Thực trạng của hệ thống trọng tài khẩn cấp tại các tổ chức trọng tài quốc tế lớn và hàm ý cho Việt Nam

Nội dung text: Thực trạng của hệ thống trọng tài khẩn cấp tại các tổ chức trọng tài quốc tế lớn và hàm ý cho Việt Nam

1. CURRENT STATUS OF EMERGENCY ARBITRATOR SYSTEM AT MAJOR INTERNATIONAL ARBITRATION INSTITUTIONS AND IMPLICATIONS FOR VIETNAM THỰC TRẠNG CỦA HỆ THỐNG TRỌNG TÀI KHẨN CẤP TẠI CÁC TỔ CHỨC TRỌNG TÀI QUỐC TẾ LỚN VÀ HÀM Ý CHO VIỆT NAM Keon-Hyung Ahn3 - Daejeon University Abstract Although preference for arbitration has been rapidly growing in international commercial transactions, one aspect of the arbitral proceedings that raised concerns in the past was the problem of urgent interim relief. Before the constitution of the arbitral tribunal, parties did not have any other option but to turn to the court for urgent interim relief. In order to remedy this problem and to enhance the effectiveness of arbitral proceedings, major international arbitration institutions have recently adopted the emergency arbitrator system. This paper describes and analyzes the current status of the emergency arbitrator systems employed by the International Center for Dispute Resolution (ICDR), the Singapore International Arbitration Centre (SIAC), the International Chamber of Commerce (ICC) and the Korean Commercial Arbitration Board (KCAB). It then compares the various aspects of the respective emergency arbitrator system, and presents matters to be considered when introducing the emergency arbitrator system into the rules of an arbitration institution in Vietnam. Keywords: Emergent Interim Relief, Emergency Arbitrator, Art. 6 of the International Arbitration Rules of the ICDR, Art. 30 of the SIAC Arbitration Rules and Schedule 1, Art. 29 of the ICC Arbitration Rules and Annex 5, and Art. 32 of the KCAB International Rules and Annex III. Tóm tắt Mặc dù xu hướng sử dụng trọng tài thương mại đang gia tăng nhanh chóng trong các giao dịch thương mại thế giới nhưng một khía cạnh của quá trình giải quyết khiếu nại làm dấy lên sự lo ngại trong thời gian gần đây là vấn đề về biện pháp khẩn cấp tạm thời (urgent interim relief). Trước khi thành lập toà trọng tài, các bên không có bất cứ lựa chọn nào khác mà phải tìm đến toà án để có biện pháp khẩn cấp tạm thời. Để giải quyết vấn đề này và nâng cao hiệu quả của quá trình tố tụng, các tổ chức trọng tài quốc tế gần đây đã thông qua hệ thống trọng tài khẩn cấp. Bài báo này mô tả và phân tích thực trạng của hệ thống trọng tài khẩn cấp được áp dụng tại Trung tâm giải quyết tranh chấp quốc tế (ICDR), Trung tâm trọng tài quốc tế 3 Dr. Ahn is an Assistant Professor of International Commerce at Daejeon University, Daejeon, Korea and he is serving the position of Deputy Director who is responsible for international cooperation of the Korea Trade Research Association (“KTRA”) and he has been serving the additional position of Managing Editor of the Journal of Korea Trade (“JKT”) which is published by the KTRA and the journal is recognized by the Social Science Citation Index (SSCI). 106
2. Singapore (SIAC), Phòng thương mại quốc tế (ICC) và Hội đồng trọng tài thương mại Hàn Quốc (KCAB). Bài báo cũng so sánh các khía cạnh khác nhau của hệ thống trọng tài khẩn cấp và nêu lên các vấn đề cần xem xét khi đưa hệ thống trọng tài khẩn cấp vào quy định của tổ chức trọng tài ở Việt Nam. Từ khoá: Biện pháp giải quyết khẩn cấp, Trọng tài khẩn cấp, Điều 6 của Quy định trọng tài quốc tế của ICDR, Điều 30 của Quy định trọng tài SIAC và Khoản 1, điều 29 của Quy định trọng tài ICC và phụ lục 5, điều 5 của quy định quốc tế KCAB và phụ lục II I. Introduction With the acceleration of the global economy, many companies are entering into an increasing number of international trade contracts with foreign companies. While carrying out duties under such contracts, small and/or big breaches of contract are often bound to arise, and such contract breaches arise either deliberately or out of simple misunderstanding or errors. If a party to the contract unilaterally breaches its obligation in the course of fulfilling the contract, the other party would file a lawsuit to rectify the breach. With regard to such disputes, there has been a rapid growth in the preference for international arbitration over international litigation among trading companies.4 Such preference can be attributed to the various advantages of the arbitration system, such as speediness, confidentiality, universal validity of judgments made by arbitrators who are renowned specialists of their fields. However, it seems that the most noted advantage is the fact that the arbitral award is granted according to the 1958 Convention on the Enforcement