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The European Arbitration Review 2017

Switzerland

On 1 January 2012, the amended version of the ICC Arbitration Rules (ICC Rules) came into force. One of the most significant changes in the revised ICC Rules was the introduction of an emergency arbitrator mechanism in article 29 and appendix V of the ICC Rules,1 providing the parties to an arbitration agreement subject to the ICC Rules with the possibility to obtain urgent interim or conservatory measures that cannot await the constitution of an arbitral tribunal from an emergency arbitrator. Under the previous provisions, the 1998 ICC Arbitration Rules, a party in need of pre-arbitral relief before the arbitral tribunal had been constituted had no choice but to apply to a state court.2 This might, however, be an unsatisfactory option for a variety of reasons, especially if the parties distrust the state court of the relevant jurisdiction.3

These changes to the ICC Rules are not an isolated development. Rather, most established and often used arbitration institutions have, in recent years, taken similar steps: in addition to the ICC, inter alia, the Stockholm Chamber of Commerce (SCC),4 the International Center for Dispute Resolution of the American Arbitration Association (ICDR/AAA),5 the Hong Kong International Arbitration Centre (HKIAC),6 the Swiss Chambers' Arbitration Institution (SCAI),7 the Singapore International Arbitration Centre (SIAC)8 and the London Court of International Arbitration (LCIA)9 provide for the possibility to obtain urgent interim relief from an emergency arbitrator.10

If we primarily focus on the provisions in the ICC Rules, this is to reflect the worldwide significance of the ICC as an institution; similar arguments and comments could be made about the provisions and proceedings under all the other rules, which include emergency arbitrator provisions.

The purpose of emergency arbitrator provisions

Interim measures aim to protect a party's rights before and during the pendency of proceedings on the merits.11 It corresponds to international best practice that an arbitral tribunal has the power to grant interim measures.12 Most arbitration rules13 and national arbitration laws14 provide for the power of arbitral tribunals to order provisional measures. However, an arbitral tribunal may obviously only exercise its power to issue provisional measures once it has been constituted. As a consequence, prior to the implementation of emergency arbitrator provisions by arbitral institutions such as the ICC, a party in need of interim measures before the arbitral tribunal had been constituted had no choice but to resort to state courts.15 In some instances, however, applying to state courts might not be possible, for example where the parties have validly agreed to exclude any state court jurisdiction, including the power to order provisional measures.16 Even where it is possible to apply to state courts for interim relief, doing so often is not in the parties' best interests.17 Usually, parties entered into an arbitration agreement because they wanted their dispute to be heard in a neutral forum at a neutral venue,18 and because they intended to avoid being subject to the often intangible, time-intensive and perhaps even distrusted jurisdiction of state courts,19 the latter likely to be the case if the competent court is the home court of the other party.20 Further, parties often chose arbitration as their means of dispute resolution because they intended to have their disputes resolved in a confidential forum (and not in public state court proceedings),21 because of the special expertise of arbitral tribunals which state courts may not have in a given case,22 and because certain types of interim measures may be obtainable from arbitral tribunals, but not from the competent state courts, the latter being bound by their lex fori regarding the possible content of interim relief.23

For these reasons, besides the ICC, various leading international arbitration institutions mentioned above currently provide for the possibility to obtain interim relief from an emergency arbitrator. This option, however, does not prevent parties from seeking urgent interim relief from a competent state court before the constitution of the arbitral tribunal.24

The predecessor to these modern emergency arbitrator provisions was the procedure under the 1990 ICC Pre-Arbitral Referee Rules, which have not been abrogated by the ICC's Emergency Arbitrator Provisions. Although they have been relied on sparingly in the past,25 they remain an option for parties in need of interim relief prior to the constitution of the arbitral tribunal.26

