LEGAL STATUS OF THE EMERGENCY ARBITRATOR UNDER THE SIAC 2010 RULES

• Citation: (2011) 23 SAcLJ 93
• Date: 01 December 2011
• Published date: 01 December 2011
• Author: LYE Kah Cheong LLB (Hons) (National University of Singapore), LLM (King‘s College, London); FSIArb; Advocate & Solicitor (Singapore), Solicitor (England & Wales); Partner, Norton Rose (Asia) LLP. YEO Chuan Tat LLB (Hons) (National University of Singapore); Advocate & Solicitor (Singapore), Solicitor (England & Wales); Associate, Norton Rose (Asia) LLP. William MILLER LLB (Hons) (University of Warwick); Trainee, Norton Rose (Asia) LLP.

Neither Fish nor Fowl?

The Singapore International Arbitration Centre released its new arbitration rules in July 2010. These new rules contain an innovative provision for an “Emergency Arbitrator” to hear applications for interim relief made in the time before the tribunal is constituted. Certain features of the Emergency Arbitrator may cast doubt over its legal status, and the legal effect of its orders. Also unresolved is the nature of the legal relationship between the Emergency Arbitrator and the eventual tribunal. In this article, the authors postulate that the Emergency Arbitrator and the eventual tribunal are part of the same arbitral tribunal within the meaning of the International Arbitration Act (Cap 143A, 2002 Rev Ed), and that the orders of the Emergency Arbitrator are legally enforceable under that statute.

I. Introduction

1 As in litigation, parties in an international arbitration1 occasionally require urgent interim relief. In some cases, interim relief can be a vital tool used by parties to preserve assets as well as to protect other rights.2 Such interim relief can manifest itself in a variety of forms, ranging from requiring the respondent not to initiate any actions before national courts and not to disseminate information regarding the dispute to the press, to enjoining the claimant from preventing the respondent from removing its equipment from a disputed work site.3

2 In Singapore, as in other modern jurisdictions, the approach is to empower the tribunal to deal with interim relief applications4, rather than to rely on national courts to provide interim relief. In Singapore, the courts‘ position is that where the tribunal has the power to order interim relief, the courts will not hear applications for such relief5 and will refer the parties instead to the tribunal.

3 Leaving interim relief applications to the tribunal does create a jurisdictional void if a party wishes to make an application for interim relief before the tribunal has been constituted. Typically, it may take a few weeks from the start of the arbitration to constitute the tribunal. Until recently, in Singapore, the parties‘ main form of recourse for such interim relief prior to the constitution of the tribunal was by making applications for interim relief to the Singapore court.6 Any such court-

granted relief is a temporary measure and generally lapses upon constitution of the tribunal7.

4 Some other international arbitration institutions8 in modern jurisdictions have sought to reduce the involvement of national courts through the introduction, in various forms, of an “arbitrator” to whom the parties can apply for emergency interim relief in the period prior to the constitution of the tribunal. This is not a new idea. For example, the International Chamber of Commerce (“ICC”) rules on the Pre-Arbitral Referee were issued in 1990. However, since the extensive revision of the United Nations Commission on International Trade Law Model Law on International Commercial Arbitration (“Model Law”) provisions on interim measures in 2006,9 there has been a growing trend in international arbitration towards using non-court regimes to deal with interim relief applications made before the constitution of the tribunal.10

5 In July 2010, the Singapore International Arbitration Centre (“SIAC”) adopted new rules. These were the SIAC Rules (4th Ed, 1 July 2010) (“SIAC 2010 Rules”). These new rules allow the referral of early applications for interim relief to a non-court forum. The effect of this rule change is that parties to an SIAC arbitration making interim relief applications before the constitution of the tribunal (as defined in the SIAC 2010 Rules) can now seek urgent interim relief from a body other than the Singapore court.11

6 This article will examine the legal status of the Emergency Arbitrator and the legal effect of an interim relief order made by the Emergency Arbitrator.

