1. ICC emergency arbitrator and On-Going contractual Relationships
Friederike Schaefer
Counsel
International Court of Arbitration
12. DAJV Fachgruppentag - Frankfurt - 4 March 2016

2. Purpose
Urgent interim or conservatory measures prior to the transmission of the file to the arbitral tribunal (Article 29(1))
Giving parties who choose arbitration over state courts the choice if going to state courts or arbitration for interim measures
Special expertise of decision-maker
Confidentiality
(Perceived) lack of neutrality in state court proceedings
Constituting an arbitral tribunal can take some time
National courts might not act as quickly as necessary
Why?
The Emergency Arbitrator Provisions are not intended to prevent any party from seeking urgent interim or conservatory measures from a competent judicial authority at any time prior to making an application for such measures, and in appropriate circumstances even thereafter, pursuant to the Rules. (Article 29(7))
Does not preclude going to local courts
Available unless they are excluded – Opt-Out provisions (Article 29(6))
General option
The Emergency Arbitrator Provisions are not
intended to prevent any party from seeking urgent
interim or conservatory measures from a competent
judicial authority at any time prior to making an
application for such measures, and in appropriate
circumstances even thereafter, pursuant to the
Rules. Any application for such measures from a
competent judicial authority shall not be deemed to
be an infringement or a waiver of the arbitration
agreement. Any such application and any measures
taken by the judicial authority must be notified
without delay to the Secretariat.

3. Timeline Positive Article 1(5) decision Negative Article 1(5) decision
Application
Application transmitted to responding parties
Emergency Arbitrator appointed/
File transmitted
Procedural Timetable/
Proceedings
Order
Terminates if Request for Arbitration is not filed within 10 days of the Application (unless EA fixes longer period of time)
Positive Article 1(5) decision
Negative Article 1(5) decision 1 3 5
Day 18

4. Article 1(5) ICC Rules – gateway Decision
The President decides whether the EA provisions apply prior to notifying it to the esponding Party (Art 1(5) & 29(5) and 29(6)):
Parties must be signatories to the arbitration agreement or successors to such signatories;
Arbitration agreement must have been signed on or after the effective date of the Rules (i.e., before 01/01/2012);
Parties did not agree to opt out of these provisions; and
Parties did not agree to another pre-arbitral procedure that provides for conservatory, interim or similar measures.
Here copy of Agenda and notification letters.
Who decides if criteria fulfilled?
President Art 1(5)/(6)
- the reasons why the applicant needs urgent interim or conservatory measures that cannot await the constitution of an arbitral tribunal; - important for EA to decide if it cannot await the constitution of the AT
- any relevant agreements and, in particular, the arbitration agreement; - for President’s jurisdiction decision
- any agreement as to the place of the arbitration, the applicable rules of law or the language of the arbitration; - to find the right arbitrator
President can delegate power to any of the Vice-presidents = important as need to be fast.
If the President decides not to accept the application, Respondent will be informed of the decision and will be sent a copy of the application. Respondent will always be informed of an Application even if it is rejected by the President (in order to avoid frivolous applications).
Signatories: strict test. Idea to protect Respondents who have not agreed to the procedure or who not know with whom they could end up contracting. So does not apply to subcontractors. Also means it will not apply to investor states: ie where there is a BIT/free-trade agreement/investment treaty.
Task force on states were very strong that it should not apply to treaty investor cases
Criteria:
Effective date: important new change.
Opt-out: discussed in overview
Another pre-arbitral procedure: won’t apply if have pre-arb referree, in FIDIC cases, other cases which provide for expert determination for example.
Termination: Unless EM determines that a longer time is necessary. Means there will have to be some conversation with the EA before the time limit expires.
Designed to stop abusive claimants asking for emergency provisions then not filing a request.
Point of issue: Quid if Respondent subsequently files an Application? Does Respondent have to file a Request for Arbitration? Does Respondent have to file a “counterclaim”/”Answer”? If so, within what time?

