EMERGENCY ARBITRATION:

WORKING AND ENFORCEABILITY

NIDHI CHITKARA 03016503813
SECTION A
8TH SEMESTER

INTERNATIONAL COMMERCIAL LAW

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ABSTRACT

An emergency arbitration is one in which an arbitrator is appointed to deal with

requests for urgent interim relief, such as an interim injunction, before the main
tribunal is constituted. Emergency arbitrator provisions have been introduced into
most of the major arbitration rules as a way for parties to apply for interim relief
without having to go to a national court, or having to wait until the main tribunal is
appointed. This paper aims to address the importance and working of Emergency
Arbitration, while throwing some light on the procedure for the same under
Singapore International Arbitration Centre (SIAC). The paper further seeks to
address the workability of emergency arbitration in India which has been adopted
by several arbitration centres like the ICC India, Nani Palkhiwala Arbitration
Centre, Delhi High Court Arbitration Centre and the Indian Council of Arbitration.

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INTRODUCTION

Arbitration, by nature, is a creature of consent. It does not operate in the absence of

a validly concluded agreement to arbitrate.1 It remains, as it always has been, a
mechanism for dispute resolution agreed on between the parties, without recourse
to courts of law.2 This includes mechanisms through which the Parties may submit
themselves to various arbitral institutions like the ICC International Court of
Arbitration, The Singapore International Arbitration Centre (SIAC) and Indian
Institutes like the Nani Palkhivala Arbitration Centre.

During an arbitration, certain circumstances require the tribunal or national courts

to issue interim measures to maintain the status quo or to enforce performance of
the contract, on the basis of the probability of irreparable harm, among several
other possible situations.3 Several arbitral institutions within their institutional
rules, have allowed tribunals to grant interim measures as early as 1915.4 This
triggered the amendments to the UNCITRAL Model Law in 2006, which brought
in several provisions to accommodate emerging trends in international commercial
arbitration.5 One of these amendments was to Article 17 which empowered
tribunals to grant interim measures when the situation demanded. Several nations
have since then amended their own national arbitration laws. In India, the 246th

1
Alan Redfern & Martin J. Hunter, Law And Practice Of International Commercial Arbitration (4th Ed., 2004)
2
Ibid
3
Fouchard, Gaillard & Goldman, Part 4: Chapter III - Provisional and Conservatory Measures in the Course of the
Arbitration
Proceedings, in Fouchard Gaillard Goldman On International Commercial Arbitration, 721 (1999).
4
Ali Yesilirmak, Provisional Measures In International Commercial Arbitration 2-11 (2005);
5
Markus S. Reider, UNCITRAL Arbitration Rules- Institutional Reform, 16.6 INTL A.L.R. 179, 179-184 (2013)

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Law Commission Report 2014 has sought to address all areas of arbitral law that
they saw as conforming to the scene of arbitration in India.6

OBJECTIVE

The objective of EA is to provide urgent pro tem or conservatory measures to a

party or parties that cannot await the formation of an Arbitral Tribunal. The
efficacy of an Emergency Arbitration, invoked by a party, survives on a chariot of
two wheels:

i. Fumus boni iuris- Reasonable possibility that the requesting party will succeed
on merits;
ii. Periculum in mora if the measure is not granted immediately, the loss would
not and could not be compensated by way of damages. 7

The main role of Emergency Arbitration comes into play in a situation, when there
is no arbitral tribunal in place or in a situation where sufficient time would be
wasted in setting up one, depending upon the requirements of an arbitration
agreement or the institutional rules. EA proliferates as a promise because of
various other defects in the system such as lack of confidence in the national courts
to grant urgent reliefs, leakage of confidential information, exaggerated litigation
cost, etc.

6
Law Commission of India, The 246th Report on the Amendments to the Arbitration and Conciliation Act, 1996, 37-
50 available at http://lawcommissionofindia.nic.in/reports/Report246.pdf
7
Model Law on International Commercial Arbitration of the United Nations Commission on International Trade
Law, G.A. Res. 40/72, U.N. Doc. A/RES/40/72, Art. 17A (Dec. 11, 1985)

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PROCEDURE

Although approaches to emergency procedures vary to some extent from one

institution to another, expedited formation of the tribunal and EAs has developed
as common practical alternatives.

