Pushing Boundaries With Ex Parte Emergency Arbitration – the Challenges

Pushing Boundaries With Ex Parte Emergency Arbitration – the Challenges

1.Introduction

The approach for ex parte emergency arbitration [“EA”] is fairly divergent. The Rules of Singapore International Arbitration Centre [“SIAC”], International Chamber of Commerce [“ICC”], Swiss Chamber of Commerce and the Arbitrators’ and Mediators’ Institute of New Zealand [“AMINZ”] have differing approaches to ex parte EA. Ex parte EA in the Memo is broken down into three types for better analysis. First, are the EAs where no notice is sent to the Respondent and a decision of the EA is rendered. This is required as an element of surprise is considered as a formidable advantage in circumstances where notice to the Respondent would render the relief infructuous. Naturally, there are concerns of due process and natural justice that are involved in such decisions. This type of ex parte EA is highly contentious among practitioners and institutions alike. Second are the ex parte EAs where the notice is sent to the Respondent, however, a decision is rendered prior to giving the Respondent a chance to reply. There is some consensus regarding such an ex parte EA. Through this memo, it would be my argument that the first and second type of ex parte EA are alike and thus should be accepted by practitioners and institutions. In any case, institutional rules should reflect an acceptance of the second type of ex parte EA. Finally, the third type is ex parte EAs where the Respondent, post a notice, does not participate in the EA. There is widespread acceptance for such kind of ex parte EA. However, through this memo, I also highlight a few instances where the courts have been scrutinised such awards before enforcement to see if notice was appropriately served.

The hesitation of courts globally stems from the adequacy of notice. Assuming EA award is enforceable like an award, it would get almost universal recognition due to the New York Convention [“NYC”].[1] This is also a major advantage of EA. However, its enforceability has been subject to some debate in the courts that have struggled to fit an EA award within the definition of an award under the NYC. This is especially due to lack of enforcement provisions in major global jurisdictions (with the exception of Singapore[2] and Hong Kong[3]). Further, there are also issues with time constraints. An EA has to be appointed, arguments and written submissions exchanged before a decision can be made. This sometimes can take longer than national courts[4], which have the powers to proceed ex parte as well, if necessary. Finally, EA awards do not bind third parties.

The analysis in this memo will be restricted to permissibility of ex parte EA by institutions, enforcement of EA awards and ex parte awards to see what challenges lie for EA moving forward. In Part II, an analysis is undertaken of the approaches of different institutions to ex parte EA. The idea is to elucidate the considerations for institutions that arise while proceeding with the EA ex parte. Major institutions have showed their hesitation in accepting such EAs for fear that such orders may not be enforceable. In Part III, instances of ex parte awards are considered where the Respondent refused to participate. This is done to highlight the importance of notice that is attached by the domestic courts. An analysis of domestic court decisions enforcing EAs is undertaken in Part IV. Not all jurisdictions have procedures to enforce EA awards. Reliance is placed on Indian jurisprudence due to its close connection with SIAC and for being a jurisdiction that is arguably pro-arbitration. Finally, before concluding in Part V, a recommendation is made that the SIAC should adopt ex parte EA.

2.Ex – parte Emergency Arbitration

At the outset, it would be pertinent to elucidate in greater detail the differences between the three types of ex parte EAs. First, are ex parte EA orders where exigent circumstances warrant that no notice be sent to the Respondent. In such cases, without an element of surprise, the remedy sought may be defeated. Such remedies are in the nature of freezing injunctions, preventing the Respondent from parting with its assets. Further, as mentioned above, there is also another category of ex parte EA orders where notice is sent to the Respondent, however, pending a reply, an order is passed ex parte. Such orders are primarily in the nature of status quo orders. Thir