Author: Chiraz ABID [efn_note]Doctor of laws and a Registered lawyer at the Paris Bars, specialised in Construction, Mediation and International Arbitration, ALTANA. Yosra Deblaoui, MACI student and trainee at ALTANA, is warmly thanked for her assistance in writing this paper.[/efn_note]
Preliminary remarks: the increasing popularity of the EA procedure
Since its adoption in international arbitration, Emergency Arbitration (hereinafter referred to as “EA”) has proved to be very successful[efn_note]Lars Markert and Raeesa Rawal, Emergency Arbitration in Investment and Construction Disputes : An Uneasy Fit ?, in Maxi Scherer (ed), Journal of International Arbitratio,n (Kluwer law international 2020, volume 37 Issue 1), p.131 : « Over the past decade, emergency arbitration has become one of international arbitration’s biggest success stories ».[/efn_note]. Scholars define EA as “an avenue for fast and uncomplicated interim protection under an arbitral mechanism that appropriately balances opposing parties’ rights and interests”[efn_note]Charles N. Brower, Ariel Meyerstein & Stephan W. Schill, The Power and Effectiveness of Pre-Arbitral Provisional Relief: The SCC Emergency Arbitrator in Investor-State Disputes, in Between East and West: Essays in Honour of Ulf Franke (Kaj Hobér, Annette Magnusson & Marie Öhrström eds, JurisNet 2010), 62 – 64.[/efn_note].
This has recently led to the adoption by the majority of arbitration institutions[efn_note]See : the Singapore International Arbitration Centre (SIAC), the International Chamber of Commerce (ICC), the London Court of International Arbitration (LCIA), The Japan Commercial Arbitration Association (JCAA) and more recently, the Hong Kong International Arbitration Centre (HKIAC)) The Dubai International Arbitration Centre (DIAC), Saudi Center for Commercial Arbitration (SCCA) and the DIFC-LCIA Arbitration Centre.[/efn_note] of provisions related to emergency arbitration.
The EA allows a party to request interim or protective measures, notably for the purposes of preserving evidence or the factual status quo, or to request the freezing of assets or the prevention of the wrongful calling of a bond, before an arbitral tribunal is formally constituted. The measure requested must be urgent, necessary or appropriate in the light of the circumstances. Once a request is received by an arbitral institution, the latter shall appoint an arbitrator on an emergency basis to rule upon the request in a timely manner.
Addressing the ICC rules in this respect is of particular interest because the institution now has sufficient practical exposure to EA procedures, and has, as such, developed several techniques aiming at increasing the predictability of EA procedures, avoiding abuse of process and stimulating efficiency in the enforcement of EA orders.
This paper lists, on a non-exhaustive basis, 10 useful tips to recall before appointing an emergency arbitrator in commercial arbitration under the ICC 2017 rules:
- Parties shall express their agreement to the application of the Emergency Arbitrator provisions
The pre-requisite for the initiation of an EA procedure is the consent of the parties to a body of arbitration rules which provide for EA as the ICC 2017 Rules. The provisions related to EA shall apply ipso jure unless “the arbitration agreement under the Rules was concluded before the date on which the Rules came into force”; or if “the parties have agreed to opt out of the Emergency Arbitrator Provisions”; or if “the parties have agreed to another pre-arbitral procedure that provides for the granting of conservatory, interim or similar measures”[efn_note]Christopher Boog, ‘Chapter 17, Part II: Commentary on the ICC Rules, Article 29 [Emergency arbitrator]’, in Manuel Arroyo (ed), Arbitration in Switzerland: The Practitioner’s Guide (Second Edition), 2nd edition (© Kluwer Law International; Kluwer Law International 2018), p.2380.[/efn_note].
- The ICC Rules have included barriers to avoid abuse of the procedure
Parties can strategically initiate EA proceedings to “test” the merits of their case and then consider whether to settle the case after having exerted some pressure on the responding party. In order to avoid the misuse of the EA procedure, the ICC Rules have included “barriers to avoid abuse of the proceedings such as a USD 40,000 fee per Application[efn_note]Article 7(1) of Appendix V requires an applicant to pay USD 40,000 (USD 10,000 for ICC administrative expenses and USD 30,000 for the EA’s fees and expenses)[/efn_note] and a requirement to file the Request for Arbitration on the merits within 10 days of filing the Application”[efn_note]Emergency Arbitrator Proceedings, Report of the ICC Commission on Arbitration and ADR Task Force on Emergency Arbitrator Proceedings, p.9, pt.58.[/efn_note].
- Emergency arbitrators must establish a procedural timetable normally within two days from the transmission of the file
According to Article 5(1) of Appendix V, Emergency Arbitrators (hereinafter referred to as “EAs”) must establish a procedural timetable “normally within two days from the transmission of the file”.
EAs should write to the parties as soon as practicable after receiving the file to establish a procedural schedule and basic instructions. This communication does not require prior consultation with the parties.