Currently, the SIAC, the International Centre for Dispute Resolution, the
International Chamber of Commerce, the Hong Kong International Arbitration
Centre, the Stockholm Chamber of Commerce and the Swiss Chambers'
Arbitration Institution provide for emergency arbitration in their rules, among other
institutions.

This paper discusses summarily emergency arbitration under the SIAC Rules,
which has been one of the most regularly used and tested types of emergency
arbitration.

SINGAPORE INTERNATIONAL ARBITRATION CENTRE (SIAC)

SIACs approach to emergency procedures relies mainly on EAs who can be called
upon to answer emergency issues before the arbitral tribunal has been constituted.8
It should be noted from the beginning that these procedures apply to the relevant
arbitration agreements by defaultmeaning that there is no requirement for the
parties to opt-in to their availability. The default operation of EA rules or the
need to explicitly opt out of their provisions is an important developing feature of

8
Kamakshi S. Mehlwal, Emergency Arbitration available at http://www.kimandco.net/Article-2.html

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EA procedures across the range of institutions. The effect of the default operation
of these provisions is that these procedures become more popularly available to
disputing parties and there will likely be a continuing increase in applications for
EA interim relief.
Rule 26.2 and Sch.1 to the SIAC Arbitration Rules (4th edn), which came into
effect on July 1, 2010, provide that a party in requirement of relief may make an
application for emergency interim relief prior to the constitution of the arbitral
tribunal provided it is done concurrently with or following the filing of a Notice of
Arbitration.9 The Chairman of SIAC must appoint an EA within one business day
of receipt of the application.10 Further the EA must within two business days of
appointment establish a schedule for considering the application.11 Although SIAC
procedures provide the arbitrator with wide discretionary powers to award any
interim relief deemed necessary,12 the EA has no power to act after the tribunal is
constituted, and any relief granted by the EA ceases to be binding after 90 days if
the tribunal is not constituted.13Additional jurisdictional protection is afforded to
the subsequently-constituted tribunal as it is not bound by any determination made
by the EA. The tribunal can reconsider, modify or vacate any interim award or
relief issued by the EA.14 Furthermore, the tribunal, once constituted has the power
to award injunctions and other interim relief if appropriate on the application of a
party to the dispute (r.26.1). However, a party may only apply to the courts for
interim relief after the constitution of the tribunal in exceptional circumstances.

9
SIAC Rules (2010) Sch.1(1).
10
SIAC Rules (2010) Sch.1(2).
11
SIAC Rules (2010) Sch.1(5).
12
SIAC Rules (2010) Sch.1(6).
13
SIAC Rules (2010) Sch.1(7).
14
Ibid

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ENFORCEABILITY IN INDIA

India took a big leap in reforming its arbitration law by amending the Arbitration
& Conciliation Act, 1996 in December 2015. The 2015 Amendments bode well for
promoting institutional arbitration in India.

One of the obvious advantages of institutional arbitration is the emergency

arbitrator provisions a procedure which has been resorted to quite frequently by
the Indian parties under the SIAC rules. However, enforceability issues loom
greatly over such emergency awards in a foreign seated arbitration in light of the
recent decision of the Delhi High Court in Raffles Design International India Pvt.
Ltd.& Anr. v. Educomp Professional Education Ltd.& Ors.15 The Court ruled that
an emergency award in a foreign seated arbitration cannot be enforced in India
under the Act. But it seems that indirect enforcement of emergency awards can be
seeked by parties by applying for interim measures under section 9 of the Act
before Indian courts.

INDIAN POSITION PRE-2015 AMENDMENTS

Due to the Bhatia16-BALCO17 dichotomy in Indian arbitral jurisprudence,

arbitration agreements executed prior to 6 September 2012 with a foreign seat may
still be bound by the provisions of Part I of the Act (applicable to India seated
arbitrations) unless expressly or impliedly excluded.