and Recognition of Foreign Arbitral Awards (also known as the New York Convention), and it is much more stable, and recognized and enforced much faster than a decision granted by the courts.5 Despite such advantages of arbitration, there was one critical disadvantage that was inherent in the system, and that was the issue related to interim relief.6 7 During arbitration proceedings, it is necessary to grant various orders to preserve evidence, protect assets, or maintain the status quo of the results of pending arbitrations.8 Such measures are deemed necessary as timely application and enforcement of interim measures can make a decisive impact on the enforceability of the final arbitral award.9 In other words, to guarantee the efficiency and reliability of arbitration, one of the pending 4 For example, in Korea 413 arbitration cases (339 domestic cases and 74 international cases) were filed with the Korean Commercial Arbitration Board (KCAB) in 2015, and it was the greatest number of cases since 1966 when the KCAB was established. However, there has been a slight decrease - 381 new cases - in 2016. 5 Angola was the 157th nation to sign the New York Convention on March 6, 2017, and it will enter into force on June 4, 2017. 6 In this paper, the term “interim relief” is used as a general concept that includes the concepts of “interim”, “conservatory”, “provisional measures”, “interim measures of protection”, and such. 7 See Keon-Hyung Ahn, Michael Lee & Won-Suk Oh, “A Study on the Emergency Arbitrator System of AAA/ICDR,” Korea International Commerce Review, vol.26 No.3, at 134 (Korean Academy of International Commerce, Inc., June 2011) (hereafter, “Ahn/Lee/Oh”). 8 See Nigel Blackaby, Constantine Partasisdes, Alan Redfern, and Martin Hunter, Redfern and Hunter on International Arbitration, 5th Edition, para. 5.24 (Oxford University Press, 2009) (hereafter, “Blackaby, Partasides/Redfern/Hunter”). 9 See Natalija Kaminskiene, Application of Interim Measures in International Arbitration: The Lithuanian Approach, Jurisprudencija/Jurisprudence at 244 (MykoloRomerio University, 2010) (hereafter, “Kaminskiene”). 107
3. issues that need to be resolved is the enhancement of the effectiveness of interim measures.10 In international arbitrations, a party can either choose to apply to the court for interim measures or provide the arbitral tribunal with the authority to grant such measures.11 However, the problem lies in the fact that it is impossible for a party to seek an interim relief before the composition of the arbitral tribunal, and has no other option but to apply to the courts for such measures. In order to resolve such problems related to interim measures, major arbitration institutions in different nations are employing the “Special Arbitrator” system,12 “Expedited Formation of the Tribunal” procedure,13 “Summary Arbitral Proceedings”,14 and the “Emergency Arbitrator” system.15 16 This paper will examine only on the emergency arbitrator system, among others, employed by some leading arbitration institutions and will try to deduct implications thereof so that any Vietnamese arbitration institution, for example, the Vietnam International Arbitration Center (VIAC), may introduce the emergency arbitrator system into their rules. The author hope that this research will assist practitioners in both the commercial and legal fields in gaining a more detailed knowledge of the necessity of the emergency arbitrator system. II. Current Status and Comparative Analysis of the Emergency Arbitrator System at Major International Arbitration Institutions 1. Introduction As seen above, certain arbitration institutions are continuously endeavoring to develop innovative ways to meet the needs of parties that use the arbitration system. One such method is the emergency arbitrator system. In a reality where it takes many days from the start of arbitration proceedings to the formation of the arbitral tribunal, parties that seek urgent interim relief cannot wait until the arbitral tribunal is formed. The parties have no other way but to request an interim relief from the court. Such a critical flaw can only become a stumbling block to the development of the arbitration system. To identify and solve this problem, 1) AAA/ICDR, 2) SIAC, 3) ICC, and 4) KCAB have implemented the emergency arbitrator system in such order. The current status of the implementation of the emergency arbitrator system by each arbitration institution will be discussed below. 10 See Ahn/Lee/Oh, op. cit., at 134. 11 See Young-jun Mok, Commercial Arbitration Law, 182 (Pakyoungsa, 2011). 