WHY AND WHEN ONE SHOULD OPT FOR AN EMERGENCY ARBITRATOR
On average, from the filing of a request for arbitration with an arbitral institution it takes approximately three or four months to constitute a tribunal. If the choice of arbitrator is challenged, that process may take even longer. However, sometimes a party wishes to prevent the other party from disposing of disputed assets or evidence. In order to do that, the party needs to obtain urgent interim relief at the outset of a dispute before the arbitral tribunal is constituted.
Traditionally, arbitration did not provide an opportunity to obtain interim relief until an arbitral tribunal was constituted. The only option was to seek such relief at a national court. However, in some cases, parties may be unwilling to approach a court – particularly if the court is in the home jurisdiction of the other party. To address this issue, many arbitral institutions have recently adopted special provisions that provide a mechanism for obtaining urgently-needed interim relief at the very outset of proceedings.
The Arbitration Institute at the Stockholm Chamber of Commerce
Since 1 January 2010, the Arbitration Institute at the Stockholm Chamber of Commerce (SCC) has provided an emergency arbitrator service that allow parties to seek interim relief not only prior to the constitution of the arbitral tribunal, but prior even to commencement of arbitral proceedings. The SCC Emergency Arbitrator Rules are incorporated into the Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce (SCC Rules). The emergency arbitrator option is in principle applicable to all SCC arbitrations, even if an arbitration agreement was concluded before 1 January 2010, unless the parties specifically agreed otherwise. However, it does not prevent a party from requesting the courts to grant interim measures.
Upon receipt of a request for the appointment of an emergency arbitrator, the SCC Secretariat immediately notifies the other party of the application because ex parte requests are not allowed. The SCC Board then appoints an emergency arbitrator within 24 hours of an application. The emergency arbitrator has the same powers to issue interim measures as an ordinary arbitrator, i.e., he may grant any interim measure that he finds appropriate. The emergency arbitrator shall deliver the decision within five days of the appointment. It may take the form of an order or an award and must be in writing, reasoned, dated and signed. Importantly, although that decision is binding on the parties, the subsequent arbitral tribunal is not bound by it.
Jul-Sep 2014 issue
Association for International Arbitration