There are two provisions which play a significant role for the grant of interim relief
under the Act. Section 17 provides for interim measures by the arbitral tribunal and

15
(MANU/DE/2754/2016).
16
Bhatia International v. Union of India (2002 4 SCC 105)
17
Bharat Aluminium Co. v. Kaiser Aluminium Technical Services,Inc. ((BALCO, (2012) 9 SCC 552)

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section 9 provides for interim measures by courts. Since both these provisions are
in Part I of the Act, it is presumed that these provisions will not be applicable to
foreign seated arbitrations as such without going into the exceptions that may arise
due to the Bhatia18-BALCO19 dichotomy.

2015 AMENDMENTS

To ensure that parties involved in a foreign seated arbitration have recourse to

interim relief from Indian courts, the 2015 Amendments made section 9 of the Act
applicable to foreign seated arbitrations (subject to an agreement to the contrary).
Another important amendment was insertion of section 17(2)20 under which any
order issued by the arbitral tribunal is now deemed to be an order of the court and
enforceable in the same manner. The addition of section 17(2) should aid the
enforcement of emergency awards for domestic seated arbitration in India. But
there was no amendment of a similar nature made in Part II of the Act dealing with
foreign seated arbitrations, leaving any interim orders passed by a foreign seated
arbitral tribunal as non-enforceable in India.

In August 2014, the Law Commission of India in its 246th Report, sought to offer
statutory recognition to emergency awards by broadening the definition of arbitral
tribunal under section 2(1)(d) of the Act to incluase an emergency arbitrator.

The Law Commission has recommended that Section 2(1)(d) of the Act be
amended so as to include the clause:21

18
Supra 16
19
Supra 17
20
Section 17 (2): Subject to any orders passed in an appeal under section 37, any order issued by the arbitral
tribunal under this section shall be deemed to be an order of the Court for all purposes and shall be enforceable
under the Code of Civil Procedure, 1908, in the same manner as if it were an order of the Court..
21
Law Commission of India, The 246th Report on the Amendments to the Arbitration and Conciliation Act, 1996,
37-50 available at http://lawcommissionofindia.nic.in/reports/Report246.pdf

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and, in the case of an arbitration conducted under the rules of an institution
providing for appointment of an emergency arbitrator, includes such emergency
arbitrator,
The new section would thus read:
arbitral tribunal means a sole arbitrator or a panel of arbitrators and, in the
case of an arbitration conducted under the rules of an institution providing for
appointment of an emergency arbitrator, includes such emergency arbitrator.

Nonetheless, such statutory recognition is not reflected in 2015 Amendments and

this, along with the absence of a provision similar to section 17(2) in Part II of the
Act, has caused uncertainty in India for both domestic and foreign seated
emergency awards.

CASE STUDY:

1. HSBC v. Avitel22

The case involved an arbitration agreement in which the parties reserved their
right to seek interim reliefs before the national Courts of India, even though the
Arbitration was conducted outside the country. The parties resorted to EA
seated in Singapore, where a favorable order was given to the party who sought
to enforce the same in India. The Bombay High Court while upholding the
award of the Emergency Arbitrator and granting interim relief observed that the
petitioner has not bypassed any mandatory conditions of enforceability23
since it was not trying to obtain a direct enforcement of the interim award. It is
22
HSBC Pl. Holdings (Mauritius) Ltd. v. Avitel Post Studioz Ltd., 2014 Indlaw Mum 29 (India).
23
HSBC PI Holdings (Mauritius) Ltd. v. Avitel Post Studioz Ltd & Ors., Arbitration Petition No. 1062/2012 dated
January 22nd, 2014, Para 89.

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 germane to note that the subject agreements were entered into between the
parties prior to the BALCO judgment, thus the ratio decidendi of BALCO did
not apply to this case.

2. RAFFLES DESIGN24 CASE

In Raffles Design25, the dispute resolution clause provided for arbitration under
SIAC Rules. In September 2015, the petitioners invoked emergency arbitration
provisions and an emergency award was rendered on 6 October 2016. The
petitioners were successful in enforcing emergency award against one of the
respondents before the High Court of Singapore under section 12 of the Singapore
International Arbitration Act in February 2016. The Court was concerned with the
question of maintainability of an application for interim measures under section 9
of the Act after a foreign seated emergency award was already obtained by the
petitioner, which it answered in the affirmative. The reasoning raises some
interesting propositions worth analysing.

