The SCC Arbitration Rules, as well as other leading arbitration rules, allow parties to an arbitration agreement to obtain interim measures in an expedited manner, even before an arbitral tribunal is in place, by appointing an Emergency Arbitrator (Appendix II to the SCC Arbitration Rules, Article 1(1)). After the decision on interim measures is rendered, the applicant has 30 days to initiate the arbitration proceedings (Article 9(4)(iii)).
The advantages of obtaining an interim measure through emergency arbitration is that this avoids disputes about the jurisdiction of State courts in the presence of an arbitration agreement and also allows the parties to take advantage of the benefits of having their dispute solved by an international forum.
How Fast Can an Emergency Arbitration Award Be Obtained?
The SCC Board must appoint an Emergency Arbitrator within 24 hours of receipt of the application (Article 4(1)). Then, the SCC refers the application to the Emergency Arbitrator, who will have 5 days to render the emergency decision on interim measures (Articles 6, 8(1)).
The opposing party will have the opportunity to comment on the application and to make observations (Article 7). However, if the comments are not made on time, the Emergency Arbitrator will issue the decision in any event, without delaying the proceedings.
How Much Does an Application for Emergency Arbitration Cost?
For the SCC, with the application for the appointment of an Emergency Arbitrator, the applicant must pay EUR 20,000, which includes EUR 16,000 for the fees of the Emergency Arbitrator and EUR 4,000 of application fee (Article 10). The application shall include the proof of payment of the costs for emergency proceedings (Article 2(vi)).
How Are the Costs of the Emergency Arbitration Procedure Apportioned Between the Parties?
The emergency arbitrator may apportion the costs for the emergency proceedings between the parties having regard to the outcome of the case, each party’s contribution to the efficiency and expeditiousness of the arbitration and any other relevant circumstances. In addition, the emergency arbitrator may order one party to pay any reasonable costs incurred by another party, including costs for legal representation, having regard to the outcome of the case, each party’s contribution to the efficiency and expeditiousness of the arbitration and any other relevant circumstances (Article 10(6)).
What Are the Substantial Conditions for Obtaining and Interim Relief?
The application of interim measures must contain a summary of the dispute and a statement of the interim relief sought and the reasons therefore (Article 2).
Article 32 of the SCC Arbitration Rules affords the Emergency Arbitrator the power to issue interim measures in broad terms: “any interim measures … deem[ed] appropriate”. However, Article 32 does not contain the requirements that must be satisfied in order to issue interim measures; nor does Appendix II of the SCC Arbitration Rules.
In the absence of criteria in the SCC Arbitration Rules, emergency arbitrators generally consider that these requirements are, nevertheless, rather uncontroversial. For instance, Article 26 of the UNCITRAL Rules provides that an interim measure is a temporary measure by which, at any time prior to the issuance of the award by which the dispute is finally decided, the arbitral tribunal orders a party, for example and without limitation, to: (a) maintain or restore the status quo pending determination of the dispute; (b) take action that would prevent, or refrain from taking action that is likely to cause, (i) current or imminent harm or (ii) prejudice to the arbitral process itself; (c) provide a means of preserving assets out of which a subsequent award may be satisfied; or (d) preserve evidence that may be relevant and material to the resolution of the dispute.
The party requesting an interim measure under paragraphs 2 (a) to (c) shall satisfy the arbitral tribunal that: (a) harm not adequately reparable by an award of damages is likely to result if the measure is not ordered, and such harm substantially outweighs the harm that is likely to result to the party against whom the measure is directed if the measure is granted; and (b) there is a reasonable possibility that the requesting party will succeed on the merits of the claim. The determination of this possibility shall not affect the discretion of the arbitral tribunal in making any subsequent determination.
The Emergency Arbitrator may apply the test of “non-compensable harm” or the test of “substantial prejudice”.
If the test of “non-compensable harm” is applied, the applicant should prove that there is a risk of irrevocable harm or enforceability of the award if the interim measure is not granted. The central question is whether the harm that the injunctions sought by the applicant sought to avert are or are not adequately reparable by an award of damages. No interim measure is granted if all of the harm, actual and imminent, associated with the dispute could be made good by an award of damages (Evrobalt LLC v. The Republic of Moldova, Award on Emergency Measures).
On the other hand, the test of “substantial prejudice” has a lower threshold for this requirement. Some arbitrators are of the opinion that the criterion of “irreparable harm” has a flexible meaning in international law and that the possibility of monetary compensation does not necessarily eliminate the possible need for interim measures (this is the position taken in Sergei Paushok v. Mongolia and Kompozit LLC v. Republic of Moldova, Award on Emergency Measures).