12 It is a system based on Article 14 of the Rules for Non-Administered Arbitration of the International Institute for Conflict Prevention and Resolution (CPR) in the United States. 13 Note Article 9 of the Arbitration Rules of the London Court of International Arbitration (LCIA). 14 Note Article 42a through 42o of the Arbitration Rules of the Nederlands Arbitrage Instituut (NAI). 15 Note Article 37 of the ICDR International Arbitration Rules, Article 32 of the SCC Arbitration Rules and Appendix II, Article 26 of the SIAC Arbitration Rules and Schedule 1, Article 29 of the ICC Arbitration Rules and Appendix V. 16 The ICC International Court of Arbitration enacted the PAR Rules to govern the Pre-Arbitral Referee Procedure in 1990, but it was used infrequently because the provision was implemented as an opt-in clause, where the parties could use it only if they explicitly made an agreement in the arbitration agreement to use this procedure in addition to the arbitration procedure. This procedure was revised with the amendment of the arbitration rules on September 12, 2011 (put into effect on January 1, 2012), and the emergency arbitrator system replaced the Pre-Arbitral Referee Procedure; therefore, it will not be discussed in this paper as it will not prove to be useful at this point. 108
4. 2. Introduction to the implementation of the emergency arbitrator system by each arbitration institutions (1) AAA/ICDR Before the regulations for the emergency arbitrator system had been enacted and went into effect on May 1, 2006, parties needed to expressly agree to the use of emergency arbitrators according to the Optional Rules for Urgent Interim Relief.17 In other words, even though the parties agreed to follow the arbitration rules of the AAA/ICDR in the arbitration agreement, unless they explicitly agreed to apply the Optional Rules in a separate agreement, such procedures could not be used.18 Therefore, in practice, these Optional Rules were rarely used.19 In order to remedy this weakness, ICDR was the first arbitration institution in the world to introduce the emergency arbitrator system under Article 37. Based on Article 37 of the ICDR International Arbitration Rules which went into effect from May 1, 2006, there have been 17 requests for urgent interim relief as of May 30, 2011 and of these, 7 requests were cited by emergency arbitrators, 4 cases were denied, 4 cases settled during the proceeding.20 Also, one case was dismissed and one case is untraceable.21 AAA/ICDR’s most recent revised International Arbitration Rules went into force on June 1 2014 and there was almost no change in content but provision number change from Article 37 to Article 6 in the Rules. (2) SIAC SIAC amended its rules by adding Article 26 and Schedule I regarding emergency arbitrators, and these rules went into effect on July 1, 2010.22 Like the other arbitration institutions, parties had no option but to request an interim relief from the court if the arbitral tribunal had not been formed yet, before the amended rules went to into effect on July 1, 2010. At SIAC, there were 3 cases requesting emergency arbitrators during the 7 months between July 1, 2010 and February, 2011. All three cases requesting emergency arbitrators were accepted to receive by the President of the SIAC.23 SIAC’s most recent revised Arbitration Rules went into force on August 1 2016 and there were a few change of provisions, among others, a new provision that the deadline for an emergency arbitrator to 17 See G. Lemenez & P. Quigley, The ICDR’s Emergency Arbitrator Procedure in Action, Part 1: A Look at the Empirical Data, Dispute Resolution Journal (August/October 2008) at 2 (hereafter “Lemenez/Quigley, Part 1 (August/October 2008)”). 18 Article O-1 of the AAA Commercial Arbitration Rules and Mediation Procedures, September 15, 2005. 19 Lemenez/Quigley, Part 1 at 2 (August/October 2008). 20 According to Attorney Michael Lee, the Head of the Asia Office in Singapore of the AAA/ICDR, in one case that was settled during the emergency arbitrator procedure, the decision was written in the form of a settlement award. 21 Ahn/Lee/Oh, op. cit., at 139. 22 Article 26 and Schedule 1 of SIAC Arbitration Rules [2010]. 23 See J. Leach & J. Berenholtz, The Expected an Emergency Arbitrator Procedures Under The SIAC Rules - Six Months On, How Have They Fared?, available at &view=article&id=248:expedited-emergency&catid=56:articles&Itemid (accessed 28-11-2011) (hereafter “Leach/Berenholtz”). 109
