Emergency arbitrator: a helping hand in times of need

Copy link

When commercial or economic entities become embroiled in disputes, many take measures to quickly divert or conceal the property in question, or destroy case-related evidence to minimise their losses in the dispute.

As constitution of an arbitral tribunal in international arbitration can take a long time, a party must bear the risks of property diversion or evidence destruction before the hearing.

On that note, to address arbitration needs “so urgent that waiting for the constitution of the arbitral tribunal before the granting of interim or preservation measures is not an option”, the emergency arbitrator system was created, offering parties access to pre-tribunal interim relief.

The International Chamber of Commerce (ICC) Court of Arbitration introduced the emergency arbitrator mechanism in 2012, but it was not the ICC’s first attempt to attempt pre-arbitral interim measures. As early as 1990, the ICC created the pre-arbitral referee procedure in an attempt to put in place a system to resolve the issue of interim measures before arbitral tribunals are constituted.

The pre-arbitral referee procedure was an embryonic form of the ICC’s emergency arbitrator provisions, although the two fundamentally differ in how they apply, with the former being “opt-in” and the latter being “opt-out”.

This difference is the fundamental reason why the former has not been widely employed while the latter has been wildly successful.

It should be noted that the ICC’s Rules for a Pre-Arbitral Referee Procedure are still in effect. The latest 2021 edition of the ICC Arbitration Rules (ICC rules) details current provisions for the emergency arbitrator procedure in article 29 and appendix V, Emergency Arbitrator Rules.

Why emergency arbitrator?

Donna Huang
Donna Huang

Although there is not yet any uniform practice around the enforceability of emergency arbitrator orders in courts of different countries, the mechanism has been demonstrating increasingly greater vitality in the past 30 years, due to its high attentiveness of party autonomy, confidentiality, efficiency and impartiality.

Practice has shown that the enforceability of emergency arbitrators’ orders is not manifest solely in their recognition and enforcement by courts.

On one hand, arbitration rules specify that orders are binding on the parties; on the other hand, the non-complying party also bears potential risk of the arbitral tribunal drawing an adverse inference from its breach.

As of April 2018, in 23 orders rendered by the ICC approving emergency measure applications, a party failed to voluntarily comply with the order in only three instances.

The emergency arbitrator mechanism has also played a positive catalytic role in promoting settlements between parties, evidenced by review of substantive content of applicants’ arbitration claims by emergency arbitrators on whether reasonable prospect of prevailing permits parties to build up expectations of the arbitral award and adjust their positions at an early stage.

As of April 2018, of the 80 applications for emergency measures accepted by the ICC, settlement was reached before rendering of the final award in 25 cases, representing 31% of cases.

How to apply

A party is required to promptly inform the secretariat before submitting an application so time can be allocated in advance to expedite processing the application. Applications should be sent to emergencyarbitrator@iccwbo.org by e-mail, an address exclusively used for submitting applications for emergency measures. For general questions regarding application of the ICC rules and emergency arbitrator provisions, communications need to be addressed to the specific case management team, or arb@iccwbo.org.

Although there is no fixed format or template for an application, it should be prepared in the language of arbitration specified in the arbitration agreement or, in the absence of this, the language of the arbitration agreement itself. An application is required to provide the following information:

  1. Basic particulars of the parties, including their full names, descriptions, addresses and contact information;
  2. Reason for submitting the application and an account of the underlying dispute in question;
  3. Emergency measures being sought;
  4. Reason why it is necessary to apply for emergency measures without waiting for constitution of the tribunal;
  5. Valid arbitration agreement;
  6. Proof of payment.

Duration and effect

Vera He
Vera He

If the court of arbitration determines that an application for emergency arbitrator should be accepted, the president will usually appoint an emergency arbitrator within two calendar days from the date that the secretariat receives the application. The emergency arbitrator will issue a procedural schedule within two days from the date of receipt of the case materials and render an order within 15 days.

The applicant must submit an application for arbitration before submitting its application for an emergency arbitrator – or within 10 days from the date it submits the application – failing which the emergency arbitration procedure halts.

In practice of the court of arbitration, the emergency arbitrator renders an order on average within 16 days.

Unless the parties have expressly excluded application of the emergency arbitrator provisions, they are deemed to have undertaken to comply with any order rendered by the emergency arbitrator. The emergency arbitrator may additionally require a party to provide appropriate security.