Automatic application of the emergency arbitrator provisions

Parties who have agreed to ICC arbitration prior to 1 January 2012 are free to agree that the Emergency Arbitrator Provisions shall apply; such agreement ‘would need to be clearly recorded in writing'.27 If there is no such agreement, the Emergency Arbitrator Provisions do not apply.28 However, parties who have agreed to ICC arbitration on or after the date when the revised ICC Rules came into force (ie, on or after 1 January 2012) do not expressly have to agree on the application of the Emergency Arbitrator Provisions.29 Quite the contrary: if these parties do not want the provisions to apply, they have to expressly state so (ie, opt out),30 failing which the Emergency Arbitrator Provisions apply automatically to them. For parties wishing to opt out, the ICC suggests the addition of the phrase ‘The Emergency Arbitrator Provisions shall not apply' at the end of the ICC's standard arbitration clause;31 however, ‘Any other clear language would suffice, whether specified in the arbitration agreement itself [...] or elsewhere'.32

The emergency arbitrator rules of other institutions apply to all arbitrations commenced on or after the date on which the relevant emergency arbitrator provisions entered into force - as an example, the Swiss Rules can be mentioned.33

The ‘signatories' or ‘successors to such signatories' requirement

The emergency arbitrator provisions only apply to parties that are ‘either signatories of the arbitration agreement under the ICC Rules that is relied upon for the application or successors to such signatories'.34

On the one hand, article 29(5) ICC Rules aims to ensure that only a party that has clearly agreed to arbitration under the ICC Rules will be drawn into emergency arbitrator proceedings as a respondent.35 A successor should only be able to benefit from the Emergency Arbitrator Provisions if it submits ‘unambiguous documentary evidence of a successor-signatory relationship'.36 The requirement that a party must be a signatory to the arbitration agreement under the ICC Rules excludes the possibility that an emergency arbitrator would accept jurisdiction where it could only be based on so-called extension-theories (ie, it excludes the risk that a party could be drawn into emergency arbitrator proceedings if it has only accepted the arbitration agreement by reference or tacitly,37 for example, by simply participating in the negotiation or the performance of a contract containing an ICC arbitration agreement, but without having signed either the agreement containing the arbitration agreement or the arbitration agreement itself).38

On the other hand, article 29(5) ICC Rules has the effect that the Emergency Arbitrator Provisions do not apply to treaty-based arbitrations, specifically treaty-based investment arbitrations,39 where the proceedings are not based on individual arbitration agreements signed by the parties,40 but on bilateral investment treaties, or where the host state's offer to consent to arbitration is contained in its national investment law and accepted by the investor, for example, by submitting a request for arbitration.41

Article 29(5) ICC Rules has led to the inadmissibility of an application for emergency measures under the ICC Rules where the applicant named two responding parties: the successor of a signatory and the successor's parent company. The president of the ICC Court decided that the Emergency Arbitrator Provisions did not apply to the parent company, but allowed the matter to proceed between the applicant and the signatory's successor.42

The practice shows: the procedure works

If one applies the time limits indicated in the ICC Rules, the typical emergency procedure will look as follows:

Day 1: Application for emergency measures

  • The application must include, inter alia, the reasons why the applicant needs urgent interim or conservatory measures that cannot await the constitution of an arbitral tribunal, and proof of payment of US$40,000 (article 1[3b, h] Appendix V ICC Rules).

Day 1-3: Preliminary assessment by the President of the Court and notification

  • If the President of the Court is satisfied that the emergency arbitrator rules apply with reference to article 29(5) and article 29(6) ICC Rules, the Secretariat transmits a copy of the application to the responding party (article 1[5] Appendix V ICC Rules).

Day 3: Appointment of emergency arbitrator

  • As soon as possible, normally within two days from the receipt of the application for emergency measures, the President of the Court shall appoint an emergency arbitrator (article 2[1] Appendix V ICC Rules).

Day 5: Procedural timetable

  • The Secretariat transmits the file to the appointed emergency arbitrator, which must then establish a procedural timetable within as short a time as possible, normally within two days from the transmission of the file to him or her (article 5[1] Appendix V ICC Rules).

