ICC Emergency Arbitration Provisions as an Alternative to Qatar Court 17 April 2019
Emergency Arbitration Emergency Arbitration (“EA”) was introduced in the 2012 ICC Rules of Arbitration Article 29(1) of the Rules states: “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 the Emergency Arbitration Rules in Appendix V…” [Emphasis added] ICC Commission recently published a Report on this topic: “Emergency Arbitrator Proceedings”
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Emergency Arbitration is Emerging
There have been ninety five (95) EA cases to date The ICC’s Report is based on study of the first 80 EA cases: Half of the EA Applications related to the construction, engineering and
energy sectors; other industries include real estate, telecom, transport, natural resources, and more Seat of the EA:
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Forty-three (43) in Europe Twelve (12) in North America Ten (10) in Latin America Ten (10) in East and West Asia, including one (1) in Doha
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Emergency Arbitration Requests Mostly Non-Monetary Anti-Suit / Anti-Arbitrator Injunctions Maintaining status quo Preserving assets or property Demanding performance of contractual obligations (e.g., step-in rights) Restraining sale of stock or products due to alleged breach of contract Measures relating to corporate governance (e.g., composition of management, meetings, resolutions) Measures ordering security, or preventing a party from drawing down funds from a performance bond
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How it Works Filing an Application •
EA should not be confused with the ICC’s “Expedited Procedure”
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Contact the Secretariat at the ICC as soon as possible to alert them of your intention to file an EA application
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Make payment ($10,000 to cover the ICC’s admin expenses, and $30,000 for the emergency arbitrator’s fees and expenses)
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Appendix V to the ICC Rules contains the Emergency Arbitrator Rules, and Article 1(3) lists points to cover in the EA application, including emergency measures sought and reasons why you need urgent interim or conservatory measures that cannot wait until the constitution of an arbitral tribunal
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Submit EA application to the ICC’s dedicated email address for emergency applications
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How it Works First Level Review by ICC The ICC will decide whether the EA Rules apply by considering Articles 29(5) and (6) of the ICC Rules: 1. Parties to the EA application are signatories to the Arbitration
Agreement (no third party non-signatories) 2. Arbitration Agreement must have been entered into after 1 Jan 2012 3. The parties have not opted out of the EA provisions 4. The parties have not agreed to another pre-arbitral procedure (dispute
board provisions present thorny issue)
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How it Works Appointing the Emergency Arbitrator •
If the EA application satisfies Article 29’s requirements, the ICC will appoint an emergency arbitrator within two (2) days after receiving the EA application
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Statement of acceptance, availability, and impartiality and independence
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Three (3) days to challenge the appointment of the emergency arbitrator
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No provision exists in the EA Rules to suspend proceedings during a challenge
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To date, there have been four (4) challenges to an emergency arbitrator appointment; each challenge was dismissed
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How it Works The Proceedings •
Emergency arbitrator will establish a procedural timetable
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Proceedings usually begin within two (2) days after file transmitted to emergency arbitrator
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Within ten (10) days of ICC’s receipt of EA application, the applicant must file a Request for Arbitration (“RFA”) to arbitrate the merits, and EA application may be terminated by ICC if the applicant fails to comply
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Possible conflict between filing the RFA within ten (10) days and a tiered dispute resolution procedure in the underlying contract; requests for stay
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The EA Rules require the emergency arbitrator to issue order within fifteen (15) days from receiving the EA application; requests for extension made by emergency arbitrator with support from one or both parties
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Winning or Losing The Core Standard
• The urgent measures “cannot wait the constitution of an arbitral tribunal” Article 29(1) • The applicant must confirm “the reasons why it needs urgent interim or conservatory measures that cannot await the constitution of an arbitral tribunal” Appendix V, Article 1(3)(e)
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International Standards Various Arguments Each Side Should Consider Advancing •
Risk of irreparable harm
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Whether grant or denial of relief would aggravate and worsen the dispute
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Assessing likelihood of success on the merits while avoiding prejudgment
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Relative balance of inconveniences – which party will be harmed more by grant or denial of relief
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Emergency Measures Sought Types of Relief Requested •
Maintain status quo (51 cases)
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Specific performance under the contract (23 cases)
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Declaratory relief to resolve uncertainty going forward (10 cases)
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Transfer money to escrow account (7 cases)
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Interim payment (8 cases)
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Anti-Suit injunctions (6 cases)
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Emergency Arbitration Results Outcome of the first 80 cases 2 cases
Did not make it past the initial screening stage; rejected for not meeting basic EA criteria
9 cases
Did not result in an Order (reached settlement)
69 cases
Resulted in Orders
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10 cases rejected in whole (jurisdiction or admissibility) 36 cases received no relief 8 cases were granted all relief sought 15 cases were granted partial relief
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Enforcement Article 17 of the Arbitration Law states: (1) Unless the Parties agree otherwise, the Arbitral Tribunal may…issue provisional measures or interim awards that are dictated by the nature of the dispute, or for the purpose of preventing irreparable harm, including… (a) maintaining or restoring the status quo pending determination of the dispute; (b) adopting a measure to prevent the occurrence of current or imminent damage…; (c) providing a means of preserving the assets by means of which later awards may be executed; and (d) preserving evidence that could be important or material to the determination of the dispute…
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Enforcement
“[…] (3) The Party in whose favour the order for provisional measures or an interim award is issued may, after it obtains written permission from the Arbitral Tribunal, request the Competent Judge to order the enforcement of the order or award issued by the Arbitral Tribunal, or any part of it. […] The Competent Judge shall order the enforcement of the mentioned order or award, unless such order or award contradicts the law or public policy. (4) The Party who requests an interim measure or award shall be liable for any costs and compensation for any damages caused by such measure or award to any Party, if the Arbitral Tribunal subsequently decides that the measure or the award was not warranted by the circumstances…”
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Enforcement Chapter 7 of the Qatar Arbitration Law: Recognition and Enforcement of the Arbitral Award • Article 34 Arbitral awards are enforceable regardless of the country in which the award was issued • Must wait until deadline for annulment applications has lapsed •
• Article 35 •
Narrow grounds for annulment of awards
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Contacts
Tarek Saad Of Counsel (Doha) +974 4453 2516 tarek.saad@squirepb.com
Denise McLaughlin Senior Associate (Doha) +974 4453 2503 denise.mclaughlin@squirepb.com
Charbel Maakaron Managing Partner (Doha) +974 4453 2520 charbel.maakaron@squirepb.com
JosĂŠ Feris Partner (Paris) +33 1 5383 1160 jose.feris@squirepb.com
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