The emergency arbitrator provisions, including those under the 2012 ICC Rules, bring additional flexibility for parties seeking urgent interim relief. However, there are outstanding concerns regarding the status of the emergency arbitrator, as well as the enforceability of his or her decisions.
In international arbitration proceedings, there is sometimes a need for urgent interim relief before the arbitral tribunal is constituted so that certain key evidence can be preserved or that a party, typically the respondent, is prevented from disposing of its assets to frustrate the enforcement of the tribunal’s final award.
Until recently, the primary option open to a party seeking such urgent interim measures was to apply to the court at the seat of the arbitration for an interim order. This may be an unattractive prospect, if that party has reservations about the local judicial system that led it to elect arbitration in the first place.
The emergency arbitrator procedure
In recent years, an increasing number of arbitral institutions have amended their rules to allow for some form of emergency relief. For instance, the revised ICC Arbitration Rules, which came into force on 1 January 2012, make provision for the appointment of an emergency arbitrator in cases where urgent interim or conservatory measures are sought before the arbitral tribunal is constituted.
Key features of the procedure include:
- The ICC emergency arbitrator provisions operate on an opt-out basis – the procedure applies automatically in respect of arbitration agreements concluded after 1 January 2012 unless the parties expressly opt out;
- Unlike the equivalent regimes of other arbitral institutions, the ICC emergency arbitrator procedure can be invoked before a request for arbitration is filed. It is designed to deal with urgent situations that cannot await the constitution of the tribunal; and
- The procedure does not prevent parties from also seeking interim measures from any competent courts.
While the emergency arbitrator procedure provides a potentially useful alternative to applying through the local courts, there are a number of limitations to the process. First, the procedure may only be used against signatories to the arbitration agreement or their successors. Thus, if interim relief is required against a third party (for example, in the form of a freezing order over funds held in the respondent’s account with a third party bank) the applicant would still need to apply to the court. Secondly, the emergency arbitrator provisions do not permit applications made without notice to the respondent, which means that in cases where an element of surprise is vital (e.g. in applications for freezing injunctions) the emergency arbitrator procedure is likely to be less useful. Finally, Article 29(2) of the ICC Rules requires that the emergency arbitrator’s decision take the form of an “order” (and not an “award”).
In light of the formal designation in Article 29(2), it is unclear whether an emergency arbitrator’s “order” will have the same status as an arbitral tribunal’s decision granting interim measures under Article 28(1) of the ICC Rules.
There is also some uncertainty over the status of the emergency arbitrator under national arbitration laws. To take England as an example, the Arbitration Act 1996 makes no reference to the emergency arbitrator, which immediately begs the question whether the emergency arbitrator is, in fact, an arbitrator under the 1996 Act.
Further, there are doubts as to whether the emergency arbitrator’s “order” made under the ICC Rules will qualify as an award so as to be enforceable under the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”).
Notably, other jurisdictions have provided useful examples of how some of these ambiguities may be addressed. In Singapore, for instance, the International Arbitration (Amendment) Act 2012, which came into force on 1 June 2012, provides that an emergency arbitrator enjoys the same status as a properly-constituted arbitral tribunal and that his or her decision, whether an “order” or an “award”, shall be enforceable in Singapore. In a similar vein, the US Court of Appeals for the Seventh Circuit in Publicis Communication v. True North Communications Inc. [2006 F. 3d 725 (14 March 2000)] rejected the artificial distinction between “orders” and “awards” and upheld the tribunal’s interim measures as final for enforcement purposes.
While emergency arbitrator provisions bring additional flexibility for parties seeking urgent interim relief, there are inevitably concerns regarding the status of the emergency arbitrator as well as the enforceability of his or her decisions, as the case may be.
Given that the emergency arbitrator procedure is still relatively new and untested in England and internationally, it is critical that parties are aware of the risks and uncertainties involved before embarking on this route in preference to seeking court assistance.