Young ICCA – Singapore Convention Week event
Young ICCA is inviting you to attend Emergency Arbitration 101 : Latest Trends and Developments, a hybrid event taking place in Singapore on Wednesday 30 August 2023 between 4 PM and 6 PM (SGT).
- Sapna Jhangiani KC, Attorney-General’s Chambers of Singapore
- Anne Secomb, Secomb Arbitration
- Vivekananda Neelakantan, SIAC
- Mahesh Rai , Drew & Napier
- Rohit Bhat, Freshfields Bruckhaus Deringer / Young ICCA Co-chair
- David Isidore Tan, Rajah & Tann
- Saemee Kim (moderator), Lee & Ko / Young ICCA Events Co-director
Post Event Report
By Violet Huang (Associate, Norton Rose Fulbright (Asia) LLP)
On 30 August 2023, Young ICCA hosted a hybrid event as a part of the Singapore Convention week, titled “Emergency Arbitration 101: Latest Trends and Developments”. Over 200 participants joined the hybrid event.
The event was co-organised by Young ICCA, and Rajah & Tann Asia. The event featured a panel of prominent international arbitration lawyers and arbitrators: Sapna Jhangiani KC (International Legal Counsel, Attorney-General’s Chambers of Singapore), Anne Secomb (Independent arbitrator, Secomb Arbitration), Vivekananda Neelakantan (Deputy Registrar, Singapore International Arbitration Centre), Mahesh Rai (Director, Drew & Napier). The panel discussion was moderated by Saemee Kim (Partner, Lee & Ko). Opening and closing remarks were respectively delivered by Rohit Bhat (Senior Associate, Freshfields Bruckhaus Deringer) and David Isidore Tan (Rajah & Tann Singapore)
Emergency arbitrations are usually convened via a special procedure, where an emergency arbitrator is appointed to hear applications for urgent interim relief before an arbitral tribunal is convened. The discussion centred around the procedural and substantive issues faced by practitioners and arbitrators in emergency arbitrations, as well as the trend and developments in emergency arbitrations.
Saemee Kim started off the discussion by sharing some statistics about emergency arbitration: emergency arbitrations take up about 2-3% of the total cases by institutions. While emergency arbitration may not be the most common, it remains significant, as it is one of the two options for parties to obtain interim relief before a tribunal is constituted; the other one would be applying to domestic courts.
Saemee Kim then delved into the first question with the panellists: the pros and cons of each forum, and whether they would advise their clients to go to the emergency arbitrator or the court. Sapna Jhangiani KC pointed out that the difference with emergency arbitrations is the lack of ex parte relief under most rules. Courts may offer a quicker relief to preserve the status quo. She also observed that the legislations have not contemplated the existence of emergency arbitration, and thus the availability of relief from emergency arbitration may actually preclude parties from obtaining a court-ordered interim relief in some jurisdictions, such as under the English Arbitration Act. Mahesh Rai suggested that there are a few factors to consider: (1) whether you want to give notice to the other party; (2) whether there are third parties involved; and (3) whether it is really urgent. If all three are satisfied, the preference is to go to court. There is always a duty judge in Singapore who can hear the application. He noted that some institutional rules allow for ex parte emergency arbitration, but that is the exception rather than the norm. Vivekananda Neelakantan added that the choice of whether to apply to an emergency arbitrator or a national court would ultimately depend on the jurisdiction of the respondent, as there is some uncertainty in terms of the enforceability of the orders made by the emergency arbitrator.
After weighing the pros and cons of emergency arbitrations, Saemee Kim asked about the best timing to commence an emergency arbitration – whether it should take place before the filing of the request for arbitration or after. Mahesh Rai said this depends on the arbitral rules. Some may require the filing of the request for arbitration within a short period after the party requests for relief from the emergency arbitrator. The purpose of filing the notice of arbitration is to ensure that there is a substantive dispute at play. In Sapna Jhangiani KC’swords, the benefit of starting with a request for arbitration is to put flesh on the bone of the actual claim, and forces parties to articulate the case. Vivekananda Neelakantan shared that for the SIAC Rules, the request for arbitration is to be filed concurrently with the request for emergency arbitration. There is a proposal in the new draft SIAC Rules that there can be disjunctive filing.
On the practical side, Saemee Kim asked how an application for relief from the emergency arbitrator should be drafted. Anne Secomb suggested that the application should not be overburdened with unnecessary details. She noted that it ultimately depends on what the case requires and what the emergency arbitrator requires. Witness statements could be provided to give the emergency arbitrator context of the dispute. In Vivekananda Neelakantan’s experience, he had seen different permutations of whether witness statements are filed with the request for relief. As a general point of guidance, witness statements provide evidence and facts that may not be available in the documents. But if parties require an urgent order from the emergency arbitrator, a witness statement may allow the arbitrator a better understanding of the context.
As to what happens during an emergency arbitration and whether there are hearings, Anne Secomb said that it is common to have hearings, although the timeline is compressed. The hearing is helpful for arbitrators to ask questions. Vivekananda Neelakantan agreed and noted that almost all emergency arbitrator cases he had seen had hearings. In terms of time allocation, the applicant generally has more time to be familiar with the case, while the respondent may require more time to get up to speed with the case. Generally, how the time should be allocated in the procedural timetable is a matter of case management to be left to the emergency arbitrator. Vivekananda Neelakantan said that in deciding how time is to be allocated, emergency arbitrators may often have to work backwards from the 14-day time period within which they have to render a decision.
