impugned orders of learned Single Judge dated 02.02.2021 and 18.03.2021. 43. Coming to the merits of the case, we would like to mention a disconcerting aspect wherein the interim order enforcing the Emergency Award has adopted a standard beyond prima facie view , as required under law. It is expected of Courts to be cautious while making observations on the merits of the case, which would inevitably influence the Arbitral Tribunals hearing the matters on merit. 44. Therefore, we set aside the order of the learned Single Judge dated 02.02.2021 and 18.03.2021 passed in OMP (ENF) (COMM.) No.17 of 2021. Question No. II 45. At the outset, it is agreed by learned advocates appearing on both side that the impugned order dated 29.10.2021 in IA No. 14285/2021 moved in Arb. A (Comm.) No. 64 of 2021, needs to be set aside for nonconsideration of the orders of this Court in the proper perspective. Our order dated 09.09.2021, imposed no bar on the High Court to adjudicate the issue concerning legality of the vacate application order by the Arbitral Tribunal. In our opinion, adjudication of the applications under Section 37(2), Arbitration Act filed by the appellants before t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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