Prior to 2010, parties using International Arbitration as a dispute resolution mechanism did not have an effective procedure relating to interim relief.
The most most important reasons for parties opting for international arbitration are:
- The parties' autonomy to select a neutral law and an arbitrator from neutral country
- The enforcement of international arbitration awards in 256 countries due to the in New York Convention On Recognition And Enforcement Of Foreign Arbitration Awards.
- Avoiding complex and un-uniform civil procedures and complex national court systems.
Earlier, if a party wished to get an interim order, the only possibility was approaching the national court of the opposite party and seeking an interim protection. It was a complex, expensive and a time-consuming process.
Hence, the concept of the emergency arbitrator was first introduced by the International Centre for Dispute Resolution(ICDR) by the American Arbitration Association(AAA). Singapore International Arbitration Centre(SIAC) was the first institution in Asia to adopt that system. According to the ICC rules, "any party that needs urgent interim or conservative measures that cannot await the constitution of the Arbitral Tribunal can apply for appointment of emergency arbitrator. That is, if a party is in an emergency and requires a protective or other interim order and has an arbitration clause in its contract, then it requires to make an application to the institution for appointment of emergency arbitrator. In its application, it requires to explain the reasons and the jurisdiction for emergency relief. It is clear that in an Ad Hoc Arbitration, there cannot be any emergency arbitrator and only Arbitral Institutions can appoint an emergency arbitrator.
The important characteristics of an emergency arbitrator are as follows:
- Power to deal with only emergency relief applications.
- Enjoys the same powers as the regular arbitral tribunal.
- Must complete his work within 14 days.
- Cannot continue after the formation of the arbitral tribunal.
- Orders can be reviewed or altered by the arbitral tribunal.
- Award can be challenged only in the seat of arbitration.
- Normally, emergency arbitrator will not be a part of the arbitral tribunal.
Enforceability of Emergency Arbitration
One of reasons for opting for emergency arbitration is to avail the support of the New York Convention. There is an argument that an emergency arbitrator award is not truly final and binding in accordance with Article V. 1(e) of the Convention. It has not defined "arbitral award" or whether an award is recognized and enforced as if it were a court order. Countries like Singapore and Hong Kong have expressly recognized emergency arbitration awards by the laws of their countries.
As of now, Indian laws do not expressly recognise emergency arbitrator. Interim order passed by the arbitral tribunal seated in India is enforceable. After The 2015 Amendment, Indian Courts have the power to award interim orders in support of an international arbitration. The Law Commission of India, in its 246th Report recommended to the Government of India to amend the Act recognising emergency arbitrator under Section 2 of the Act. Unfortunately, this did not make it into the amendment.