However, notwithstanding application of the emergency arbitrator procedure, a party retains the right to apply for emergency measures to a competent judicial authority at any time. An emergency arbitrator’s order is not binding on the subsequently constituted arbitral tribunal with respect to any question, matter or dispute identified in the order. The arbitral tribunal may revise, terminate or set aside an order rendered by the emergency arbitrator.

Critera and actual use

Once the secretariat receives an application, the president of the court of arbitration will consider whether the emergency arbitrator provisions are applicable by measuring against the following criteria:

  • Parties are signatories to, or assignees under, the arbitration agreement and the arbitration agreement is the same under which the request is made;
  • Arbitration agreement was entered into after 1 January 2012;
  • Parties have not expressly excluded application of the emergency arbitrator provisions; and
  • Arbitration agreement on which the request is based does not derive from an international treaty.

Of 212 applications received by the ICC between 2012 and 2022, the president denied applicability in only six cases, making it a rare occurrence.

Once applicability is confirmed, it is up to the emergency arbitrator to decide on the jurisdiction and admissibility of the application, the latter including a review of urgency to confirm whether emergency measures without waiting for tribunal constitution are truly necessary.

Although the emergency arbitrator system has been widely accepted by international arbitration institutions, the mechanism is designed for special and urgent cases, so the determination of “urgency” requires great caution.

Accordingly, instances in which emergency measures were ultimately taken remain relatively few in number. As mentioned, of 80 applications for emergency measures, only 23 were partially or fully approved by the emergency arbitrator, representing an approval rate of 29%.

Among emergency arbitrator applications received as of 2022, 51% were denied by the arbitrators, holding that they did not reach the threshold for granting emergency measures.

Additionally, there is still a lack of substantive regulations and guidelines on the issues of jurisdiction, admissibility and urgency of emergency arbitrators in international arbitration.

According to the ICC’s Emergency Arbitrator Proceedings report issued in April 2019, out of 80 applications:

  • In 50% of the cases, consideration was given to whether irreparable losses would be caused if no relief was granted;
  • In 38% of the cases, consideration was given to the likelihood of success in the substantive dispute;
  • In 20% of the cases, consideration was given to whether the loss incurred from not granting emergency measures would be significantly higher than the likely loss from granting the emergency measures;
  • In 15% of the cases, consideration was given to whether there was a risk that the dispute would be further aggravated if no relief was granted; and
  • In a further 24% of cases, no consideration was given to the substantive dispute.

Clearly, given the varying considerations for granting interim measures by different emergency arbitrators, no uniform practice or criteria have taken form.

What is certain, however, is that “urgency” is a very high standard. Arbitrators’ determination of the degree of urgency is extremely prudent, essentially requiring a level that is “so urgent that waiting for constitution of the arbitral tribunal is not an option”.

Incorporation of the emergency arbitrator system places greater demands on the speed of response of arbitral institutions and the speed of appointment of arbitrators.

Although, pursuant to article 3 of the ICC rules, the period for appointing an emergency arbitrator does not include public holidays or non-working days, in practice the secretariat will nevertheless usually process applications for emergency measures on “off” days to quickly respond to the urgent needs of parties.

Efficiency of the emergency arbitrator system is also highly dependent on the active co-operation of parties. Applicants will often resort to a “sudden ambush” tactic – such as submitting an application before a holiday or after work on a Friday – to catch the respondent off-guard in responding. The problem, however, is that this also makes it difficult for the arbitral institution to deal with the application and appoint a suitable emergency arbitrator outside working hours. Accordingly, informing the secretariat in advance of an impending emergency application is crucial to the efficient and rational progress of subsequent proceedings.

With the exception of Hong Kong, Singapore and New Zealand – which expressly specify that orders of emergency arbitrators are enforceable – whether courts in other countries and regions have the power to enforce the orders of emergency arbitrators is a matter that requires further accumulation of precedents.

How to better co-ordinate between courts and arbitral institutions in terms of emergency measures and provide a more user-friendly and reliable environment for commercial entities to survive in international arbitration is one of the considerations in creating a preferred seat of arbitration.

As a “helping hand” for granting emergency measures to parties in international arbitration proceedings, emergency arbitrator procedures have demonstrated great vitality since their creation. How to improve the predictability and enforceability of emergency arbitrator procedures and further improve procedural regulations to better meet the needs of users are riddles that await arbitration institutions to resolve.

Donna Huang is the director and Vera He is deputy director of arbitration and ADR for North Asia at the International Chamber of Commerce (ICC). Huang is also the chief representative of the Shanghai office

Copy link