1. a) Enforcement of Emergency Awards in India

The Court held that section 17(2) of the Act is not applicable to foreign seated
arbitrations, since it is contained in Part I of the Act. The Court then went on to
place reliance on Article 17H26 of the UNCITRAL Model Law27 which provides

24
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.
25
Ibid
26
Article 17 H. Recognition and enforcement
(1) 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, irrespective of the country in which it was
issued, subject to the provisions of article 17 I.
(2) The party who is seeking or has obtained recognition or enforcement of an interim measure shall promptly
inform the court of any termination, suspension or modification of that interim measure.

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for recognition and enforcement of interim measures granted by the arbitral
tribunal to be binding, except the grounds mentioned in Article 17I28. In the
absence of a similar provision for foreign seated arbitrations, the Court held that
the emergency award cannot be enforced under the Act and the only method
available for enforcing the same would be to file a suit.

The Act is silent on the enforcement of foreign seated emergency awards/orders of

the arbitral tribunal and the Courts observations in this regard that emergency
awards cannot be enforced under the Act appear to be consistent.

1. b) Non-reliance on HSBC

The Court reasoned that section 9 of the Act cannot be used to enforce emergency
awards but the parties are free to approach the court for interim relief under section
9. The judgment of HSBC holds particular importance for the acknowledgement of
the concept of emergency arbitration in India. It is unfortunate that HSBC has not
received much attention in the Indian arbitration scene and was not even
mentioned by the Court in Raffles Design.
(3) The court of the State where recognition or enforcement is sought may, if it considers it proper, order the
requesting party to provide appropriate security if the arbitral tribunal has not already made a determination with
respect to security or where such a decision is necessary to protect the rights of third parties.
27
Model Law on International Commercial Arbitration of the United Nations Commission on International Trade
Law, G.A. Res. 40/72, U.N. Doc. A/RES/40/72, Art. 17 (Dec. 11, 1985)
28
Article 17 I. Grounds for refusing recognition or enforcement
(1) Recognition or enforcement of an interim measure may be refused only:
(a) At the request of the party against whom it is invoked if the court is satisfied that: (i) Such refusal is warranted
on the grounds set forth in article 36(1)(a)(i), (ii), (iii) or (iv); or (ii) The arbitral tribunals decision with respect to
the provision of security in connection with the interim measure issued by the arbitral tribunal has not been
complied with; or (iii) The interim measure has been terminated or suspended by the arbitral tribunal or, where so
empowered, by the court of the State in which the arbitration takes place or under the law of which that interim
measure was granted; or
(b) If the court finds that: (i) The interim measure is incompatible with the powers conferred upon the court unless
the court decides to reformulate the interim measure to the extent necessary to adapt it to its own powers and
procedures for the purposes of enforcing that interim measure and without modifying its substance; or (ii) Any of
the grounds set forth in article 36(1)(b)(i) or (ii), apply to the recognition and enforcement of the interim measure.
(2) Any determination made by the court on any ground in paragraph (1) of this article shall be effective only for the
purposes of the application to recognize and enforce the interim measure. The court where recognition or
enforcement is sought shall not, in making that determination, undertake a review of the substance of the interim
measure.

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 1. c) Improper reliance on Article 17I(2) of the Model Law

In HSBC, the Bombay High Court granted interim measures in a similar vein as
that of the emergency arbitrator. On the other hand, in Raffles Design it was held
that it is open to a court to independently determine the grant of interim relief.

In arriving at this conclusion, the Court incorrectly sought to rely on Article

17I(2)29 of the Model Law to state that the court enforcing an interim order
passed by the Arbitral Tribunal in prescribed form undertakes a review of the
substance of interim measure. In fact, a bare reading of Article 17 I (2) of the
Model Law demonstrates that such a review on merits of the interim measure is not
available . The court where recognition or enforcement is sought shall
not undertake a review of the substance of the interim measure.