5. make his interim order or Award within 14 days from the date of his appointment was introduced.24 (3) ICC The old arbitration rules of the ICC which were applied since 1998 were amended on September 12, 2011, and the newly added provisions regarding emergency arbitrators, Article 29 and Annex V of its Rules went into effect on January 1, 2012.25 The ICC had already implemented the “Rules for a Pre-Arbitral Referee Procedure” on September 1, 1990, but only 5 cases were filed up to 2005.26 This low number could be attributed to the fact that parties that wished to use this procedure had to enter a separate explicit agreement to apply such procedural rules besides the arbitration rules. The ICC had also adopted the emergency arbitrator in this opt-out clause method. ICC’s most recent revised Arbitration Rules went into force on March 1 2017 and there was almost no change in content in relation to emergency arbitrator system. (4) KCAB Article 32 and Appendix III of the KCAB International Arbitration Rules contains amended provisions regarding the emergency arbitrator system, and went into effect on June 1, 2016.27 Before the amendments went into effect, the parties to arbitration had no other option but to request an interim relief from the court if the arbitral tribunal had not been formed yet. Moreover, parties had the disadvantage of having no choice but to wait a considerable period from either before the request for arbitration or after the request until the formation of the arbitral tribunal. There has been no case at the KCAB requesting an emergency arbitrator to date after the amended arbitration rules went into effect. (5) Sub-conclusion The first arbitration institution which adopted the emergency arbitrator system was the ICDR, and later SIAC, ICC, and KCAB followed behind. As mentioned above, all the institutions chose to adopt a system with an opt-out clause where one of the parties could automatically request the appointment of an emergency arbitrator, unless the parties made a separate agreement to exclude interim relief granted by emergency arbitrators. With regard to the composition and system of the ICC rules, the ICC rules provide interim relief in Article 28 and then, the emergency arbitrator system is separately regulated in Article 29. The emergency arbitrator system is included in the article setting forth interim relief and is dealt with in a general manner,28 but the details are then laid forth in the Appendix V,29 and this differentiates the ICC rules from those of the ICDR and SIAC. It seems that the KCAB substantially adopted the descriptive manner and content of those of the ICC and the SIAC. The ICC Arbitration Rules and the SIAC Rules are detailed and practical, and this may be based on the fact that the KCAB took into consideration the precedents and the current status of emergency arbitrator systems employed by the two 24 Schedule 1.9 of SIAC Arbitration Rules [2016]. 25 Article 29 and Appendix V of the ICC Rules of Arbitration [2012]. 26 Hosking/Valentine/Lindsey, op.cit at 5. 27 Article 32 and Appendix III of the KCAB International Arbitration Rules [2016]. 28 Article 28 of ICC Rules of Arbitration [2017]. 29 Appendix V of ICC Rules of Arbitration [2017]. 110
6. arbitration institutions mentioned above when it amended the Rules and put them into effect. The following table illustrates the above point. Amendment to the Rules of Institutions and the Effective Dates Thereof Category KCAB ICC SIAC ICDR First Effective June 1, 2016 January 1, 2012 June 1, 2010 May 1, 2006 Date June 1, 2016 March 1, 2017 August 1, 2016 June 1, 2014 Current Effective Date Composition and Art. 32 Art. 29 Art. 30 Art. 6 System of the (Emergency (Emergency (Interim & (Emergency Rules Measures by Arbitrator) of Emergency Measures of Emergency Arbitration Interim Relief) Protection) of Arbitrator) of Rules & of Arbitration International International Appendix V Rules & Arbitration Arbitration Rules (Arts. 1-8) Schedule I Rules & Appendix III (Arts. 1-14) (Arts. 1-5) Source: Authors have summarized and formed the table based on the Rules of the KCAB, ICC, SIAC and ICDR. 1. A Comparative Analysis of the Emergency Arbitrator System of the Various Arbitration Institutions In the previous section, the paper discussed the history and current status of the emergency arbitrator system implemented and applied by four leading international arbitration institutions. The formation and system of the arbitration rules have also been discussed. The following section will compare and review the procedures for the emergency arbitrator mentioned in the aforementioned rules, according to their order. (1) Application and costs Although the rules for all four arbitration institutions require that the application for urgent interim relief be submitted before the composition of the arbitral tribunal, but there are slight differences. With regard to ICDR, SIAC and KCAB, application is possible at the same time the request for arbitration is submitted or thereafter,30 but the ICC allow the parties to submit the application for an emergency arbitrator before the request for arbitration is submitted.31 Once the application for an emergency arbitrator is submitted, the application is processed only after it has been accepted. Acceptance of an application is determined by 30 Article 6(1) of ICDR International Arbitration Rules [2014]; Schedule 1.1 of SIAC Arbitration Rules [2016]. 31 Article 29(1) of ICC Rules of Arbitration [2017]. 111
