Emergency Arbitrator Proceedings in International Commercial Arbitration

Jan 26, 2016


The Emergency Arbitrator is a newly set of provision established by ICC, in order to give efficency to the arbitral proceedings. Due to rush and the need of taking immediate action in highly active commercial life, this new set of provisions is urgently needed. Considering that the commercial life has its own risky parts needing immediate intervention; the EA procudure guarantees the immediate intervention needed, in order to reduce the potential damages such as financial loss, or, the loss in reputation.

According to this new set of provisions, Article 29 of the ICC Arbitration Rules states that;

“A party that needs urgent interim or conservatory measures that cannot await the constitution of an arbitral tribunal may make an application for such measures pursuant to Emergency Arbitrator Rules. Any emergency measure granted takes the form of an order, which may be later revisited by the arbitral tribunal, once constituted.”

For the contracts concluded after January 1st, 2012 if the parties have agreed to arbitrate under the ICC Rules, the Emergency Arbitrator Provisions apply automatically; but, the parties are fee to opt-out these provisions.(Boog C., Chapter 4 Part 2: Commentary on the ICC Rules Article 29 ,p.815.) Such provision provides an alternative to state courts for interim or conservatory measures.(Fry/Greenberg/ Mazza, The Secretariat’s Guide to ICC Arbitration, para 3-1051). The must-have in this regulation is for the parties to be agreed to arbitrate under the ICC Rules. If the parties are not bounded by such arbitration clause, then the EA Provisions cannot apply to the situation at hand.

These new rules don’t prevent any party from seeking urgent interim or conservatory measures from a competent state court. (Ghaffari/Walters, The Emergeny Arbitrator – The Dawn of a New Age, Arbitration International Volume 30(2014)/Issue 1 Kluwer Law International,p:156) Article 29(7) of ICC Arbitration Rules states that the only requirement is that any measures taken by the state courts must be notified to the ICC.

1.The Conditions to Apply EA Provisions

The Emergency Arbitrator Provisions apply only to parties that are signatories to the arbitration agreement.

Furthermore, the Emergency Arbitrator Provisions shall not apply if:

• the arbitration agreement under the Rules was concluded before 1 January 2012;
• the parties have opted out of the Emergency Arbitrator Provisions (in case of usage of Standard ICC Arbitration Clauses); or
• the parties have agreed to another pre-arbitral procedure that provides for the granting of conservatory, interim or similar measures (such as a state court).

Even though it seems that the rules are very clear, some aspect of this provision may cause controversial discussions. As an exemple, a simple wording in contract can be a point of conflict between the parties. When there is a confusion whether the EA is opted out or not, most scholars opinion is to apply Favor Arbitrandum Doctrine.

Favor Arbitrandum Doctrine can be resumed as; a contract must be interpreted in light of the parties intention to arbitrate every arising dispute which is called the “Favor Arbitrandum Doctrine”. Even though Favour Arbitrandum (or Pro-arbitration) is a controversial doctrine which provides that a valid arbitration clause should generally be interpreted expansively. “Any doubts concerning the scope of arbitrable issues should be resolved in favour of arbitration.” as declared by one of US Courts (Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth Case, Inc., 473 U.S. 614].

2.The Practice of EA Procedure: “ Where to look?”

Neverthless, even though there are written rules about how and when to apply EA procedures, an unwritten rule also needs to exist in order to apply EA procedures effectively; “the substantive requierements for granting of relief should met”. “The advantages the parties seek in choosing arbitration should equally apply to their request for interim relief.”(Carlevaris/Feris, ICC International Court of Arbitration Bulletin Volume 25/1 2014-E Chapter: Running in the ICC EA Rules: The First Ten Cases p.27)

In order to understand if the substantive requirements met, a few standarts must be satisfied, such as;

1. The absence of subject of arbitration will create irreparable harm.

2. The EA’s order is urgently needed.

3. There is a reasonable possibility that the party requesting EA order will succeed on the merits of the claim

Most international require a risk of irreparable/serious injury, urgency and reasonable possibility that the EA provision requesting party will succeed on the merits of the case.

“Most often, provisional measures are intended to preserve a factual or legal situation so as to safeguard rights the recognition of which is sought from the [tribunal] having jurisdiciton as to the substance of the case.” (Born, Chapter 17: Provisional Relief in International Arbitration, Kluwer Law International p.2427)

It is stated in Art. 17A of UNCITRAL Model Law that; “The requesting party should satisfy the arbitral tribunal that: “Harm not adequately reparable by an award of damages is likely to result if the measure is not ordered, and such harm substantially outweights the harm that is likely to result the party against whom the measure is directed if the measure is granted; and there is a reasonable possibility that the requesting party will succeed on the merits of the claim.”

3.Conclusion

Finally, the EA procedure still holds its controversial position among the international arbitration courts and many scholars. While many says that EA creates a two headed verdictal mechanism, some agrees on point of view that EA is needed in rush of business life. Still, in need of taking an urgent action in order to prevent and protect the parties from irreparable damages, the EA’s contribution cannot be underestimated.

Stj. Av. B. Beril Karaman
26.01.2016

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