Partner -ArbLit, Milan
Emergency arbitration allows a party to seek urgent interim measures before the arbitral tribunal has been constituted. It is designed for situations in which delay, particularly delay inherent in constituting the tribunal, could drain the requested measure of any practical value.
Its virtues are obvious: it offers the possibility to obtain a decision on urgent interim relief by an arbitrator, rather than by a state court, speedily and confidentially. Yet those virtues come at a price. The parties and the arbitrator are required to act on a severely compressed schedule and with a limited record, often well before the dispute has assumed its final shape. For the arbitrator, in particular, the task is to move quickly while preserving due process, so that the final order can withstand scrutiny.
Institutional rules confer broad discretion on the emergency arbitrator to shape the proceedings as appropriate. But, unlike in arbitrations on the merits, there is no universally accepted procedural script from which one may draw inspiration. This may leave first-time emergency arbitrators in a quandary about how best to proceed. Here are some practical takeaways that may help them navigate the process effectively.
Early Timetable and Procedural Directions
As an emergency arbitrator, your first duty is to bring order to the urgency. The major institutional rules contemplate, as one of the first procedural steps, the prompt establishment of a timetable. CEPANI is no exception (see Article 27(8) of the Rules).
Although there is no obligation for the emergency arbitrator to consult the parties before fixing the timetable, it would be sensible to do so, if possible, by convening a brief virtual conference. This may help clarify the essential points: how many submissions are needed, whether witness evidence will be filed, whether a hearing is likely to assist, and any other matter bearing on the efficient conduct of the proceedings.
An alternative way to proceed, often adopted in practice, is to provide the parties with a proposed calendar, invite their comments within a short deadline, and hold a conference only if the comments are unclear or prompt follow-up questions that would be more expediently handled orally.
The timetable must be flexible; yet it must ensure that the order will be rendered on time. Thus, it may provide for one round of written submissions (the application and the answer), while reserving the possibility of another round (the reply and the rejoinder) if the respondent's answer raises matters requiring a further exchange. Likewise, the timetable may pencil in a tentative hearing, stating that it will take place only if the emergency arbitrator considers it necessary, or if either party requests one, after the written exchanges (I will come back to this below). It is important that any hearing, even if tentative, be set sufficiently in advance of the deadline for issuing the order, so as to leave the emergency arbitrator enough time to digest its outcome and reflect it in the order. This disciplined flexibility may help the emergency arbitrator adjust the procedure as it unfolds, based on what emerges from the parties' submissions.
There is no need for emergency arbitrators to issue a formal procedural order setting out the timetable. Time is too scarce for avoidable formalities. Hence, a letter, or even an email, which may, for convenience, be labelled “Procedural Order no. 1”, will generally suffice. The emergency arbitrator may also use that letter or email to set some basic procedural rules: means of communication and service, page limits, handling of evidence, and format of any hearing.
Once a timetable has been established, the emergency arbitrator and the parties should adhere to it rigorously. The emergency arbitrator should police extensions and unsolicited submissions strictly, because the very point of the emergency mechanism is procedural economy. When the respondent does not participate in the proceedings, the emergency arbitrator should notify the respondent of each procedural step so as to enable it to participate at a later stage and to ensure compliance with due process.
Decisions on Maintaining Status Quo and Ex Parte Relief
At the outset, emergency arbitrators may also be required to decide on requests for the maintenance of the status quo. Through such requests, applicants seek to prevent respondents from altering the existing factual situation (for instance by dissipating assets, stopping contractual performance, or concealing evidence), or aggravating the dispute (for example by destroying property), pending the final emergency order.
These requests must be approached with particular care. The emergency arbitrator should not treat status quo relief as automatic and must always give the respondent an opportunity to comment on the request before deciding on it.
Some rules (e.g. the ICC Rules or the SIAC Rules) may also contemplate ex parte relief, i.e., relief that the emergency arbitrator may grant immediately, without hearing the respondent.
Requests for ex parte relief demand even closer examination. The main hurdle for the applicant is to demonstrate that notice to the respondent would likely render the measure nugatory. If it grants the request, the emergency arbitrator should tailor the relief narrowly, immediately notify respondent and provide it with an expedited opportunity to be heard. The emergency arbitrator should also consider whether security is needed and be prepared to adjust the measure, or even revoke it, once the respondent is heard.
Hearing
Unless otherwise provided in the applicable arbitration rules or the law of the seat, emergency arbitrators may dispense with a hearing when they deem it unnecessary and decide on documents alone. This happens in many cases. Indeed, where the written record is clear, oral argument on the emergency measure may add little beyond another layer of unnecessary complexity, which is particularly undesirable in a case that must be decided within a tight timeframe. The better course is for the emergency arbitrator to wait until the written phase has closed before deciding whether a hearing should take place at all.
If a hearing is held, the emergency arbitrator should strive to put questions to the parties in advance, to ensure the oral discussion is fruitful and focuses on what really matters. Given the compressed framework, and for the sake of efficiency, the arbitrator should set rigorous time constraints for oral arguments and hear only those witnesses, if any, whose evidence appears material to the outcome of the case.
As to the format of the hearing, unless there are specific reasons to hold it in person, such as a provision of the law of the seat, it could be held by videoconference. That will often be the most appropriate format, because it spares the emergency arbitrator and the parties the inconvenience and delay of travelling to the hearing venue, in a situation where even an hour lost could imperil the timely issuance of the order.
Drafting the Order
The emergency arbitrator should begin drafting the order from the outset. This will help her or him not only to meet the tight deadline, but also to understand the parties' positions promptly and identify any point requiring further clarification, which can then be obtained through targeted questions to the parties. The draft, hence, becomes a guide to the conduct of the proceedings.
The final order should be concise, but not skeletal. The best practice is to set out, at a minimum, the basis of the arbitrator's authority, the procedural history, the analysis of jurisdiction and admissibility, the applicable standard, the reasons for granting or refusing relief, the allocation of costs, and the exact scope and duration of any measure ordered. The order should also make clear that it does not prejudge the merits and may be revisited by the arbitral tribunal once constituted.
In emergency arbitration, the best order is one that gives the parties enough reasons to understand the decision, enough precision to comply with it, and enough restraint to protect the integrity of the arbitration that follows.
Conclusion
Emergency arbitration is a narrow but essential device: it exists to ensure that the goal of arbitration - to administer justice expediently and competently - is not defeated before the tribunal is constituted. Its proper use depends on disciplined speed, procedural economy and orders that are concise enough to be issued in time, yet reasoned enough to command trust. The tips in this article should help first-time emergency arbitrators navigate the process with greater confidence and achieve that goal.