In this initial communication, EAs may give the parties a specific period of time to comment on the schedule and instructions and to inform them if a hearing will be requested[efn_note]Emergency Arbitrator Proceedings, Report of the ICC Commission on Arbitration and ADR Task Force on Emergency Arbitrator Proceedings, p.21, pt.124[/efn_note].
EAs have a large degree of freedom in the conduct of the procedure[efn_note]Article 5(2) of Appendix V of the ICC 2017 Rules[/efn_note]. Indeed, EAs have at least the powers of arbitrators acting under the expedited procedure provisions introduced in the 2017 ICC Rules[efn_note]Articles 3(4) and 3(5) of Appendix VI of the ICC 2017 Rules[/efn_note]. This would mean, for example, that EAs have the power to “i) decide the case on documents only, with no hearing and no examination of witnesses, and ii) limit the number, scope and length of submissions”[efn_note]Emergency Arbitrator Proceedings, Report of the ICC Commission on Arbitration and ADR Task Force on Emergency Arbitrator Proceedings, p.20, pt.120.[/efn_note].
- The EAs have the possibility to extend the time limit for the Answer until after the filing of the Request for Arbitration
In ICC EA cases, the written submissions are usually as follows: the Request, an Answer to the Request, a Reply and a Rejoinder.
It has been observed in practice that the claimant files its EA submissions and, in parallel, its Request for Arbitration on the merits to the ICC.
In order to grant the respondent a full opportunity to submit its defense and to safeguard due process, EAs have may in view of the short 15-day time limit, extend the time limit for the Answer until after the filing of the Request for Arbitration.
- Parties have the right to present witnesses
There is no provision in the ICC Rules that prevents a claimant or respondent from submitting witness statements or expert reports. Consequently, EAs have the broad power to rely on such evidence.
According to the ICC commission report on emergency arbitrator proceedings, “in the first 80 ICC EA Applications, witness statements were submitted in 18 cases, and expert reports were filed in three cases. In only a few of these cases, witnesses or experts were called for oral testimony. In one exceptional case, the Application came before the EA with several witness statements and the applicant also requested live testimony. Respondent also produced several witness statements in reply”[efn_note]Emergency Arbitrator Proceedings, Report of the ICC Commission on Arbitration and ADR Task Force on Emergency Arbitrator Proceedings, p.21, pt.127.[/efn_note].
Therefore, from a practical point of view it would appear that although parties have the possibility to submit witnesses, in the majority of cases, witness statements and expert reports have rarely been filed since the establishment of the EA procedure in 2017. In the few cases where witness statements have been submitted to the EAs, no examination of witnessed has occurred. This is the consequence of the urgent nature of the procedure. Indeed, resorting to witnesses lengthens a procedure, which, by definition, is intended to be expeditious.
- The EA has no strict obligation under the Rules to hold a hearing
Concerning the hearing, EAs have the discretionary power to conduct the procedure as they see fit. Indeed, an emergency arbitrator may render his/her decision by “deciding on documents only or by conducting a hearing in person or even by videoconference, telephone or similar means of communication”[efn_note]Emergency Arbitrator Proceedings, Report of the ICC Commission on Arbitration and ADR Task Force on Emergency Arbitrator Proceedings, p.21, pt.129.[/efn_note].
While it is true that the emergency arbitrator does not have a strict obligation to hold a hearing, it is still preferable to do so if requested by the parties, in compliance with the right to represent one’s case.
In the context of the Covid-19 pandemic, remote hearings are suitable solution in this respect.
- The Emergency Arbitrator Provisions are not intended to prevent any party from seeking urgent interim or conservatory measures from a competent judicial authority
In the case of an emergency arbitration, parties retain the right to apply to the domestic courts for the appropriate interim relief[efn_note]Article 29(7) of the ICC Rules[/efn_note] and consequently, opt out of emergency arbitration provisions[efn_note]Lars Markert and Raeesa Rawal, Emergency Arbitration in Investment and Construction Disputes : An Uneasy Fit ?, in Maxi Scherer (ed), Journal of International Arbitratio,n (Kluwer law international 2020, volume 37 Issue 1), p.133.[/efn_note].
However, procedures before state courts, unlike arbitration, are not confidential and are subject to procedural rules that the parties had sought to avoid by choosing arbitration, which may render the measures requested through this channel inaccessible or ineffective[efn_note]In Gerard Metals S.A. v. Timis  EWHC 2327 (Ch, the English High Court declined to grant a freezing injunction under the Arbitration Act 1996 (the ‘Act’), because the applicable LCIA Rules contained a provision for emergency arbitration[/efn_note].
- Arbitral tribunals are free to uphold or reverse any order issued by an emergency arbitrator, and are not bound by any emergency arbitrator decision
The EAs decisions are formally embodied in an order according to the ICC Rules. Unlike an arbitral tribunal, an emergency arbitrator cannot render an arbitral award as this would necessarily entail the scrutiny process provided for in Article 34 of the ICC Rules, which contravenes the essence of emergency arbitration proceedings.
