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Navigating Urgency in International Arbitration: The Rise of Emergency Arbitration
Navigating Urgency in International Arbitration: The Rise of Emergency Arbitration
Introduction:
In the dynamic realm of international arbitration, the concept of Emergency Arbitration (EA) has emerged as a pivotal tool to address time-sensitive issues. Often referred to as the "Achille's Heel" of sound and systematized arbitration, emergency relief through EA proves invaluable for parties seeking to safeguard assets and evidence vulnerable to alteration or loss.
The Aim and Role of Emergency Arbitration:
The primary objective of EA is to provide urgent pro tem or conservatory measures to parties unable to await the formation of an Arbitral Tribunal. The efficacy of EA relies on the twin principles of "Fumus boni iuris" (reasonable possibility of success on merits) and "Periculum in mora" (imminent and irreparable harm if relief is not granted). EA operates outside the traditional tribunal structure, allowing parties to expedite the resolution of disputes.
Powers Vested in Emergency Arbitration:
Emergency Arbitrators, appointed for the specific purpose of EA, possess powers akin to those of an ad hoc tribunal. These powers include ruling on their jurisdiction and ordering interim measures for a specified duration. The nature of these measures encompasses asset freezing, injunctions, evidence preservation, and preventive orders, among others. While an EA order is not binding on the arbitral tribunal, it can be varied, discharged, or revoked based on subsequent tribunal decisions.
Law Commission's Report and India's Initiative towards EA:
Despite the absence of explicit statutory recognition in India's Arbitration and Conciliation Act, the Law Commission's 246th Report proposed an amendment to acknowledge institutional rules providing for an emergency arbitrator. However, the 2015 Amendment Act did not incorporate this recommendation. Indian arbitration institutions, such as the Delhi International Arbitration Center and the Mumbai Center for International Arbitration, have taken the initiative to include EA provisions in their rules.
Enforcement in India- A Nuanced Approach:
Enforcing a foreign-seated EA award in India faces challenges due to the prospectively excluded powers of Indian courts in foreign-seated arbitrations, as per the BALCO vs. Kaiser Aluminum Technical Services[1] decision. However, Indian courts have shown an ancillary approach towards enforcing EA orders. Notable cases, such as HSBC v. Avitel[2] and Raffles Design International India Private Limited v. Educomp Professional Education Limited[3], highlight the evolving landscape where Indian courts align with EA decisions.
Global Scenario and Recognitions:
Internationally, jurisdictions like Singapore and Hong Kong have been pioneers in recognizing and enforcing EA orders through legislative amendments. Various arbitration institutions, including SIAC, SCC, and SCAI, now incorporate EA provisions. Notably, the New York Convention, which traditionally recognizes only final awards, has seen evolving interpretations regarding the enforceability of EA orders.
Conclusion: Charting the Future of Arbitration:
While Emergency Arbitration marks a significant shift in the landscape of international dispute resolution, India's formal statutory recognition is awaited. The nuanced approach of Indian courts towards ancillary enforceability showcases a willingness to adapt to global trends. As the legal community navigates the complexities of urgent relief, the role of Emergency Arbitration is set to grow, emphasizing the need for continuous legal reforms to align with evolving international standards.
[1] BALCO Kaiser Aluminum Technical Services (2012) 9 SCC 552
[2] HSBC PI Holdings (Mauritius) Ltd. v. Avitel Post Studioz Ltd & Ors., Arbitration Petition No. 1062/2012 dated January 22nd, 2014.
[3] Raffles Design International India Private Limited & Ors. v. Educomp Professional Education Limited & Ors, O.M.P (I) (Comm.) 23/2015, CCP(O) 59/2016 and IA Nos. 25949/2015, 2179/2016 dated October 7th, 2016.
- The primary objective of EA is to provide urgent pro tem or conservatory measures to parties unable to await the formation of an Arbitral Tribunal.
- Emergency Arbitrators, appointed for the specific purpose of EA, possess powers akin to those of an ad hoc tribunal.
- Internationally, jurisdictions like Singapore and Hong Kong have been pioneers in recognizing and enforcing EA orders through legislative amendments.
