It is often said that arbitration is a creature of contract. Backed by the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, and with a few caveats, indeed, arbitration allows the parties to craft a dispute resolution process that best suits their needs. Yet, until relatively recently, tools available to the courts were not being used in arbitration.
One such tool is the ability of a party to seek emergency relief from the courts before a suit is filed. No such mechanism was available to parties who agreed to arbitrate. For emergency relief, a party’s only recourse was to go to a court or wait until the arbitral tribunal was constituted. This option proved unsuitable for parties engaged in international business transactions who had selected arbitration for its neutral forum, but had a need for urgent relief.
To address this problem, in 1990, the International Chamber of Commerce (ICC) put into effect its Rules for a Pre-Arbitral Referee Procedure, which enabled the appointment of a “referee” to resolve urgent issues between the parties before the constitution of the arbitral tribunal. The parties could agree on the referee, or the referee could be selected by the president of the ICC International Court of Arbitration. The referee’s decision remained binding upon the parties until the referee, a court, or the arbitral tribunal decided otherwise. Although echoing the emergency arbitrator provisions we are familiar with today, there was a significant difference. The Pre-Arbitral Referee Rules required an ICC arbitration clause plus the parties’ express agreement to apply the Pre-Arbitral Referee Rules. This extra step is one of the oft-cited reasons these rules were not more widely used.
On January 1, 2012, the ICC revised its Rules of Arbitration to introduce emergency arbitrator provisions. Under the revised rules, the provisions applied to all ICC arbitration agreements made after that date, unless the parties agreed otherwise. Since their introduction, the ICC has seen a steady increase in the number of emergency arbitrator applications. By 2020, parties in ICC arbitration had used the provisions a total of 181 times to seek, among other urgent relief, emergency protection of assets or property, preservation of evidence, or preservation of the status quo.
The ICC reported that in 2020, it received 32 applications under these provisions. In those 17 orders, the requested relief was dismissed in 14 cases, granted in 5 cases, and partially granted in 6 cases. The cases involved parties from thirty-three nationalities and a variety of industries. Fourteen cases included multiple parties, and seven involved states or state entities in commercial disputes. The ICC also reported that “[w]hile half of the emergency arbitrator applications relate to the construction/engineering and energy sectors, other disputes originated from the chemical industry, general trade and distribution, health and pharmaceuticals, industrial equipment, telecommunications/specialised technologies, transportation, and leisure and entertainment.”
In 2019, the ICC released the Report of the ICC Commission on Arbitration and ADR Task Force on Emergency Arbitrator Proceedings. Although focused on the first eighty ICC emergency arbitrator cases, the report’s main findings continue to generally apply to emergency arbitrator cases filed since it was published. The report found that the ICC’s rules provide emergency arbitrators with a “considerable degree of discretion and flexibility,” such that the approach to threshold issues, procedural matters, substantive standards, and post-emergency arbitration considerations varied. While considering lex contractus or the lex arbitri, emergency arbitrators often applied substantive criteria derived from international practice rather than from any specific domestic law. Also, given the nature of interim relief and the exceptional circumstances often required for urgent relief, the requested relief has not often been granted.
Despite this fact, and despite enforceability concerns related to the interim nature and form of emergency arbitrator decisions in general, parties worldwide continue to seek emergency arbitrator orders, perhaps because when granted, “[emergency arbitrator] proceedings benefit from high levels of compliance by the parties, from the support of local courts and from the tribunal on the merits.” The report found that in the vast majority of cases, parties voluntarily complied with emergency arbitrator decisions.
Readers are encouraged to consult the report for a detailed analysis of procedural and substantive issues that may arise in ICC emergency arbitrator proceedings, including reference to ICC practice guides and case management techniques for efficient emergency arbitrator proceedings.
