The emergency arbitration, hereinafter EA, is a relatively new tool of the arbitration procedure and, consequently, the research on this topic is scarce. Nevertheless, more and more arbitration institutions continue to adopt this innovative mechanism. International Chamber of Commerce (hereinafter ICC) and the Arbitration Institution of the Stockholm Chamber of Commerce (hereinafter SCC) have recently updated their rules, which now include EA as well. These respectable arbitration institutions are one of the most influential in Europe and have a high caseload.  Both institutions’ rules are considered to be one of the most meticulous on the subject of EA. SCC and ICC also have approximately the same number of cases on EA. 

This gives an opportunity to compare their theoretical and practical implications for a better understanding of their characteristics. The main objectives of comparing both EA procedures are: determining whether they have characteristics inherent to general EA procedures or some special regimes, assessing similarity of their EA procedures, finding main differences between both procedures, examining the practical implications of those differences, and providing recommendations on the use of EA proceedings in general and with regards to ICC and SCC.

The general argument of the article commences as follows: (1) - a brief introduction of the emergency arbitration, including its history, (2) - analysis of the ICC and SCC emergency procedures and their comparison, and (3) - exploring the limitations of emergency arbitration. The findings and practical recommendations are summarised in the conclusion.

Mr. Michaelson (2014) has noted that historically, there was no procedure for applications upon an emergency basis before the referral to arbitration, or before the formation of the tribunal. Therefore, the applicant had to lodge an application to the local court for the relief, thus often ignoring the arbitration clause.

The first arbitral institution to present a solution for this problem was the ICC. In force since 1990, the Rules established for a Pre-Arbitral Referee Procedure allow parties to apply to a ‘referee’ for urgent provisional measures when difficulties arise in contractual relationships, prior to referral to arbitration, as noted on the ICC website. This is a procedure in many ways different from EA, however its aims are the same. Starting with 2010, most arbitration institutions have enabled EA in its modern form.

The emergency arbitration or ‘emergency proceedings’ as in LCIA Arbitration Rules (2014), ‘emergency relief’ as in SIAC Arbitration Rules (2015) or ‘emergency measures’ as in ICC Rules (2012) is a special procedural tool in arbitration designed to provide relief before the constitution of the arbitral tribunal. Michael Dunmore (2015) notes that an applicant should be able to demonstrate the following thresholds in order to seek emergency relief: urgency, at least a prima facie case on the merits, at least to the extent of the relief requested, and some concept of irreparable harm.

Unlike in the standard proceedings, where parties may employ as many arbitrators as they wish, EA has a sole emergency arbitrator. Mr. Michaelson (2014) describes the general process of emergency arbitration as follows: an emergency arbitrator immediately takes control of the process and very rapidly, in succession, organises the proceeding, issues a scheduling order, obtains submissions from counsel, undertakes a merits hearing if parties opt to, and renders a reasoned award – all within a matter of a couple of weeks. Such general procedure applies for EA`s both under the ICC and SCC Rules. 

Drafting the EA proceedings in ICC and SCC has involved some of the best international experts in arbitration. In both instances, the drafters have chosen a very detailed procedure with a moderate degree of flexibility. As a result, EA proceedings under the SCC and ICC Rules have deadlines for most steps the parties and the emergency arbitrator of the EA have to make. They range from the appointment of the emergency arbitrator to the delivering of his final decision. The deadlines are imposed in order for the award to be issued sufficiently quickly, so that overall effectiveness of emergency arbitration is observed.

The award or order of the EA will be ignored under both the SCC and ICC rules in the proceedings of the following arbitration, if such commences afterwards. They also prevent the appointment of the emergency arbitrator in further proceedings related to the case. Such measures were adopted as precaution, made in order to ensure the impartiality of the emergency arbitrator. At the same time, both rules give certain flexibility to the parties when it comes to the challenges of arbitrators and conduct of emergency proceedings. Still, this flexibility is constrained by the deadlines set for the final decision, 5 days in SCC Rules and 15 in ICC Rules.

The other major difference between ICC’s and SCC’s EA lies in the scope of their application. Unlike the ICC Rules, SCC Rules provide a retroactive opt-out. This is a unique feature of SCC Rules, which enables the use of EA provisions by the arbitration clauses, even before EA was included in the updated version of 2010 SCC Rules (i.e. in the arbitration agreements prior to 2010). Such feature was meant to encourage the use of EAs. According to the data provided by Bateson and Howlett and statistics on the SCC website, both SCC and ICC have approximately the same number of EA cases initiated between 2012 and 2014. However, considering the lower caseload of SCC, the percentage of EA cases is higher under its rules. This fact suggests that retroactive opt-out did achieve its initial aim.

In general, SCC Rules on EA are less flexible. They specify the language for the request of the application for the appointment of the emergency arbitrator. According to Appendix II, Article 4 of the SCC Rules, in case of a lack of jurisdiction over the dispute, the emergency arbitrator cannot be appointed. The ICC does not include such particular provision. However, ICC rules include the main principles, which are designed to cover the situations not described in the appendix dedicated to EA. Both rules have different time limits for the challenge of arbitrator: SCC Rules–‘24 hours’ (Appendix II, Article 4, paragraph (3) of the SCC Rules 2010), ICC Rules – ‘3 days’ (Appendix V, Article 2, paragraph(1) of the ICC Rules 2012).

