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Emergency Measures - What are your thoughts?

Many arbitral institutions now incorporate emergency measures of protection into the rules. Is there a guiding practice when a party is better served filing for emergent relief in arbitral proceedings as against court? Where there is mutual party agreement, should an emergency arbitrator continue to serve on the case as part of the Tribunal?

Please provide your thoughts/comments below.

Comments (9)

Mark C. Zauderer:

The ability of arbitrators to address emergent requests for relief is an important feature of arbitration and an opportunity for litigants to obtain close oversight that the courts may not be able to provide. I have been an advocate, an arbitrator, and, by consent, acted with the powers of the Supreme Court. There are times when the neutral must spend time with the parties and get "into the weeds" at a time when the neutral's actions can have a profound effect on the life of the parties. Granting expansive authority to the arbitrator is an enormous benefit to the partiesm


A party needing emergent relief will be better advantaged going to court. In arbitration there is delay commencing a case because of the need to select an arbitrator acceptable to all parties.
Cases can be heard very fast for emergent matters.


With respect to the anonymous comment, I believe the institutions directly appoint the arbitrator, not the parties, and hold a hearing within 24 hours.

Judge Gerald Harris:

The findings of the emergency arbitrator (EA) may or may not be binding on a subsequent Panel. If they are not, the Panel must determine whether to accept or reject them in determining the case in chief. It would be inappropriate,not to say awkward, for the EA to participate in making those determinations.

William G. Bassler:

Whether to go to court or to the institution that appoints an emergency arbitrator does not lend itself to an easy answer because there may be questions that need to be resolved by the court rather than by an arbitral panel.
That being said, in my experience the emergency arbitrator has acted quickly and decisively.
Because the facts found are not found by the arbitral panel I don't think any factual or legal finding would suffice to meet the criteria for claim or issue preclusion or law of the case.

Parties should consider applying to the arbitral tribunal for interim relief when:

* The tribunal has been constituted and is available on short notice.

* The applicant is satisfied that the other party will respect orders issued by the tribunal.

* The federal or state courts at the place of arbitration are reluctant to grant provisional remedies in aid of arbitration (see, for example, Smart Techs. ULC v. Rapt Touch Ireland Ltd, 2016 WL 3871179 (N.D. Cal. July 15, 2016) (declining to entertain motion for preliminary injunction in aid of arbitration in view of availability of emergency arbitrator); and A & C Disc. Pharmacy, L.L.C. v. Caremark, L.L.C., 2016 WL 3476970, at *6 (N.D. Tex. June 27, 2016) (declining motion on the ground that the arbitrator, not the court, should rule on who has the primary power to decide whether the request for preliminary relief is arbitrable)).

* The parties' agreement or the applicable institutional rules empower the arbitral tribunal to grant broader interim relief than would be available in court (see, for example, CE Int'l Res. Holdings LLC v. S.A. Minerals Ltd. Pship, 2012 WL 6178236, at *3-*5 (S.D.N.Y. Dec. 10, 2012) (asset freeze) and Banco de Seguros del Estado v. Mutual Marine Office, Inc., 344 F.3d 255, 263 (2d Cir. 2003) (pre-award security)).

* The respondent is a foreign state (or an agency, instrumentality, or political subdivision of a foreign state). Parties seeking judicial relief against foreign states must follow the procedures of the Foreign Sovereign Immunities Act (FSIA), which is the sole source of subject matter and personal jurisdiction over an action against a foreign sovereign (Mobil Cerro Negro Ltd. v. Bolivarian Republic of Venezuela, 863 F.3d 96 (2d Cir. 2017)). The FSIA service of process provisions (set forth in Section 1608(a) (28 U.S.C. ยง 1608(a))) are tiered in a four-step hierarchical manner than can take months to complete.

* State law requires the posting of security for a particular controversy (see In re MF Glob. Holdings Ltd., 2017 WL 2533353, at *6-8 (Bankr. S.D.N.Y. June 12, 2017)).

The parties will have had no input on the selection of the emergency arbitrator. Therefore, the selection of merits tribunal should follow regular order.

Sanjay Shah:

We just had a lengthy and expensive second arbitration (waiting for the arbitration award). I, as a small business claimant, asked my lawyer why we couldn't get emergency protection of our interests based on the plain reading of the arbitration award. The Respondent was making the same arguments that were rejected by the first arbitration award. Fortunately, the second arbitrator didn't allow those arguments to be entered, saying rightly that the matters were settled. But, if we had the ability to ask for emergency protection based on the plain reading of the arbitration award, we would have been spared the agony and wait for going through the second one.

There is definitely a need for not just emergency protection but for injunctive relief.

Judge George D. Marlow (ret.):

Sometimes it depends on which is the appropriate jurisdiction in which to ask for emergency relief. If it is in a crowded court environment, one may very well be better off seeking emergency relief from a qualified AAA arbitrator. The choice of a separate arbitrator from the one or ones assigned to a case, or using one of the assigned arbitrators really presents a case-sensitive choice on the part of the applicant.

Margarita Echevarria:

Rule 38(f) of the AAA Commercial Rules indicates that the emergency arbitrator shall have no further power to act after the panel is constituted unless the parties agree that the emergency arbitrator is named as a member of the panel. Thus, it would appear that mutual agreement of the parties does allow for the emergency arbitrator to continue as part of the Tribunal.

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