When a party needs emergency interim relief it tends to look straight to the courts for help, whether or not it has an agreement to arbitrate disputes with the other party. However, most of the major arbitral institutions now offer an emergency interim relief procedure which should not be overlooked.
Rule 26.2 read together with Schedule 1 of the Singapore International Arbitration Centre (“SIAC“) Rules allows parties to apply for the appointment of an emergency arbitrator prior to the appointment of the arbitral tribunal. The appointed emergency arbitrator has the power to order or award any interim relief he/she deems necessary.
The application for the appointment of an emergency arbitrator can be made alongside or following the filing of a Notice of Arbitration and the Chairman of the SIAC will consider whether such an application is appropriate. If the Chairman accepts the application, he will appoint an emergency arbitrator within one business day and that emergency arbitrator will, within two business days, establish a timetable for consideration of the emergency relief sought.
Before the amendments to the International Arbitration Act (“IAA“) were passed by Parliament in April 2012 (see our blog post on this here), there had been only four applications for an emergency arbitrator pursuant to Rule 26.2 of the SIAC Rules. However, since the amendments were passed (which give emergency arbitrators the same legal status and powers as that of any other arbitral tribunal and ensure that orders made by emergency arbitrators are enforceable under the IAA regime), there have been a further four applications and the number of applications is only likely to increase.
One application in 2011 was received by the SIAC a few days before Chinese New Year. The application related to a cargo of coal at a Chinese port which was rapidly deteriorating. The Applicant contacted the SIAC in the morning indicating its intention to file the application, filed its papers at 2pm and by 5pm an arbitrator of neutral nationality was appointed. The arbitrator gave his preliminary directions that same evening, a hearing was scheduled for the next day, and an order made. Pretty impressive timings!
Emergency interim relief in arbitrations is particularly useful where the jurisdiction in which the dispute is to be determined does not have an efficient or reliable court system. Yet, while the ability to apply for the appointment of an emergency arbitrator may offer a suitable alternative to court action in some situations, there will still be cases where it may be appropriate for parties to apply to court for interim relief. For example, under the SIAC Rules, emergency interim relief in an arbitration can only be made inter partes and so when for tactical reasons, an application needs to be made without notice to the other party, court action will be the preferred option. Furthermore, parties cannot apply for emergency interim relief in an arbitration against third parties who have not signed up to the arbitration.