Moving on from the issues of procedure, Saemee Kim set out the situation where parties file for emergency arbitration during the negotiation period in a multi-tier arbitration clause, where parties are required to negotiate before commencing arbitration, and asked whether this might pose an issue as to the jurisdiction or admissibility of the claim. Vivekananda Neelakantan started by observing that this is a tricky issue. But it is generally accepted in at least Hong Kong and UK that this raises an admissibility issue, rather than a jurisdictional issue. Compliance with the pre-arbitration mechanism is ultimately a factual determination that the emergency arbitrator is entitled to make.
Saemee Kim raised another question about what happens where an arbitration agreement is amended after the emergency arbitration. Sapna Jhangiani KC said that it would depend on the circumstances. For instance, the ICC Rules and the LCIA Rules only apply emergency arbitrator provisions to arbitration agreements entered into after a certain date. Whether there is consent between parties to arbitrate depends on the arbitration agreement and the surrounding circumstances. In principle, one could argue that there is fresh consent when a new arbitration agreement is entered into. Mahesh Rai pointed out that the reference to rules would likely be the rules for the time being in force. Hence, if one was to amend a new arbitration agreement, the applicable rules would be the institutional rules in force at the time of the amendment.
As to the substantive standard of granting reliefs in an emergency arbitration, Anne Secomb shared that the general standard is the balance of convenience, and whether there would be irreparable harm that cannot be made good through the payment of damages. There is also the standard of whether there is prima facie chance that parties will succeed on the merits. Mahesh Rai noted that as an arbitrator, he has asked parties to address him on the issue of the applicable standard. Otherwise the arbitrator may be left in an unenviable position where he or she has not applied their mind to the correct test. Sapna Jhangiani KC added that there could be serious arguments made about what the applicable test is, which could be complicated. It also depends on whether the law of the seat is applied, or the law of the arbitration agreement.
As to the types of reliefs seen in emergency arbitrations, Anne Secomb shared that she has recently dealt with an application to prevent a party from breaching a non-compete clause. But generally, the more typical interim reliefs are to: (1) prevent drawdown on a letter of credit; and (2) prevent share transfer. Vivekananda Neelakantan added that there would also be reliefs seeking to prevent another party from breaching the contract, or from divulging confidential information. Or parties may seek an anti-suit injunction to prevent a breach of the arbitration agreement. Mahesh Rai said for mandatory injunction, the standard of proof would be higher. What he has seen more often in recent times is the application for gag orders. For instance, in investor-state arbitrations, there might be applications to prevent the foreign states from revealing certain information pertaining to the arbitrations.
The panel was asked about whether there could be an ex parte hearing in an emergency arbitration, ie, the interim relief application is heard without notice given to the other party. This could be necessary to prevent the other party from dissipating assets. Sapna Jhangiani KC’s view is that an ex parte hearing would be unusual as arbitration is founded upon consent. Some institutions may consider it possible, but there would be discomfort as a matter of due process. Mahesh Rai acknowledged that there would be some discomfort as a party has the right to be heard. But it could be justified if there is a risk of dissipation of assets. Vivekananda Neelakantan suggested that there is a balance to be struck between due process and efficiency, as ex parte hearings are usually faster.
Saemee Kim then moved on to discussing what happens after an emergency arbitrator has made an order. The question was whether the subsequent arbitral tribunal would be influenced by the decision of the emergency arbitrator. Sapna Jhangiani KC shared that in her experience, she was part of an arbitral tribunal who reached a completely different view from the emergency arbitrator. Usually, the tribunal subsequently constitued would undertake a de novo review with a fresh pair of eyes. Vivekananda Neelakantan said it would depend on what was the emergency arbitrator asked to consider, as the arbitral tribunal may have the benefit of having a more complete set of evidence.
As to what parties may do to enforce the order of the emergency arbitrator, where one side fails to comply with the interim order, Mahesh Rai shared that in one case, they had obtained an order from the court with a penal notice attached, which tended to ensure better compliance. Vivekananda Neelakantan noted that in a recent SIAC emergency arbitration, one party sought punitive damages against the non-compliance of the other party of the emergency arbitration order. It was not granted as there was no real measure of damages that had been provided, and it was found disproportionate in the circumstances. Sapna Jhangiani KC observed that there is a lack of consistency across different jurisdictions as to whether an order by the emergency arbitrator is enforceable. Vivekananda Neelakantan added that in India, there has been a wealth of cases in relation to the enforcement of emergency arbitration orders. Seeking interim relief from the Indian court has been successfully used by some parties as an indirect way to enforce an emergency arbitration order. In such a situation, an ex parte order can be obtained in as fast as a day. Sapna Jhangiani KC also pointed out that during the last survey by Queen Mary University of London, enforceability of the emergency arbitrator awards or orders is one of the factors that would make a seat more attractive to arbitration users.
Saemee Kim concluded the session by thanking the panellists for sharing their insights and experience on emergency arbitrations.
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