INDIAS INITIATIVE TOWARDS EA:

Notwithstanding the fact that the term Emergency Arbitration is omitted from
the amended Arbitration and Conciliation (Amendment) Act, a new move has
emerged by way of which, arbitration institutions are trying to absorb the term
Emergency Arbitration in their rules and are making simultaneous procedures
thereof. Although, the Indian arbitral institutions statutorily are not cogent enough
(in realm of an expressly omitted provision), yet they have framed rules which are
by large synonymous to the leading international arbitration institutional rules.
Some notable institutions with their respective regulations are:

29
Supra 28

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 a) The Delhi International Arbitration Center (DAC30), of the Delhi
High Court in Part III of its Arbitration Rules includes Emergency
Arbitration. Further Section 18A enumerates Emergency Arbitrator
and further explains the appointment, procedure, time period and
powers of an Emergency Arbitrator.
b) Court of Arbitration of the International Chambers of
Commerce-India, under Article 29 of the Arbitration and ADR
Rules r/w Appendix V enumerate the provisions of EA and
Emergency Arbitrator.
c) International Commercial Arbitration (ICA), under Section 33 r/w
Section 36(3) w.e.f 01.01.2014, enumerates the provisions of EA and
Emergency Arbitrator.
d) Madras High Court Arbitration Center (MHCAC) Rules, 2014,
under Part IV, Section 20 r/w Schedule A and Schedule D enumerate
the provisions of EA and Emergency Arbitrator.
e) Mumbai Center for International Arbitration (Rules) 2016, under
Section 3 w.e.f 15.June.2016 enumerates the provisions of EA and
Emergency Arbitrator.

LIMITATIONS OF EMERGENCY ARBITRATION

Despite its increasing popularity, parties should be aware of the limitations of

emergency arbitration, particularly when compared with the court-ordered interim
measures which are available in support of arbitration in most countries. In
particular:

30
Delhi International Arbitration Center (DAC)4, Part III, Section 18A.

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 Most arbitral institutions (including the SIAC) require applications for an
emergency arbitrator to be made on notice to the other party. This might
defeat the purpose of seeking the interim measure. Where, for example,
interim relief is sought to prevent the dissipation of assets, notification to a
respondent of the application may encourage the respondent to transfer
those assets out of reach. National courts usually permit applications to be
made without notice, where there is a particular urgency or a need to obtain
an order without the other party being made aware. The other party is then
given an opportunity to apply to have the interim measure set aside31.
An emergency arbitrator cannot make orders against a third party, because
the emergency arbitrator's powers are limited to the parties to the arbitration.
National courts, on the other hand, can impose an order on any third party
which is within their jurisdiction; for example, a bank in which the
respondent's funds are being held.
An emergency arbitration award does not have the same "bite" as a court-
ordered interim measure. While courts can impose criminal penalties for
breaching an interim order, an emergency arbitrator has no such power.
There remain doubts as to the enforceability of rulings issued by an
emergency arbitrator via the available court processes, especially whether or
not these can be considered "final and binding", and therefore enforceable
under the New York Convention. Some jurisdictions, such as Singapore and
Hong Kong, have specifically amended their legislation to make emergency
arbitration awards enforceable, but most jurisdictions have not. There
appears to be a high rate of voluntary compliance with emergency awards
because respondents wish to avoid the possibility of the main tribunal

31
Ashurst Singapore May 2014: The emergence of emergency arbitration

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 drawing negative inferences about them. However, that provides little
comfort for applicants when the other party refuses to comply. 32

CONCLUSION

The emergency arbitrators order shall take the form of an interim award which the
parties undertake to comply with. In the event that a party fails to comply with
such order, it may be enforceable in nature under the provisions of various national
laws depending upon the discretion of national courts and national laws which may
or may not include Emergency Arbitration provisions.

Although, Emergency Arbitration steps in as a turning tide for the global scenario
in view of injunctions in Arbitration proceedings, India still awaits a formal
statutory recognition of the awards of the Emergency Arbitrator. However,
arbitration institutions in India are trying to absorb the term Emergency
Arbitration in their rules and are making simultaneous procedures thereof.

32
Ibid

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