II. The Emergency Arbitrator regime under the SIAC 2010 Rules

7 A party requiring emergency interim relief prior to the constitution of the tribunal may make an application for emergency interim relief concurrently with, or following, the filing of the notice of arbitration.12 The requesting party is required to notify the Registrar of the SIAC and all other parties in writing of the application (in particular, the type of relief sought) and the reasons supporting the application.13

8 If the Chairman of the SIAC determines that the SIAC should accept the application, he will appoint a person to determine the application (the Emergency Arbitrator). The Chairman of the SIAC will seek to make this appointment within one business day of receipt by the Registrar of the application (and payment of any fee required under the SIAC 2010 Rules).14

9 The Emergency Arbitrator shall, as soon as possible, but in any event within two business days of appointment, establish a schedule for consideration of the application for emergency interim relief.15 This schedule shall “provide a reasonable opportunity for all parties to be heard, but may provide for proceedings by telephone conference or on written submissions as alternatives to a formal hearing”.16

10 The Emergency Arbitrator has the powers vested in a tribunal pursuant to the SIAC 2010 Rules, including the authority to rule on its own jurisdiction.17 However, the Emergency Arbitrator may not act as an arbitrator in any future arbitration relating to the dispute, unless agreed by the parties.18

11 The Emergency Arbitrator has the power to order any interim relief it deems necessary, and shall give reasons for its decision in writing.19 It may also modify or vacate its interim orders if good cause is shown.20 The Emergency Arbitrator will have no further power to act after the tribunal tasked with hearing all aspects of the dispute submitted to it (and not only any application for interim emergency relief) is constituted.21 In this article, the tribunal tasked with hearing all aspects of the dispute submitted is termed the “Merits Tribunal”. The Emergency Arbitrator may make its order conditional upon provision of security by the party seeking the interim relief.22 The SIAC 2010 Rules also expressly state that the parties agree to comply with the Emergency Arbitrator‘s order without delay.23

12 The Merits Tribunal has the power to reconsider, modify or vacate the Emergency Arbitrator‘s order for interim emergency relief, and is not bound by the reasons given by the Emergency Arbitrator.24 The Emergency Arbitrator‘s order shall, in any event, cease to be binding if the Merits Tribunal is not formed within 90 days of the order, or when the Merits Tribunal makes a final award, or if the claim is withdrawn.25

III. Legal status of the Emergency Arbitrator and the legal effect of the orders for interim relief of the Emergency Arbitrator - Source of the doubts

13 There are several legal peculiarities about the Emergency Arbitrator not commonly associated with a normal tribunal. These peculiarities may give rise to doubts as to the legal status of the Emergency Arbitrator, and consequently, the legal effect of an order made by an Emergency Arbitrator.

14 The first peculiarity about the Emergency Arbitrator is that its orders are not final.

15 The second peculiarity about the Emergency Arbitrator is that it is apparently not empowered under the SIAC 2010 Rules to rule on the substance of the dispute.

16 The combined effect of these two peculiarities raises questions as to whether the Emergency Arbitrator is an “arbitral tribunal” within the terms of the International Arbitration Act26 (“IAA”), and whether the orders of the Emergency Arbitrator are “arbitral awards” under the 1958 United Nations Conference on International Commercial Arbitration Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”).

17 These are questions of practical importance. If the Emergency Arbitrator is not an “arbitral tribunal” within the terms of the IAA,27 its orders cannot be enforced in Singapore. If the orders of the Emergency Arbitrator are not “arbitral awards” under the New York Convention, those orders cannot be enforced outside of Singapore under that convention.

18 Orders not final - the SIAC 2010 Rules, Sched 1 para 7, state that “the Tribunal may reconsider, modify or vacate the interim award … any order or award … shall … in any event, cease to be binding if the Tribunal is not constituted within 90 days of such order or award or when the Tribunal makes a final award or if the claim is withdrawn”. The SIAC 2010 Rules also state at Sched 1 para 6 that “the Emergency Arbitrator may modify or vacate the interim award or order for good cause shown”.

19 On a plain reading, it seems clear the “order or award” made by the Emergency Arbitrator is not final. There are some arguments to the contrary, and those are discussed below.28 However, the starting position seems to be that the orders of the Emergency Arbitrator are not final.

20 Apparent inability to rule on the substance of the dispute - there is a degree of uncertainty regarding the exact jurisdiction of the Emergency Arbitrator under the SIAC 2010 Rules. The Emergency Arbitrator has jurisdiction to “order or award any interim relief that [it] deems necessary” [emphasis added].29 The Emergency Arbitrator may “modify or vacate the interim award or order for good cause shown” [emphasis added].30 The word “award” is defined in r 1.331 as “any

decision of the Tribunal on the substance of the dispute” [emphasis added]. On a purely textual approach, this suggests the Emergency Arbitrator has the power to rule on the substance of the dispute.

21 However, a reading of the entirety of Sched 1 shows the whole tenor is to limit the role of the Emergency Arbitrator to making orders of emergency interim relief. This interpretation better expresses the intention of the SIAC 2010 Rules as opposed to an...