Obtaining swift relief (part 1/2): Interim relief
While arbitration typically allows parties to resolve disputes flexibly and often in less time than obtaining final judgment in litigation proceedings before state courts, receiving an award in complex arbitration proceedings may still take years. However, where urgent relief is needed, arbitration proceedings allow parties to seek interim relief, or, under the rules of some institutions, to commence emergency arbitration even before the arbitral tribunal has been constituted.
Typically, unless the parties have agreed otherwise, parties to an arbitration agreement may be entitled to seek interim relief before the conclusion of the arbitration. A party facing an imminent risk of irreparable harm to its rights may urge for interim relief. As with traditional litigation, the purpose of granting urgent interim relief is typically to protect the interest of the applicant by maintaining the status quo. For example, the applicant may aim to prevent the other party from divesting assets or from disclosing confidential information.
As a general rule, a party to an arbitration agreement can seek interim relief with the arbitral tribunal or competent state courts. Accordingly, some institutional arbitration rules explicitly include mechanisms for granting interim relief. For example, Art. 25 DIS Rules states that at the request of a party, the arbitral tribunal may order interim or conservatory measures, and may suspend or revoke such measures. Similarly, Rule 45.1 SIAC Rules states that the tribunal, at the request of a party, may issue an order or an award granting an injunction or any other interim relief that it deems appropriate.
While not all institutional rules explicitly define requirements for granting interim relief, the threshold for a successful application for interim relief will generally be high. After all, the granting of interim relief affects the parties' liberties even before the substantive dispute has been heard and determined.
The apparent limitation that comes with seeking interim relief from an arbitral tribunal is that such arbitral tribunal must be constituted first. In practice, the constitution of a tribunal can be a lengthy process and conflict with the purpose of receiving urgent interim relief. To address this gap in legal protection through arbitration and enable applications for interim relief in an (confidential) arbitration proceeding even before the arbitral tribunal has been constituted, some institutional rules also include provisions on emergency arbitration (cf. Art. 29 ICC Rules; Rule 12.1 and Schedule 1 SIAC Rules).
While the exact procedure depends on the relevant institutional rules, usually the institution will upon initiation of an emergency arbitration appoint an emergency arbitrator – often within days upon receipt of a request for emergency arbitration. The emergency arbitrator will be required to render their decision within days (e.g., within 14 days from the date of the emergency arbitrator's appointment under Schedule 1, para. 17 SIAC Rules or within 15 days from the transmission of the file to the emergency arbitrator under Art. 6(4) of Appendix V ICC Rules). Especially where institutional rules (such as the DIS Rules) do not provide for an emergency arbitrator, state courts can provide an alternative solution for interim relief.
If granted, the order for emergency relief provides a binding solution for the parties. However, the order for emergency relief may be subsequently modified, terminated or annulled by the arbitral tribunal in the main proceedings (e.g., Art. 29(3) ICC Rules)
Despite the apparent advantages of emergency arbitration proceedings in terms of time, parties must carefully consider on a case-by-case basis whether the initiation of an emergency arbitration can fulfil the intended purpose. It should, for example, be considered that in Germany, there are critical voices regarding the enforceability of orders by the emergency arbitrator.
Where parties would instead prefer a final and binding arbitral award on the dispute in substance and merely enhance the proceeding, opting for an expedited proceeding may be the better choice. Read the upcoming part 2 of this blog post to learn more.
