How will an emergency arbitrator evaluate my application?
An earlier article in this series described in broad outline the emergency relief process in international arbitration. But once an arbitral institution has granted the opportunity to apply and has assigned an emergency arbitrator to your case, what happens next? And how can you be best prepared?
The process before the emergency arbitrator
If the arbitral institution determines an application for emergency relief may proceed, the next stage involves proceedings before the emergency arbitrator, including the arbitrator’s determination of whether to grant relief.
The emergency arbitrator has tremendous discretion to adopt those procedures that are best suited for the case, in light of the urgency of the application. At the same time, notwithstanding the expedited schedule, arbitral rules require that each party have a “reasonable opportunity” to present its case. This is set forth explicitly in the ICDR, ICC, and SIAC rules.
Ordinarily, parties submit written submissions and then participate in a telephonic hearing. ICC rules, in fact, contemplate that once the emergency arbitrator receives a case file, the arbitrator must render a decision no more than 15 days later, with limited exceptions. In practice, that 15-day deadline is typically met, although a fair number of orders are rendered 16 to 19 days after the file was transferred.
The LCIA, SIAC, and HKIAC similarly contemplate a decision rendered within 14 days. In effect, the emergency proceedings are like a very short arbitration – albeit one concerned only with an application for urgent interim relief.
The outcome of the proceeding is a decision. The application for relief is either rejected or granted. Importantly, the emergency arbitrator’s decision regarding the availability of urgent relief does not bind the arbitral tribunal once appointed.
Recent experience with the emergency arbitration provisions at the ICC shows that relief was granted in a minority of emergency applications, but not a small minority.
The substantive threshold
Emergency arbitrators are afforded broad discretion to decide on the appropriate legal threshold for granting relief. The emergency arbitrator is typically not required to apply domestic law principles, such as those applicable in state courts. As a result, the outcome of applications for urgent relief in arbitration can be less predictable than those before courts.
Sometimes, emergency arbitrators rely on soft law instruments codifying best practices, such as the protocol published by the Chartered Institute of Arbitrators. According to the ICC’s survey, emergency arbitrators frequently apply substantive criteria like (i) the risk of irreparable harm from declining to order relief, (ii) the party’s likelihood of success on the merits, (iii) the risk of aggravating the dispute, (iv) the likelihood of prejudging the merits, and (v) the balance of equities.
Type of relief and form of decision
Although the precise contours are not defined, emergency arbitrators are empowered to order interim or conservatory relief. Ordinarily, the relief is supposed to protect a party during the pendency of the proceedings. The relief thus may be intended to freeze the status quo by preserving assets or property, or enjoining the sale of certain products. Or relief might demand performance of certain contractual obligations, or accomplish other purposes, such as preserving evidence, providing security for costs, or ordering an interim payment.
Depending on the arbitral institution’s rules, the emergency relief decision may be named an order or an award. That labeling affects how it may be enforced in courts. Arbitral awards may benefit from more favorable enforcement regimes than simple orders.
But even if an emergency arbitrator’s decision is named an “award,” there is uncertainty in some jurisdictions as to whether it would be enforceable in court under the New York Convention. That Convention does not directly speak to the enforceability of interim measures. A court might hold that interim relief lacks the finality necessary to guarantee enforcement.
Consulting experienced international arbitration counsel can help minimize surprises in emergency relief proceedings.
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