What are emergency arbitrators, and what do they do?
Parties in international arbitrations sometimes require emergency relief. They might need to protect evidence from being destroyed or enjoin the dissipation of assets. Or they might need to stop an imminent confidentiality breach or prevent the destruction of the object of a contract. When parties have agreed to arbitrate their dispute, there is a risk they might find themselves stuck waiting until the arbitral tribunal is constituted, or trying to seek interim relief in state courts.
Neither option is desirable. Delaying relief until a panel is constituted could cause irreparable harm. Seeking relief in court could threaten confidentiality and leave a party ensnared in a forum that arbitration agreements were designed to avoid.
To overcome these shortcomings, “emergency arbitrator” provisions have been enacted by most international arbitration institutions. These provisions give parties an opportunity to pursue interim relief pending full arbitration on the merits. All major arbitral institutions now have emergency arbitrator provisions:
- International Chamber of Commerce (“ICC”)
- International Centre for Dispute Resolution (“ICDR”) (Art. 6)
- London Court of International Arbitration (“LCIA”)
- Stockholm Chamber of Commerce (“SCC”) (App. II)
- Hong Kong International Arbitration Centre (“HKIAC”)
- Singapore International Arbitration Centre (“SIAC”)
Availability of emergency arbitrators: the role of the institution
There are two stages in seeking relief from an emergency arbitrator. The first is applying to the arbitration institution for the appointment of an emergency arbitrator. The second is seeking emergency relief before that emergency arbitrator.
In the initial stage, the institution decides whether the party’s application meets threshold requirements under applicable rules for the appointment of an emergency arbitrator. For instance, under the ICC rules, emergency arbitration provisions apply only if parties are signatories to an arbitration agreement governed by ICC rules or are successors to signatories. Further, under ICC rules, emergency arbitration provisions do not apply to agreements concluded before 2012. Similar requirements, with their own variations, are found in the rules of the LCIA, HKIAC, SIAC, and SCC.
After that, there is an initial determination at the ICC on whether the party seeking relief “needs urgent interim or conservatory measures that cannot await the constitution of an arbitral tribunal.” A comprehensive survey of the first 80 ICC emergency arbitration cases reveals that very few applications are rejected on these grounds. And the SIAC recently reported that it accepted all of the 94 applications for emergency relief filed since 2010.
If the threshold requirements are satisfied, the arbitral institution will appoint an emergency arbitrator to preside over the application for emergency relief. We detail that process further here [insert link to Topic 17a]. Emergency arbitrators are typically appointed within a few days after the institution receives the application.
Pros and cons of emergency arbitration proceedings
In deciding whether to pursue relief through emergency arbitration, parties should consider these possible benefits and downsides.
One benefit of pursuing emergency arbitration is keeping proceedings private and confidential, a core benefit of arbitration. Also, it allows parties to avoid state courts.
Another attractive feature is the flexibility afforded to the arbitrator to determine the threshold for, and any conditions associated with, awarding relief. Courts may be comparatively more rigid. For instance, arbitrators may not necessarily require the applicant to post a bond or give a so-called cross-undertaking in damages, while judges may be required to do so in some jurisdictions.
There are also a number of possible downsides to pursuing emergency arbitration. For one, they can take as long as two weeks, whereas in some jurisdictions interim relief can be obtained from courts in a matter of days. Furthermore, there are typically no third-party orders. Relief awarded through emergency arbitration cannot normally bind parties that are not parties to the relevant arbitration agreement.
Moreover, there are typically no ex parte awards. The opposing party must have received notice. In addition, emergency arbitration decisions are not immediately enforceable, as court intervention is required. Finally, seeking urgent relief through emergency arbitration is costly. The ICC, for instance, charges applicants $40,000 (USD), and the LCIA charges £31,000 (GBP).
Nevertheless, one point to consider is that some courts may be reluctant to grant relief that a party can receive through emergency arbitration. So pursuing relief through emergency arbitration may sometimes be the only option.
Ultimately, parties considering emergency arbitration should consult the relevant emergency arbitration provisions for precise requirements. The ICC’s website, for instance, offers a number of guides on how to apply for emergency measures, along with a checklist for drafting the emergency arbitrators’ orders.
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