Day 6: Challenge of the emergency arbitrator

  • A party that wants to challenge the emergency arbitrator must do so within three days from receipt of the notification of the appointment (or within three days of becoming informed of the facts on which the challenge is based) (article 3[1] Appendix V ICC Rules).

Day 11: Request for Arbitration

  • A Request for Arbitration must be submitted within 10 days of the receipt of the application for emergency measures by the Secretariat, failing which the President of the Court will terminate the emergency arbitrator proceedings (article 1[6] Appendix V ICC Rules).

Day 18: Order of the emergency arbitrator

  • The emergency arbitrator issues a reasoned, dated and signed decision no later than 15 days from the day of transmission of the file to him or her (article 6[3,4] Appendix V ICC Rules).
  • The time limit of 15 days may be extended by the President of the Court (article 6[4] Appendix V ICC Rules).
  • Under the ICC's emergency arbitrator provisions, the emergency arbitrator must issue his or her decision in the form of an order (article 29[2] ICC Rules).
  • The order will not be scrutinised by the ICC Court.

A practical case from Switzerland43 can illustrate how, in reality, this can work. As mentioned earlier, the provision on emergency relief (article 43 Swiss Rules) was introduced to the revised Swiss Rules of International Arbitration on 1 July 2012.

The first application for such emergency relief was submitted on 4 February 2014. On the same day, the Chambers contacted five potential candidates for emergency arbitrator. Two of the five indicated their availability, and a Belgium arbitrator was appointed and obtained the file on 6 February 2014. The next day, the arbitrator held a conference call with the parties to discuss procedural rules and the timetable for the proceedings. Subsequently, the answer to the request was filed on 11 February 2014, the reply on 13 February 2014 and the rejoinder on 15 February 2014. Finally, a hearing took place on 18 February 2014 and the parties had the occasion to file cost statements the next day. The decision of the emergency arbitrator, who partially granted the request for emergency relief, was issued on 20 February 2014.

In total, the entire proceedings took 16 days and the 15-day time limit set out in article 43(7) of the Swiss Rules, which runs from the day on which the Secretariat transmits the file to the emergency arbitrator (which happened on 6 February 2014) was respected. Although the timing was tight, it is possible to live up to the procedural guidelines. What is needed, however, is an emergency arbitrator who is able to devote two weeks to the proceedings and a respondent who participates, otherwise the task might not be achievable. In the case used as an example, one possibility to further streamline the proceedings would have been not to allow the parties to submit written reply and rejoinder, but deal with them at the oral hearing - this would have cut out four days from the proceedings.

In contrast to the emergency arbitrator rules contained in the Swiss Rules,44 the ICC's Emergency Arbitrator Provisions do not allow that the emergency arbitrator ‘in exceptional circumstances' (ie, in cases of ‘extreme urgency')45 orders emergency measures before the application for emergency measures is notified to the respondent party.46 As a consequence, where interim measures are only effective if they come as a surprise to the respondent party, the applicant party still has no choice but to apply to a state court.47

Conclusions

As of the end of 2014, 14 Applications for Emergency Measures had been registered with the ICC: two in 2012, six in 2013 and six in 2014.48 While these figures, which are quite similar to those concerning other arbitral institutions,49 might appear very modest compared with the number of Requests for Arbitration filed and the arbitral awards rendered during the first two years after the entry into force of the revised ICC Rules on 1 January 2012, it is important to note that emergency arbitrator proceedings are not intended to be used in extenso; moreover, it can be assumed that parties require emergency measures only in rather exceptional cases.50 It is nevertheless important that emergency arbitrator rules such as the ones of the ICC prove efficient in the exceptional circumstances they were adopted for (ie, in cases where a party needs urgent interim or conservatory relief before the constitution of the arbitral tribunal) and applying for such measures before a state court is either not open to the relevant party or is not in its best interests.

