Emergency arbitrator applications in international arbitration have become increasingly common in Singapore. Since July 2010, there have been 37 emergency arbitrator applications filed at SIAC. Emergency arbitrators, who may be appointed as quickly as within one business day, are able to hear and, if appropriate, grant urgent interim relief in advance of the constitution of the arbitral tribunal.
Considering that SIAC has made 37 emergency arbitrator appointments since the inclusion of the emergency arbitrator procedure in the SIAC Rules in July 2010, parties are becoming increasingly familiar with and reliant on such proceedings as a viable means to obtain urgent interim relief. Emergency arbitrator proceedings (at times alongside court proceedings) have led to a high level of compliance in cases where the relief sought was granted – thus confirming the emergence of emergency arbitrator proceedings as an effective means of obtaining swift relief in an increasingly fast-paced world.
Definition of an SIAC emergency arbitrator
An SIAC emergency arbitrator is a person appointed to hear and decide applications for emergency interim relief filed by parties before the constitution of the tribunal in a SIAC arbitration. Under SIAC rules, if an application for emergency interim relief is accepted, the President of the SIAC Court of Arbitration shall seek to appoint an emergency arbitrator within one business day.
The person appointed as emergency arbitrator does not go on to become a member of the arbitral tribunal. The powers of the emergency arbitrator lapse as soon as the tribunal is constituted. Other than the SIAC Rules, recourse to an emergency arbitrator is also available under the current ICC, AAA–ICDR, SCC, HKIAC and KLRCA Rules.
The SIAC Rules stipulate that ‘the Emergency Arbitrator shall have the power to order or award any interim relief that he deems necessary’. Similarly, the Singapore International Arbitration Act provides that an emergency arbitrator may order any party to take such interim measure of protection as the emergency arbitrator may consider necessary given the subject matter of the dispute.
Among others, SIAC emergency arbitrators have issued asset freezing orders, both prohibitive and mandatory injunctions, orders for the preservation and inspection of evidence as well as anti-suit injunctions in the past.
The value of having recourse to an emergency arbitrator
The option of making an emergency arbitrator application is important as parties (typically claimants) may find themselves in a factual situation where they are in need of urgent interim relief, but the tribunal has not yet been appointed.
Recourse to an emergency arbitrator is particularly important when considering the amount of time the process of constituting a tribunal can take. This timeline may be substantially lengthened by an uncooperative respondent who is determined to delay the proceedings to the claimant’s detriment.
Depending on the type of dispute and the location of the parties, their assets and the subject matter of the dispute, parties may be not be able to approach the courts for the interim relief needed. This could be for several reasons: typical timelines in that court could be too long; because of confidentiality obligations under the contract; or because interim orders in aid of foreign-seated arbitrations (in general) or the specific interim relief needed are not available in the relevant jurisdiction.
The emergency arbitrator route does not necessarily exclude the possibility of making an application to the Singapore courts for interim relief. In addition, an application for interim relief may be made to the relevant foreign court, e.g. the court where the respondent’s assets are located. However, in the event that such recourse to the courts is not practicable or preferable, the option of making an emergency arbitrator application effectively becomes a lifeline for the claimant.
Recognition and enforcement
While an emergency arbitrator order is legally enforceable in certain jurisdictions, it does not enjoy the status and near global enforceability of an arbitral award under the New York Convention. Given that both the New York Convention and the UNCITRAL Model Law on International Commercial Arbitration
are silent on the definition of an arbitral award, it falls to each jurisdiction’s domestic legislation to set out what it would recognise as an award which it is required to enforce under the New York Convention.
Many jurisdictions require an award to be ‘final and binding’ on the substance of the dispute between the parties before it may be recognised and enforced. An emergency arbitrator order, however, is intended to deal only with the application for interim relief and, under the SIAC Rules, will cease to be binding unless the tribunal is constituted within 90 days of the date of the order. This leads to some doubt as to whether an emergency arbitrator order is enforceable in most jurisdictions.
As an example of Asian jurisdictions leading the way, both Singapore and Hong Kong have passed amendments to their respective arbitration statutes to provide for express recognition of emergency arbitrator orders. The Singapore International Arbitration Act has achieved this by expanding the definition of ‘arbitral tribunal’ in the Act to include an emergency arbitrator. Hong Kong, on the other hand, amended its Arbitration Ordinance by inserting Part 3A, which allows the recognition and enforcement of ‘[a]ny emergency relief granted, whether in or outside Hong Kong, by an emergency arbitrator under the relevant arbitration rules’.
A legislative peculiarity which has arisen, as a result of certain definition differences in each jurisdiction’s legislation, is that a Singapore-seated emergency arbitrator order would enjoy recognition and enforcement in Hong Kong, but not vice versa.
Another notable jurisdiction is the United States, where a number of judicial decisions have recognised and enforced interim relief granted in an arbitration, even interim relief ordered by an emergency arbitrator. A good example of this is Yahoo Inc v Microsoft Corporation.
In India, the Bombay High Court in HSBC PI Holdings (Mauritius) Ltd v Avitel Post Studioz Ltd considered the fact that an SIAC emergency arbitrator order had already been rendered in the arbitral proceedings between the parties in granting HSBC’s application for similar freezing orders before the court.
In practice, the efficacy of the emergency arbitrator process does not depend solely on the legal enforceability of such orders. Often, the most effective incentive to encourage compliance with an emergency arbitrator order is the risk that any uncooperative conduct may cast a negative light on the merits of a party’s case in the main dispute before the arbitral tribunal.
Emergency arbitrator proceedings do not provide a ‘slam dunk’ for all cases in all jurisdictions. However, this procedure is able to provide some effective solutions in urgent circumstances.
Also, the unavailability of an ex parte procedure before an emergency arbitrator (the SIAC Rules provide for ‘a reasonable opportunity to all parties to be heard’) removes the element of surprise which may be useful to a claimant, e.g. when in need of an asset freezing order. However, this problem is mitigated by the fact that a party’s conduct in the proceedings will be subject to direct scrutiny by both the emergency arbitrator and the arbitral tribunal subsequently.
Another limitation to emergency arbitrator proceedings is the unavailability of interim relief against third parties to the arbitration agreement, unlike in similar proceedings in court.