The When, Where and How of Emergency Arbitration


Emergency arbitration is a process that has been incorporated into many institutional rules to offer parties the opportunity for remedy in exigent circumstances. Where parties have contracted for arbitration, but require assistance prior to the constitution of a tribunal, an application may be made to the institution for assistance from an emergency arbitrator.


By way of example, AAA (see Commercial Arbitration Rules, R-38), ICDR (see International Arbitration Rules, Article 6), ICC (see Arbitration Rules, Article 29) and CPR (see Administered Arbitration Rules, Rule 14) all provide for emergency procedures.


While there is nuance among the various institutional processes, the following general outline demonstrates how and when the process may be initiated and concluded.


Criteria

While “emergency” remains a largely subjective term, this process is generally available if (1) the application demonstrates some urgency (for example relating to shareholder meetings, property distribution, board of directors removal or reinstatement, etc.); (2) that requires immediate attention, and thus cannot wait for the traditional arbitrator appointment process; (3) and the underlying contract calls for arbitration under the rules of the institution receiving the emergency application.


All of the rules provide that emergency arbitration will be available to parties who have opted in to the respective arbitral rules unless parties specifically agreed to opt out of the emergency arbitration provision.


Additional guidance relating to the standards of review, jurisdictional issues and procedural matters is included in the ICC Commission Report on Emergency Arbitrator Proceedings.


Application

To initiate emergency arbitration, the aggrieved party must submit an application to the institution that outlines the request for emergency relief sought and the reasons for the application, detailing the exigence of the matter. All other parties must be previously or simultaneously notified as well.


Applications for emergency measures may generally precede the filing for arbitration, though parties should take care to review the respective institutional process for doing so.


Arbitrator Appointment

In the interests of efficiency, arbitrators are appointed by the institution for emergency arbitration proceedings (though objections may be filed). Appointments occur immediately after notice is received by the institution – usually within one day.


Hearing Process

To facilitate an expeditious resolution of the process, emergency arbitration may be conducted in a manner most efficient for the resolution of the process – meaning via online or telephone conference in place of face to face meeting, as needed.


Following the rapid appointment process, most institutions report that the entire emergency arbitration process may be concluded within a matters of days or weeks in more complicated matters.


Conclusion

Emergency arbitration may conclude with an order issued by the emergency arbitrator or via interim award.


Once the emergent issue is resolved, the emergency arbitrator may continue service as arbitrator in the subsequent proceedings. Or, perhaps more typically, the emergency arbitrator will be discharged of duties as the new tribunal is constituted.


In terms of utilization, AAA-ICDR reports that 60 case were submitted for emergency arbitration in 2018 alone. Further, the ICC recently reported that 95 cases have been routed to emergency arbitration since the procedures were adopted in 2012 (as reported here), with a significant uptick in applications over the past four years.


Despite the convenience offered by this process, some party hesitation to leverage emergency arbitration remains. Concerns mainly relate to worries over enforcement of interim awards or orders, and whether these are covered under the New York Convention. Nevertheless, the institutions report that most interim awards or orders resulting from emergency arbitration are complied with voluntarily.


In terms of process advantages, emergency arbitration can be an effective tool in addressing problems that require immediate attention, particularly where a court application would likely meet delay or the relief sought is otherwise unavailable.