The ICC's Emergency Arbitrator Provisions meet this objective, especially due to the fact that they apply on an opt-out basis.51 At the same time, they do not fail to protect the respondent party from the risk of abuse by the applicant party, especially by requiring the applicant party to make a substantial advance on costs52 and to file a Request for Arbitration within 10 days of the Secretariat's receipt of the application for emergency measures, failing which the proceedings will be terminated.53 54 Further, they provide for the ‘signatories' or ‘successors to such signatories' requirement, thus avoiding that a party finds itself in emergency arbitrator proceedings as respondent without having unambiguously agreed to arbitration under the ICC Rules.55

The uncertainties regarding enforceability (which is a separate and fascinating topic that we cannot cover in this chapter) are, in our view, overstated. The pure awareness of the parties of the possibility to apply for emergency measures may influence how the parties behave and might even make a formal application before an emergency arbitrator redundant.56 As well as this, parties often voluntarily comply with decisions directed against them because they do not want to risk disadvantage in the dispute on the merits, and it is argued that this is more likely the clearer and more convincing an emergency arbitrator's reasoning is in his or her decision.57 The ultimate solution would be to have an international treaty - similar to the NYC - that deals with the recognition and enforcement of decisions of emergency arbitrators (and decisions of arbitral tribunals on interim measures).58 For the time being, it must be sufficient to note that the lex arbitri of several countries include provisions providing for the recognition and enforcement of interim measures ordered by an arbitral tribunal.59

