Emergency Interim Relief
Sheppard, Ben H., Jr., Townsend, John M., Dispute Resolution Journal
The ICDR, a division of the American Arbitration Association, amended its International Arbitration Rules, effective May 1, 2006, to provide for the appointment of an emergency arbitrator to handle requests for interim arbitral relief prior to formation of the arbitral tribunal. This article discusses the rationale for this change in the rules.
Holding the Fort Until the Arbitrators Are Appointed: The New ICDR International Emergency Rule
The International Centre for Dispute Resolution (ICDR)1 has amended its International Arbitration Rules, effective May 1, 2006, to include a new rule providing for the appointment of an emergency arbitrator to take up requests for emergency relief that may be needed prior to the formation of the entire arbitration panel. Allowing a party to obtain such relief from an arbitrator provides an alternative to seeking interim relief through the courts. This article will discuss the reasons for the new rule and its principal features.
The Case for an Emergency Arbitrator Procedure
To place the issue in context, consider two hypothetical cases:
Case 1: Assume a commercial contract between parties from different countries with a broad arbitration clause specifying that all disputes arising from or related to the contract shall be decided by three arbitrators, two of whom will be appointed by each party and the third appointed by the two party-appointed arbitrators within 30 days after the appointment of the second party-appointed arbitrator. Assume further that arbitration has commenced and the entire arbitral tribunal has been appointed. Also assume that one of the parties argues that it needs emergency interim relief.
Why might such relief be needed? One reason might be to restrain a former employee's use of confidential customer lists to solicit company clients, thereby preserving the status quo pending arbitration of an employment contract dispute. Another might be to compel the owner of a construction project to make immediate progress payments to the general contractor because, without them, it would be unable to continue performance under the construction contract. Yet another might be to restrain one of the parties from making use of a licensed trademark in a way that the owner of the mark considers highly injurious.
International arbitral tribunals, once formed, have the authority under most major sets of rules to grant interim measures of protection, including injunctive relief or measures for the protection of property. This applies both in arbitrations administered by an arbitral institution2 and in ad hoc (i.e., non-administered) arbitrations.3 The rules of most domestic arbitration institutions contain similar provisions.4
Thus, the party seeking urgent interim relief in our hypothetical could, in the first instance, seek emergency relief directly from the arbitral tribunal without the need to initiate a separate court proceeding to obtain an injunction or other interim relief. Having arbitral interim relief available satisfies the expectation of parties who chose arbitration as the method to resolve disputes that might arise under an international contract, including the expectation that disputes will be decided in a neutral forum located outside the home countries of the parties.
Case 2: Assume the same facts as in case 1, except that all the members of the tribunal have not yet been appointed, which could be due to commonplace delays in the selection of tripartite arbitration panels. One party needs urgent emergency interim relief, but there is no tribunal to address this request.
Most international rules permit a party to seek interim measures of protection from a court without prejudicing its rights to arbitrate the merits.5 The party needing such relief before the full arbitral tribunal is appointed has generally had no choice up to now but to pursue interim relief in the courts.
However, judicial relief may be unavailable. …