Emergency and Interim Relief Procedures in Arbitration

Most arbitral forums provide for interim and emergency relief procedures. Article 29 and Appendix V of the ICC Rules 2011 provide for an emergency arbitrator to be appointed upon application of a party to grant interim or conservatory relief before the Tribunal is constituted. The emergency arbitrator’s decision shall take the form of an order and the parties undertake to comply with any order made by the emergency arbitrator. After the constitution of the Arbitral Tribunal the emergency arbitrator’s order shall not bind the Arbitral Tribunal with respect to any question, issue or dispute determined in the order. The Arbitral Tribunal may modify, terminate or annul the order or any modification thereto made by the emergency arbitrator (Article 29(3)).

Article 29 ICC Rules is not intended to prevent any party from seeking urgent interim or conservatory measures from a competent judicial authority at any time prior to making an application for such measures, and in appropriate circumstances even thereafter, pursuant to the ICC Rules. The application for urgent interim or conservatory measures from a competent judicial authority shall not be deemed to be an infringement or a waiver of the arbitration agreement (Article 29(7)).

In the case at hand the Rotterdam District Court had to decide on its competence for injunctive relief requested by a party where an emergency arbitrator had already been appointed under the ICC Rules. According to Article 6(4) of Appendix V of the ICC Arbitration Rules the order shall be made by the emergency arbitrator no later than 15 days from the date on which the file was transmitted to him.

The Dutch proceedings

On 26 August 2016 Cofco Coöperatief U.A., the Dutch subsidiary of the Chinese state-owned food processing, manufacturing and trading conglomerate “Cofco”, entered into a Share Purchase Agreement (SPA) with Cygne B.V. in Rotterdam for the purchase of the remaining 49% of the shares held in Nidera, a major international agribusiness and trading company with an annual turnover of USD 18.5 billion (2015) in October 2014. Cofco had already purchased 51% of Nidera’s stock from Cygne. The closing of the transaction, which was subject to regulatory approvals, was agreed to take place in Amsterdam, the Netherlands, or at such other place as the parties might agree in writing. The SPA and any non-contractual obligation or other matter arising out of or in connection with the SPA was to be exclusively governed by and construed in accordance with the laws of the Netherlands. All disputes arising out of or in connection with the SPA or any agreement resulting therefrom or relating thereto was to be finally settled in accordance with the Rules of Arbitration of the International Chamber of Commerce (“ICC Rules”). The SPA was bringing Cofco’s ownership in Nidera to 100% and Cofco International Ltd. of Grand Cayman, Cayman Islands (“CIL”), was also a party to the SPA.

In November 2016 Cygne started proceedings in the Amsterdam District Court[1] for injunctive relief against Cofco and CIL in an attempt to obtain an order from the Court ordering Cofco and CIL to comply with certain provisions of the SPA and forbidding Cofco and CIL to invoke termination of the Agreement until a final award in the main proceedings in arbitration had been rendered which was no longer subject to setting aside proceedings. Subject to all substantive rights of defence Cofco and CIL have primarily asserted that the Dutch judge sitting in interim relief proceedings should declare himself not competent for reason that the decisions requested should be decided within the scope of the ICC Emergency Arbitration by virtue of the Arbitration Clause contained in Article 14.1 SPA.

Under the arbitration rules of the Dutch Code of Civil Procedure a court seized of a dispute in respect of which an arbitration agreement has been concluded shall declare that it has no jurisdiction if a party invokes the existence of said agreement before submitting a defence, unless the agreement is invalid. In this case the Amsterdam interim relief judge held that the Arbitration Agreement was valid as was not denied by either party. An arbitration agreement between parties shall not preclude a party from requesting the court to order a preliminary witness examination, a preliminary expert report, a preliminary on-site examination and viewing, or inspection of, a copy of or an extract from specific documents. This is a specific provision of the Dutch Code of Civil Procedure, Article 1022b. If a party invokes the existence of an arbitration agreement before submitting a defence, the court shall only declare that it has jurisdiction if the requested decision cannot, or cannot in a timely manner, be obtained in arbitration. The Amsterdam court did not follow the pleadings of Cygne that the ICC Emergency Arbitration pending could not lead to an award but only to an order which would not be enforceable in the Netherlands. According to the Amsterdam court unless the ICC emergency arbitrator would determine otherwise, a decision by him under request to grant provisional relief shall constitute an arbitral award to which the provisions about enforceability in the Dutch jurisdiction as contained in the provisions of Sections 3 to 5, inclusive, of the Dutch Code of Civil Procedure shall be applicable. The contents of the relief provided by the ICC emergency arbitrator is therefore decisive and not whether it is granted in the form of an order or an arbitral award. As it was not disputed by Sygne that the 15 days of Article 6(4) of Appendix V of the ICC Arbitration Rules would be applied strictly there was no room for anticipation in the proceedings brought by Sygne in the proceedings before the Amsterdam court. The relief sought was therefore denied.