Ercüment Erdem Att. Melissa Balikci

ICC Report on Emergency Arbitrator Proceedings

February 2020

Introduction

On the ICC Turkey Arbitration Day, one of the topics discussed was the ICC Report on the Emergency Arbitrator Proceedings. As known, in April 2019 the ICC Commission on Arbitration and ADR Task Force on Emergency Arbitrator Proceedings published a report (“Report”).[1]

The Report analyses all aspects, including procedural and substantive issues that may arise in emergency arbitrator (“EA”) proceedings and is aimed at facilitating the use of EA proceedings through increased transparency and predictability.

The Report contains statistics, some of which are stated, below. By 30 April 2018, 80 ICC Applications for Emergency Measures had been filed; therefore the numbers below relate to these applications:[2]

  • Relief has been granted in only 23 of the ICC EA applications, and in only eight of these cases has the EA fully granted the requested relief;[3]
  • Twenty-one EA applications were rejected in whole or in part on threshold grounds;[4]
  • Three of these EA applications were rejected in whole or in part by the President of the ICC International Court of Arbitration as part of the President’s “applicability” test;[5]
  • Threshold issues were at the core of 56 of the first 80 ICC EA cases;[6] and
  • Twenty-five cases settled on their merits before the issuance of any final award, among which four settled before any order was ever issued.[7]

Content

The report deals with the following four topics; (i) general issues, (ii) threshold issues, (iii) procedural matters and (iv) substantive standards.

In the context of EA proceedings, it is important to note that there is no universal application, nor can one draw general rules.[8] As discussed in the Report, this is maınly due to the degree of discretion and flexibility that the ICC Arbitration Rules (“ICC Rules”)[9] leave to the EA.

It appears that the EAs strictly apply particular threshold requirements set by the EA provisions. These threshold issues are applicability, jurisdiction and admissibility, and are dealt with in Section B of the Report. The number of cases that involve these thresholds reflects their importance. After examining these three threshold issues, the EA will go forward with analysing the merits as to the urgency of the relief sought.

These mentioned thresholds are summarised below:

Applicability of the ICC Rules

This prong is referred to as the “applicability test” of the EA provisions. The President of the ICC Court shall consider the information available in the application and decide whether the EA provisions apply with reference to Articles 29(5) and 29(6) of the ICC Rules. The President rarely exercises his power to reject applications, and mostly allows applications to proceed with the EA’s final determination on threshold issues.

Jurisdiction of the EA

The EA shall be entitled to determine whether it has jurisdiction to order emergency measures. The “jurisdictional test” should also include whether an arbitration agreement exists.

Multi-tiered dispute resolution clauses are of particular importance since many jurisdictional challenges have been raised within this context. There have been 33 cases in which the EA’s jurisdiction was contested.[10]

Admissibility of the Application

The “admissibility test” would refer to the need of “urgent interim or conservatory measure that cannot await the constitution of an arbitral tribunal.” This is also the requirement foreseen in Article 29(1) of the ICC Rules. 

The EA provisions do not explicitly mention the law applicable to threshold issues.[11] In most cases, the EAs do not consider themselves bound by the lex contractus but rather conduct their determination with the guidance of the relevant national law and/or the lex arbitri.

Section C of the Report deals with procedural matters. This section discusses the EA proceedings from the transmission of the file to the EA until the rendering of the order.

Pursuant to Article 5(2) of Appendix V to the ICC Rules, the EA may conduct the proceedings in the manner in which the EA considers to be appropriate. This provision clearly gives the EAs wide discretion. The most important restriction in this context relates to the time limit foreseen in the ICC Rules. Unless an extension of time has been granted, the EA should render a decision within 15 days of transmission of the file.

In section D of the Report, the substantive standards the EA’s may consider have been examined. The substantive criteria for granting emergency relief that an EA may consider may be listed as urgency, likelihood of the success on the merits, risk of irreparable harm, risk of aggravation of the dispute and proportionality of the measure sought.[12] Particularly, the requirement related to urgency is a high standard. These criteria should be familiar to parties as they are usually required under national laws as well. Additionally, it is noted that EAs also regard secondary considerations such as whether security should be provided pursuant to Article 28 of the ICC Rules or simply whether the relief sought is appropriate.[13]

Conclusion

It is also important to note that ex parte emergency orders are incompatible with the ICC EA provisions on the grounds that the respondent does not have the opportunity to be heard.[14] Therefore, in such cases, the only viable option is applying to state courts.

Parties should also consider the enforcement of the EA’s decision, which is still problematic.[15] This topic is covered in Section IV of the Report.

The Report provides useful guidance for all parties and should be examined by applicants prior to making an application for an interim measure. It further provides possible solutions to certain problems that have been identified by the contributors.

 

[1] For the full report, please see: https://iccwbo.org/publication/emergency-arbitrator-proceedings-icc-arbitration-and-adr-commission-report/ (Accessed: February 2020).

[2] Please see para 3 of the Report. Approximately 40 more applications have been filed after the Report was published.

[3] Please see Section G of Annex I of the Report.

[4] Please see para 9, 87 et seq. of the Report.

[5] Please see paras 9 and 71 of the Report.

[6] Please see paras 9 and 62 of the Report.

[7] Please see para 59 of the Report.

[8] Please see para 7 of the Report.

[9] Işık, Fatih,The New Emergency Arbitrator Procedure Under The ICC 2012 Rules, Erdem&Erdem Newsletter, June, 2013http://www.erdem-erdem.av.tr/publications/law-post/the-new-emergency-arbitrator-procedure-under-the-icc-2012-rules/

[10] Please see para 79 of the Report.

[11] Please see para 89 et seq. of the Report.

[12] Please see para 151 et seq. of the Report.

[13] Please see para 34 of the Report.

[14] This is the finding of the Task Force in para 24 of the Report.

[15] Except for Hong Kong, New Zealand, and Singpore, where national law expressly provides for the enforcement of EA orders, Please see para 36 of the Report.