7. the chairman at both the ICC and SIAC,32 while the ICDR and the KCAB are silent as to this issue.33 With regard to the application costs, there are no administrative fees that have been set for the Secretariat of the ICDR,34 but there are fees charged by the other three institutions.35 These fees are set according to the schedule in the rules without regard to the amount in dispute, and are to be paid in advance. However, in the case of SIAC, there is a dual structure for the fees - the fees charged for nationals and foreigners differ.36 In terms of the arbitrators’ fees, the fees of the ICC, KCAB and SIAC are set without regard to the amount in dispute.37 They also differ from ICDR where the arbitrators’ fees are fixed at an hourly rate agreed upon by the emergency arbitrator, the ICDR and the parties.38 Also, in the case of ICDR, if 50% of the deposit is paid, the emergency arbitrator proceedings can be initiated,39 but the other arbitration institutions require full payment.40 Application and Costs Category KCAB ICC SIAC ICDR Time Limit for From Request for Before the From Request for From Request for Application Arbitration to the Constitution of Arbitration to the Arbitration to the Constitution of Tribunal Constitution of Constitution of Tribunal (possible before Tribunal Tribunal Request for Arbitration) Decision- Not expressly President of the President of the Not expressly maker for stipulated but Court Center stipulated but Acceptance of presumably the presumably the Application Secretariat Administrator Administrative KRW 3,000,000 USD 10,000 Domestic Party: None Fees SGD 5,350 (including 7% GST) Int’l Party: 32 Article 29(1) of ICC Rules of Arbitration [2017]; Schedule 1.3 of SIAC Rules of Arbitration [2016]. 33 However, one can presume that it is the Secretariat that decides as to whether accept or not a request for emergency arbitrator having regard to Article 1 of the Appendix III of the KCAB International Arbitrational Rules. 34 According to Michael Lee, the Head of the Asia Office for ICDR, the emergency arbitrator system was one of many systems formed to satisfy the needs of clients who chose to arbitrate, and the initial policy was to not charge an administrative fee. 35 Article 7 of Appendix V of ICC Rules of Arbitration [2017]; SIAC Schedule of Fees [2016]; Secretariat’s administrative fees under Article 3 of Appendix I, and the emergency arbitrator’s fess under Article 3 of Appendix II, KCAB International Rules [2016]. 36 See SIAC’s Emergency Interim Relief Fees, available at 20Rules%202016%20English_28%20Feb%202017.pdf (accessed at 18:30 on 28 March 2017). 37 Article 7 of Appendix V of ICC Rules of Arbitration [2012]; Article 3 of Appendix II, KCAB International Rules [2016]; SIAC Schedule of Fees [2016]. 38 Lemenez/Quigley, Part 1 at 7 (August/October 2008). 39 Ibid. 40 Article 1(6) of Appendix III of KCAB International Rules [2016]; Schedule 1.2 of SIAC Arbitration Rules [2016]; Article 1(3)(h) and 7(1) of Appendix V of ICC Rules of Arbitration [2017]. 112
8. SGD 5,000 Arbitrator’s KRE 15,000,000 USD 30,000 SGD 25,000 Arbitrator’s rate Fees (plus SGD 5,000 & Time Charge for emergency arbitrator’s expenses) Deposit 100% Deposit 100% Deposit 100% Deposit 50% Deposit Requirement Reimbursement Not refundable The President Not refundable Not stipulated Provision shall determine the amount, if any. But USD 5,000 for ICC administrative expenses is non- refundable Source: Authors have summarized and formed the table based on the Rules of the KCAB, ICC, SIAC and ICDR. (2) Appointment of and Challenge to Emergency Arbitrators The appointment of emergency arbitrators is to be conducted within 1 business day and 1 day, respectively, from the date of Receipt of Application for the ICDR and the SIAC,41 and for the ICC and the KCAB, within 2 days and 2 business days, respectively, from the date of Receipt of Application.42 In terms of deadlines, the order follows as such - ICDR, SIAC > ICC > KCAB. With regard to the challenge of arbitrators, ICDR requires the challenge be filed within 1 business day from the date the notice of