5. Appointment of the Emergency Arbitrator
Every emergency arbitrator shall be and remain impartial and independent of the parties involved in the dispute. (Article 2(4) of Appendix V)
In all cases, the emergency arbitrator shall act fairly and impartially and ensure that each party has a reasonable opportunity to present its case. (Article 5(2) of Appendix V)
Impartial and Independent
Before being appointed, a prospective emergency arbitrator shall sign a statement of acceptance, availability, impartiality and independence. The Secretariat shall provide a copy of such statement to the parties. (Article 2(5) of Appendix V)
Forms
An emergency arbitrator shall not act as an arbitrator in any arbitration relating to the dispute that gave rise to the Application. (Article 2(6) of Appendix V)
Cannot act as arbitrator

6. Proceedings
If the parties have agreed upon the place of the arbitration, such place shall be the place of the emergency arbitrator proceedings. (Article 4(1) of Appendix V)
In the absence of such agreement, the President shall fix the place of the emergency arbitrator proceedings, without prejudice to the determination of the place of the arbitration pursuant to Article 18(1) of the Rules. (Article 4(1) of Appendix V)
Place
Any meetings with the emergency arbitrator may be conducted through a meeting in person at any location the emergency arbitrator considers appropriate or by video conference, telephone or similar means of communication. (Article 4(2) of Appendix V)
Meetings
The emergency arbitrator shall conduct the proceedings in the manner which the emergency arbitrator considers to be appropriate, taking into account the nature and the urgency of the Application. (Article 5(2) of Appendix V)
Conduct

7. Order
Decision shall take the form of an Order (Article 6(1) of Appendix V, Article 29(2))
Not scrutinized by the Court. Informal scrutiny?
Order, Not an Award
In writing, dated, signed (Article 6(3) of Appendix V)
Formal elements
The Order shall state the reasons upon which it is based. (Article 6(3) of Appendix V)
The EA may make the Order subject to such conditions as the EA thinks fit (Article 6(7) of Appendix V)
Reasoned
In the Order, the Emergency Arbitrator shall determine whether the Application is admissible pursuant to Article 29(1) of the Rules and whether the Emergency Arbitrator has jurisdiction to order Emergency Measures. (Article 6(2) of Appendix V)
Decision on Admissibility, (if +) Jurisdiction and (if +) Merits
The Emergency Arbitrator Order shall fix the costs of the Emergency Arbitrator proceedings and decide which of the parties shall bear them or in what proportion they shall be borne by the parties. (Article 7(3) of Appendix V) (different from Art.37(1))
Decision on Costs

8. ‘FATE’ of the Order
Upon a reasoned request by a party made prior to the transmission of the file to the arbitral tribunal pursuant to Article 16 of the Rules, the Emergency Arbitrator may modify, terminate or annul the Order upon a party’s request (Article 6(8) of Appendix V )
Before transmission of the file to the Arbitral Tribunal
a) the President’s termination of the Emergency Arbitrator proceedings because no Request for Arbitration is filed;
b) the acceptance by the Court of a challenge against the Emergency Arbitrator pursuant to Article 3 of Appendix V;
c) the arbitral tribunal’s final award, unless the arbitral tribunal expressly decides otherwise; or
d) the withdrawal of all claims or the termination of the arbitration before the rendering of a final award. (Article 6(6) of Appendix V)
Ceases to be binding also upon:
The Emergency Arbitrator’s order shall not bind the arbitral tribunal with respect to any question, issue or dispute determined in the order. The arbitral tribunal may modify, terminate or annul the order or any modification thereto made by the Emergency Arbitrator. (Article 29(3))
Does not bind the Arbitral Tribunal

9. Compliance with the order
The parties undertake to comply with any order made by the Emergency Arbitrator. (Article 29(2))
Undertaking
The arbitral tribunal shall decide upon any party’s requests or claims related to the Emergency Arbitrator proceedings, including the compliance or non-compliance with the order. (Article 29(4))
Non-compliance
Order not award (App. V, Art. 6(1) ICC Rules) -> a priori outside scope of New York Convention 1958
Legislation of certain countries may allow for assistance from courts: Article 17H(1) UNCITRAL Model Law (2006) (by analogy?): “an interim measure issued by an arbitral tribunal shall be recognized as binding and, unless otherwise provided by the arbitral tribunal, enforced upon application to the competent court…”
At least one national court has enforced an emergency arbitrator order to date…
Enforceability

