“Fast track” arbitration and the need for interim relief

The “fast tracking” of a dispute towards resolution is not a new feature of arbitration. Historically, disputes between merchants could be quickly resolved by reference to guilds or experts. In modern times, arbitral parties have the option to agree to an expedited arbitration timetable, subject to the availability of their arbitrator of choice. However, reliance on a consensus means a recalcitrant party can tactically choose to withhold its agreement to delay both the arbitral proceedings as well as the issue of the award. A delay could result in keeping the other party out of funds and subject it to possible cash-flow and payment problems.

In addition to the need to fast track proceedings, parties may also require certain orders to preserve the status quo in the interim between the dispute arising and the commencement of arbitration. The orders sought by parties will, in effect, achieve the following reliefs:-  

  1. securing the assets which form the basis of the dispute; or
  2. preserving evidence (documents, property) to support their claim.  

Parties have the option of applying to domestic courts for orders to effect the above interim reliefs. However, this is a step outside the forum of arbitration which they may be reluctant to take due to:-

  1. unforeseeable outcomes and other risks when litigating in jurisdictions foreign to one of the parties;
  2. unpredictable delays once the dispute enters the judicial system;
  3. procedural complexities and lack of finality due to the possibility of appeals through the court hierarchy; and
  4. lack of confidentiality.  

Major arbitral institutions have taken note of these needs and, to maintain their competitive edge, they have recently revised their rules to provide for pre-appointment emergency reliefs. The Singapore International Arbitration Centre (“SIAC”) updated its rules in July 2010 and the 4th edition rules (“SIAC 2010 Rules”) introduced two new measures:-

  1. an expedited procedure under Rule 5 (“Expedited Procedure”); and
  2. a procedure for pre-appointing and designating an emergency arbitrator to provide emergency reliefs under Rule 26 and Schedule 1 (“Emergency Arbitration”).

SIAC expedited procedure

A party may apply to the SIAC for the Expedited Procedure if the conditions set out in Rule 5.1 of the SIAC 2010 Rules are met:-  

  1. the aggregate amount in dispute (i.e. total of the claim, counterclaim and set-off defence) is less than S$5 million;
  2. the parties agree; or
  3. the case is of “exceptional urgency”.  

The SIAC Chairman will take into account the views of both parties when deciding if the expedited procedure is appropriate and the arbitral award shall be made within six months unless time is extended by the SIAC registrar (Rule 5.2(d)). If the Chairman decides it is appropriate to expedite the arbitration, the following procedures will apply:-

  1. the SIAC Registrar may shorten any time limits under the SIAC 2010 Rules, such as appointment of arbitrator (Rule 6.4), conduct of proceedings (Rule 16), submission by parties (Rule 17) and hearings (Rule 21);
  2. the case will usually be referred to a sole arbitrator, unless the Chairman determines otherwise;
  3. the arbitrator will hear all facts, witnesses (including expert witnesses) and oral arguments at the hearing, unless the parties previously agreed to a documents-only arbitration; and
  4. the tribunal will give its reasons for the award in summary form unless the parties agree to waive this requirement.  

This new “fast-tracked” option appears to be popular: of the 88 arbitrations filed at the SIAC after the SIAC 2010 Rules came into effect, 20% have used the new Expedited Procedure.

SIAC emergency arbitration

Rule 26.2 of the SIAC 2010 Rules is similar to the International Centre for Dispute Resolution’s Article 37 on Emergency Measures of Protection and it allows a party to apply for the Emergency Arbitration at any time after filing of a notice of arbitration prior to the tribunal being constituted.

The procedure is set out in Schedule 1:-

  1. the applicant has to notify the Registrar and other parties of the nature of the relief sought, giving reasons why such relief is sought on an emergency basis and why the party is entitled to such relief;
  2. this notice may be given by email, fax or other reliable means; and
  3. the applicant has to pay the SIAC application fee.

If the Chairman accepts the application, the Chairman will appoint an emergency arbitrator from a panel of candidates (who have indicated in advance their availability) within one business day (“Emergency Arbitrator”). Parties have another one business day to challenge the appointment of the Emergency Arbitrator and set out the grounds. Within two days of appointment, the Emergency Arbitrator will set out a schedule to consider the application for emergency relief.

The Emergency Arbitrator is empowered to make orders for interim injunctive relief and for the protection or conservation of property, as well as make any preliminary order prior to the Emergency Arbitrator’s consideration of the application for emergency relief. The Emergency Arbitrator may also issue any alternative emergency interim order necessary to maintain the status quo between the parties in the face of any changes in the parties’ circumstances after appointment of the Emergency Arbitrator or the issue of any preliminary order.

Proceedings need not be formal and can proceed by way of telephone conference or written submissions. Any order made by the Emergency Arbitrator will last until the tribunal is constituted or, if the tribunal is not constituted, for 90 days after the grant of interim relief. If a tribunal is constituted after the Emergency Arbitration, the tribunal will not be bound by any reason given by the Emergency Arbitrator. Instead, the tribunal may reconsider, modify, or vacate any of the Emergency Arbitrator’s interim orders.

Emergency arbitration: the Rodyk experience

Between the time the 2010 Rules come into effect and up to May 2012, there have been six applications for Emergency Arbitration made and accepted by the Chairman. Rodyk represented the respondent at the sixth such application. The claimant had applied for interim relief in the form of a mareva injunction, i.e. an order to restrain the respondent from disposing its assets, based on a real risk of dissipation of those assets.

The total time taken from application to the Emergency Arbitrator’s issue of the award was seven days, and the timeline and procedure is summarised below:-  

Click here to view the table.

The International Arbitration (Amendment) Bill

Amendments to the International Arbitration Act were introduced in March 2012 and are expected to pass into law by end-2012. After the amendments have the force of law, orders made by Emergency Arbitrators will be accorded the same legal status and powers as a conventionally constituted tribunal. Parties will be able to obtain supporting orders from Singapore courts as any order issued by an Emergency Arbitrator, whether in Singapore or abroad, will be ordinarily enforceable in Singapore.