The other major difference lies in the procedure of termination of the EA. According to Appendix II, Article 9 of the SCC Rules (2010), the EA is terminated when: arbitration is not commenced within 30 days from the date of the emergency decision, or the case is not referred to an Arbitral Tribunal within 90 days from the date of the emergency decision. When it comes to ICC Rules, the President shall terminate the emergency arbitrator proceedings if a Request for Arbitration has not been received by the Secretariat from the applicant within 10 days. In both cases, the applicant has to pay the costs of Emergency Arbitration. Under the ICC Rules, the emergency arbiter fixes and apportions the costs of EA proceedings. The SCC Rules have a slightly different provision. According to them, the emergency arbitrator can, but is not obliged to, apportion the costs in the final award, if one of the parties request him to do so.

In general, the main differences between ICC’s and SCC’s EA lie in the scope of application, the time limits for appointment of the arbitrator (24 hours for ICC, 2 days for SCC), challenges to these appointments and the deadline for the final decision (15 days for ICC, 5 days for SCC). Also, the allocation of costs also differs, as well as the overall costs of the procedure (ICC for US$40,000 [35,646€], SCC for €15,000). 

The EA is perceived as having several significant limitations, mostly caused by the nature of arbitration. The assessment of the ways the SCC and ICC Rules deal with limitations can help demonstrate their utility.

Unlike in traditional litigation, it is mandatory to send a notice to the other party in order to initiate EA. This alerts the other party, giving it time to potentially cause the irreparable harm (e.g transfer the assets to another account). Both the ICC and SCC have tight deadlines, 24 and 48 hours respectively, in order to avoid such situations. 

The other significant limitation is the inability of the emergency arbitrator to make orders against a third party. There is a a general need to notify the other party and no possibility to prevent it from hiding or harming assets by applying measures against the third party in EA. Thus, the application of EA is further limited. Neither rule can address this limitation, as measures against third parties are contrary to the nature of arbitration.

The biggest issue with the EA lies in the enforceability of the orders of the emergency arbitrator. The decision of the arbitral tribunal has to be final and binding to qualify for the enforcement under the New York Arbitration Convention. Whether an emergency arbitrator is an arbitral tribunal in the sense of New York Convention and whether its decision is final and binding is questionable. Mr. Dunmore (2015) notes that the emergency arbitrator is usually recognised as arbitral tribunal for the purposes of the Convention. However, the finality and binding nature of his decision is still disputed. The issue has been dealt with in different ways: by interpretation of the norms of UNCITRAL Model Law, understanding of the finality of the awards in terms of the issues they intend to address as noted by Mr. Simsive (2015) or implementation of new legislation, like in Honk Kong.

Neither ICC, nor SCC has faced any serious issues with the enforceability to date. A study commissioned by the ICC in 2014 shows that out of the 10 first cases of EA, none has faced any problems with enforceability, though in eight cases an order was issued. The adoption of retroactive opt-out in SCC Rules increases the risks of EA decision not being enforced. The other party can claim that it did not agree to the EA in the arbitration clause and thus is not bound by its decision. However, such situations are purely theoretical and have not occurred in the known practice. 

Overall, the SCC and ICC Rules on EA have the general characteristics of EA provisions in other major arbitration institution. Under the SCC and ICC Rules, the EA proceedings can be initiated only when there is a need for urgency, some concept of irreparable harm and prima facie jurisdiction. The order has to be rendered within a certain time limit and the emergency arbitrator cannot participate in related arbitration proceedings.

At the same time, both rules have certain differences, making them more or less relevant depending on the situation. First of all, SCC Rules provide the retroactive opt-out, which means that even if the arbitration agreement was concluded prior to January 1, 2010, the parties still have the possibility to use it, provided they satisfy the criteria mentioned above. Though such move brought a more active use of EA under SCC Rules, it is also a risk, as the losing party may try to annul the order, claiming that arbitral tribunal has exceeded its authority. 

The other major difference is in the deadlines. The ICC Rules provide a more lenient schedule than SCC Rules. The emergency arbitrator has to render the decision in 5 days under SCC, unlike 15 under ICC Rules. At the same time, in both cases the deadline may be extended, when requested by the parties or by the arbitrator. This is a necessary precaution giving time for the emergency arbitrator to issue an impartial decision of good quality, in case one of the parties is trying to prolong the procedure or the case is complex.

Both procedures have a limited practical scope of use. It is not recommended to resort to EA when the opposing party is unlikely to comply with the proceedings due to the unavailability of the ex parte proceedings and is unlikely to comply voluntarily with the emergency arbitrator`s decision due to the problems with the enforcement of the EA order. However, in certain cases, where the confidentiality is important and the efficiency of the only available court is doubtful, the possibility to resort to EA can prove beneficial.


By Oleksandr Zablotskyi 


This article was originally published in issue 4.2 of the magazine, which can be accessed here.


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