Notes

  1. Article 29 ICC Rules is the core provision setting the framework for the emergency arbitrator mechanism under the ICC Rules (Voser, p. 812). Appendix V ICC Rules (Appendix V) contains the detailed procedural rules governing the emergency arbitrator proceedings (Voser/Boog, p. 82). Articles 29(1) - 29(4) ICC Rules and Appendix V are in the following collectively referred to as ‘Emergency Arbitrator Provisions', as defined in article 29(5) ICC Rules.
  2. Voser/Boog, p. 82; Palay/Landon, p. 1.
  3. Palay/Landon, p. 1.
  4. Article 32 and Appendix II SCC Rules (2010).
  5. Article 6 ICDR/AAA Rules (2014).
  6. Article 23(1) and Schedule 4 HKIAC Administered Arbitration Rules (2013).
  7. Article 43 Swiss Rules (2012).
  8. Article 26(2) and Schedule 1 SIAC Rules (2013).
  9. Article 9B LCIA Rules (2014).
  10. Ehle, p. 90; Palay/Landon, p. 1; Bose/Meredith, p. 186. Other institutions providing for emergency arbitrator proceedings are the Ljubljana Arbitration Centre at the Chamber of Commerce and Industry of Slovenia (article 38 in connection with Appendix III LAC Rules (2014)) and the World Intellectual Property Organization (article 49 WIPO Rules (2014)).
  11. Born, p. 2425; Boog, Interim Measures, N 1.
  12. Boog, Interim Measures, N 3; Berger/Kellerhals, N 1124; see also Arts. 17-17J UNCITRAL Model Law on International Commercial Arbitration with amendments as adopted in 2006.
  13. See, for example, article 28 ICC Rules, article 25 LCIA Rules (1998), article 26 Swiss Rules (2012) and article 26 UNCITRAL Rules (2010).
  14. See, for example, article 183 of the Private International Law Statute of 18 December 1987; see also Fouchard/Gaillard/Goldman, N 1315; Lew/Mistelis/Kröll, N 23-15.
  15. Shaughnessy, p. 337.
  16. Palay/Landon, p. 1. Such exclusion is admissible at least in some jurisdictions, such as, for example, Switzerland (Boog, ASA Bull, p. 463, with further references).
  17. Ehle, p. 89; Shaughnessy, p. 337.
  18. Castineira, N 3; Reiner/Aschauer, N 591.
  19. Ehle, p. 89; Fry/Greenberg/Mazza, N 3-1052.
  20. Castineira, N 3.
  21. Ehle, p. 89; Voser/Boog, p. 82.
  22. boog, ASA Bull, p. 464.
  23. Boog, ASA Bull, p. 464; Fry/Greenberg/Mazza, N 3-1052.
  24. See, for example, article 29(7) ICC Rules, article 43(1) in connection with article 26(5) Swiss Rules (2012), article 49(i) in connection with article 48(d) WIPO Rules (2014) and article 26(3) SIAC Rules (2013). Note that under the ICC Rules, after having applied for emergency relief, access to courts for interim relief is only possible ‘in appropriate circumstances' (article 29(7) ICC Rules, first sentence).
  25. Gaillard/Pinsolle, p. 14.
  26. Baigel, p. 4.
  27. Fry/Greenberg/Mazza, N 3-1064.
  28. Article 29(6)(a) ICC Rules. This rule is an exception to the general rule contained in article 6(1) ICC Rules (Fry/Greenberg/Mazza, N 3-1100), the latter providing that ‘where the parties have agreed to submit to arbitration under the Rules, they shall be deemed to have submitted ipso facto to the Rules in effect on the date of commencement of the arbitration'. The emergency arbitrator rules of other institutions such as, for example, the ones of the SCAI and the SCC apply to all arbitrations commenced on or after the date on which the relevant emergency arbitrator provisions entered into force (Castineira, N 23; Meier, N 3).
  29. Reiner/Aschauer, N 590.
  30. Article 29(6)(b) ICC Rules; Fry/Greenberg/Mazza, N 3-1055.
  31. Boog, N 19. The ICC's standard arbitration clause reads as follows: ‘All disputes arising out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules'.
  32. Fry/Greenberg/Mazza, N 3-1101.
  33. See article 1(3) Swiss Rules.
  34. Article 29(5) ICC Rules.
  35. Fry/Greenberg/Mazza, N 3-1098.
  36. Castineira, N 30; see also Voser, p. 816.
  37. Reiner/Aschauer, N 609; Voser, p. 816.
  38. Castineira, N 28.
  39. Reiner/Aschauer, N 612; Voser, p. 817.
  40. Voser, p. 817.
  41. Reiner/Aschauer, N 612; Castineira, N 32-37.
  42. Carlevaris/Feris, p. 29.
  43. Described in Newsletter 2/2014 of the Swiss Chambers Arbitration Institution.
  44. Article 43 in connection with article 26(3) Swiss Rules (2012).
  45. Ehle, p. 98; similarly Palay/Landon, p. 3.
  46. Article 1(5) Appendix V; similarly Boog, Appendix V, N 16.
  47. Ehle, pp. 97 et seq; see, however, Fry/Greenberg/Mazza, N 3-1058-d, arguing that although it is not expressly mentioned in the ICC Rules, it is not excluded that the emergency arbitrator issues ‘an initial order (eg, a freezing order […]) before the responding party has filed its response', provided that the responding party gets an opportunity to comment immediately after the rendering of the initial order so as to ensure that the proceedings comply with article 5(2) Appendix V ICC.
  48. See www.iccwbo.org/Products-and-Services/Arbitration-and-ADR/Arbitration/Introduction-to-ICC-Arbitration/Statistics/.
  49. Ehle, pp. 102-105.
  50. Ehle, p. 90.
  51. Voser/Boog, p. 82; see also 3 above.
  52. Article 7(1) Appendix V.
  53. Article 1(6) Appendix V.
  54. Voser/Boog, p. 84; Castineira, N 125; Ehle, p. 107.
  55. Article 29(5) ICC Rules; see also Voser/Boog, p. 85.
  56. Similarly Werdnik, p. 283.
  57. Castineira, N. 116.
  58. Ehle, p. 109; Werdnik, p. 283, with further references
  59. See, for example, article 183(2) of the Swiss PIL, § 1041(2) of the German Code of Civil Procedure, or article 42(1) of the English Arbitration Act.

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