Therefore, the ICC Rules provide that the emergency arbitrator’s order “shall not bind the arbitral tribunal with respect to any question, issue or dispute determined in the order. Any ICC arbitral tribunal may modify, terminate or annul the order or any modification thereto made by the emergency arbitrator”[efn_note]Article 27(3) of the ICC 2017 Rules[/efn_note].
This provision is not unanimously approved since it raises the issue of the enforceability of an order. For this reason, other institutional rules grant the possibility for EAs to issue an order or an award[efn_note]Comparatively, LCIA 2014 rules, art 9.1 provides that the EAs decision can take the form of ‘award’ or ‘order’.[/efn_note].
- The order shall be rendered within 15 days from the date of transmission of the file to the EA, a deadline that can be extended by the President of the ICC Court
EAs shall render their order within 15 days from the date the file is transmitted to them[efn_note]Article 6(4) of Appendix V of the ICC 2017 Rules[/efn_note], but this time limit can be extended by the President of the ICC Court either at the request of the EA or on the president’s motion.
According to the ICC commission report on emergency arbitrator proceedings: “in ten of the first 80 ICC EA Applications, no Order was rendered due to withdrawal or non-applicability of the ICC EA Rules. Out of the 70 remaining cases:
- In 33 cases, the 15-day deadline was complied with. The Order was made in less than 15 days in three cases.
- In 32 cases, the Order was rendered between day 16 and day 19.
- In 5 cases, the Order was rendered more than 19 days after the file was transmitted to the EA, in each case after an extension was approved by the President. In one case (the longest case by far), the total time elapsed between the transmission of the file to the EA and the Order was 30 days. These delays can primarily be attributed to parties agreeing on an extensive hearing schedule affecting the procedural timetables, or a request for temporary suspension of a scheduled hearing resulting from an initial non-compliance of a respondent with a preliminary Order to maintain the status quo such as the calling of a letter of credit”[efn_note]Emergency Arbitrator Proceedings, Report of the ICC Commission on Arbitration and ADR Task Force on Emergency Arbitrator Proceedings, p.22, pt.135.[/efn_note].
By way of illustration, a recent report on an emergency arbitration under the ICC Rules for a major construction project in the Middle East and North Africa (MENA) region highlighted the efficiency and speed of this mechanism in construction disputes. It has been reported that “complying with the time limit set out in the ICC Rules, the emergency arbitrator issued an order in seven days after the hearing – a total of twenty days after the claimant’s application”[efn_note]Lars Markert and Raeesa Rawal, Emergency Arbitration in Investment and Construction Disputes: An Uneasy Fit ?, in Maxi Scherer (ed), Journal of International Arbitratio,n (Kluwer law international 2020, volume 37 Issue 1), p.141.[/efn_note].
It results from the above that the -day time limit is usually complied with by EAs.
- There is no provision to safeguard the enforcement of the EA’s decision in the various States signatories to the New York Convention
Scholars consider that, in the light of the New York Convention, an EA decision whether it qualifies as an “order” or an “award”, may not be recognized and enforced in most jurisdictions because, by their nature, interim measures do not have a final character, which is the essential criteria to characterize an arbitral award[efn_note]D. Di Pietro, “What Constitutes an Arbitral Award Under the New York Convention?”, Enforcement of Arbitration Agreements and International Arbitral Awards: The New York Convention in Practice (Cameron May, 2008), at pp. 155-156[/efn_note].
Although several states have enacted a legislation providing that EA decisions may be enforced by the courts[efn_note]Singapore, New Zealand and Hong Kong[/efn_note], and regardless of the existence of a case law in this respect in the USA and in Ukraine, the enforceability of orders in most jurisdictions is unsettled.
However, in the absence of a legislation governing the issue, solutions are carved by domestic jurisdictions on a case by case basis.
This being said, most national courts remain silent on the issue of enforceability of decisions rendered in emergency arbitrations. As a result, it is difficult to assert a dominant practice or to predict the status of the enforceability of EA decisions under the New York Convention[efn_note]Emergency Arbitrator Proceedings, Report of the ICC Commission on Arbitration and ADR Task Force on Emergency Arbitrator Proceedings, p.36, pt.132.[/efn_note].
Emergency arbitration is a leading example of the efficiency and speed in commercial arbitration. It results from the ICC Dispute resolution 2019 statistics according to which “Since their introduction in 2012 until 1 March 2019, the ICC Emergency Arbitrator Rules have enabled parties to apply 120 times for ‘Emergency Measures’ and receive a decision within a 15-day time limit and prior to the constitution of an arbitral tribunal”[efn_note]ICC Resolution 2019 statistics, p.17[/efn_note]. However, the absence provisions on the enforceability of EA decisions may be perceived by some as hindering the efficiency of this procedure. This is why it is necessary that each State enact clear provisions in this respect or that a new provision is inserted in the NY Convention, in order to safeguard predictability and efficiency of the EA procedure.