10. Costs US$ 10 000 for ICC administrative expenses
US$ for the Emergency Arbitrator’s fees and expenses
May be increased by the President (Article 7(2) of Appendix V)
US$
The Applicant (Article 7(1) of Appendix V)
Who pays?
In the event that the emergency arbitrator proceedings do not take place or are otherwise terminated prior to the making of an Order, the President shall determine the amount to be reimbursed to the applicant, if any. (Article 7(5) of Appendix V)
Withdrawal or termination
US$ (Article 7(5) of Appendix V)
Non-refundable amount

11. The experience to date
The 28 first Emergency arbitrator cases

12. The experience to date – SOME STATISTICS
28 Emergency Arbitrator cases registered as of 1 March 2016:
Types of contracts/disputes:
Oil&Gas, M&A, sale of products, real estate, telecommunications, construction
Amount in dispute: from US$ to US$ mio.
Parties involved
More than 90 parties and more than 25 nationalities involved
4 cases with US applicants, 1 case with US responding party
2 cases with German applicants, none with German responding party

13. The experience to date – SOME STATISTICS
2 challenges against EAs (both rejected by the Court)
3 requests to EA for modification of the order (changed circumstances and date of payment, decision on costs) (all rejected by the EA)
Relief (partially) granted in 9 cases, rejected in 14 cases, 1 withdrawal, 2 not admitted by the President, 2 pending
At least 4 of the successful applications were voluntarily complied with
Emergency Arbitrator

14. THE experience to date: types of measures sought
• Securing enforcement of the future award: (Freezing assets)
- order not to compromise funds necessary to fulfil payment obligations under the contract
- order that sums be placed into an escrow account until rendering of the Final Award
• Preserving or restoring the status quo: (Preventing aggravation of damages)
- order to refrain from selling assets of the target company in a SPA
- order to refrain from calling a bank guarantee (very common in Latin America)
- order to pay a third party for delivery of perishable goods
- order against controlling shareholder of a corporation to refrain from making any distributions to shareholders and, among others, from disposing of shares
• Anti-suit injunctions:
- order preventing the respondent Party from initiating actions before state courts or
discontinuing any such action
• Interim payments:
- order to pay sums due under the contract immediately, subject to reimbursement
Performance of contractual obligations
- order to continue delivery of goods

15. THE experience to date: Test to be satisfied to obtain relief
Emergency Arbitrators appear to stick to standards applied in previous arbitral tribunals’ decisions on interim measures:
Urgency (Not consistently interpreted by Emergency Arbitrators; Article 29(1) ICC Rules taken into account: limited power of Emergency Arbitrator: only interim measures “that cannot await the constitution of the arbitral tribunal” and
- A prima facie case or a reasonable chance for Applicant to succeed on merits, and
Any harm from wrongfully granting relief can be compensated by way of damages , and
Serious or Irreparable harm to Applicant if relief not granted
Not all Emergency Arbitrators applied all the above criteria and most did not
consider themselves bound by either the applicable law or the law at
the place of arbitration

16. Experience to date – General conclusions
Growing importance of interim relief in international arbitration
Efficiency of the Emergency Arbitrator mechanism despite doubtful enforceability
Facilitation of settlement:
7 proceedings closed without final award, 1 with award by consent
No arbitral award yet in 13 proceedings
4 final awards
Emergency Arbitrator

17. Experience to date - examples
Latest case with participation of US party in January 2016
Dispute about termination of licensing agreement and continuous use of licensed products (negotiations on renewal failed, time limit for exercising wind-down rights by licensee allegedly had expired)
Applicant requests an order that responding party immediately ceases to distribute any licensed products
In this particular case, the EA decided that recourse to interim measures was premature pursuant to the dispute resolution clause in the agreement
EA proceedings with participation of German applicant in 2014
Dispute arising out of a supply agreement
Supplier refused to deliver goods because of alleged right of retention, buyer requested order to continue delivery
EA decided that the urgency requirement was not met and dismissed request
Emergency Arbitrator

18. Conclusions / Questions regarding On-going contractual RElationships
Advantages of EA proceedings over state court proceedings in connection with on-going contractual relationships
Are general advantages of arbitration relevant for users in this context?
Role of seat of Respondent Party?
Relevance of necessity to file Request of Arbitration within 10 days?
Role of particular kind of contractual relationship (shareholder agreement / licensing agreement / sale of goods)?
Arguments for voluntary compliance? (damages claim for non- compliance within the jurisdiction of the arbitral tribunal pursuant to Article 29(4) of the Rules?)
Emergency Arbitrator