the appointment is received,43 whereas KCAB requires the challenge be filed within 2 business days of knowledge of the grounds for challenge,44 and for SIAC, the time limit is within 2 days of the communication by the Registrar to the parties of the appointment of the emergency arbitrator and the circumstances disclosed,45 and ICC, the time limit is within 3 days.46 The order for quickest deadlines is as follows - ICDR > SIAC > KCAB > ICC. Requirements for Appointment of & Challenge to Emergency Arbitrators Category KCAB ICC SIAC ICDR Appointment Within 2 Business Within 2 days Within 1 day Within 1 Business days from the date from the date of from the date of days from the date of Receipt of Receipt of Receipt of of Receipt of 41 Article 6(2) of ICDR International Rules of Arbitration [2014]; Schedule 1.3 of SIAC Arbitration Rules [2016]. 42 Article 2(1) of Appendix V of ICC Rules of Arbitration [2017]; Article 2(4) of Appendix III of KCAB International Arbitration Rules [2016]. 43 Article 6(3) of ICDR International Rules of Arbitration [2014]. 44 Article 2(6) of Appendix III of KCAB International Arbitration Rules [2016]. 45 Schedule 1.5 of SIAC Arbitration Rules [2016]. 46 Article 3(1) of Appendix V of ICC Rules of Arbitration [2017]. 113
9. Application Application Application Application Time Limit Within 2 Business Within 3 days Within 2 days Within 1 business for days from the date from the date from the date day from the date Challenge when party was when party was when party was when party was informed of facts informed of facts communicated by communicated by and circumstances and the Registrar of the Administrator or the date on circumstances the appointment of the appointment which the party of emergency of emergency receives the Notice arbitrator and the arbitrator and the of Appointment of circumstances circumstances the emergency disclose disclose arbitrator Source: Authors have summarized and formed the table based on the Rules of the KCAB, ICC, SIAC and ICDR. (3) The Proceedings and Decisions of Emergency Arbitrators The appointed emergency arbitrator must establish the procedural timetable or schedule as soon as possible, and under the arbitration rules of the ICDR and KCAB, the timetable or the schedule must be established within two business days,47 and under the ICC rules and the SIAC rules, the timetable must be established within two days from the transmission of the files to the emergency arbitrator.48 With regard to the form of the decision, SIAC, KCAB and ICDR all grant the emergency arbitrator the discretionary power to choose between an order or an award,49 but it is interesting to note that the ICC which adopted the emergency arbitrator system only recently stipulates that the decision made by the emergency arbitrator can only take the form of an order.50 In addition, under the ICC rules, if the request for arbitration is not received by the secretariat from the applicant within ten days of the secretariat’s receipt of the application, the emergency arbitrator proceeding is terminated by the president.51 In contrast, the KCAB International Rules stipulates that the emergency decision is no longer binding if the request for arbitration is not filed within 3 months after the emergency decision is made or if the arbitration proceeding is terminated because the continuation of the arbitration proceedings has become unnecessary or impossible for any reason, such as withdrawal of the Request for Arbitration or failure to pay the Advance on Costs.52 The SIAC arbitration rules also stipulates that if the arbitral tribunal is not composed within 90 days of the emergency decision or when the Tribunal makes a final Award or if the claim is withdrawn, the decision made by the emergency arbitrator ceases 47 Article 6(3) of ICDR International Rules of Arbitration [2014]; Article 3(2) of Appendix III of KCAB International Arbitration Rules [2016]. 48 Article 5(1) of Appendix V of ICC Rules of Arbitration [2012]; Schedule 1.7 of SIAC Arbitration Rules [2016]. 49 Schedule 1.8 of SIAC Arbitration Rules [2016]; Article 32(2) of KCAB International Arbitration Rules [2016]; Article 6(4) of ICDR International Rules of Arbitration [2014]. 50 This will be discussed in Chapter IV below, and will not be discussed here. 51 Article 1(6) of Appendix V of ICC Rules of Arbitration [2017]. 52 Article 3(6)(a) and (b) of Appendix III of KCAB International Arbitration Rules [2016]. 114
10. to be binding.53 The ICDR only set forth that the emergency arbitrator shall have no further power to act after the arbitral tribunal is constituted.54 The arbitration rules of all four institutions state that the decision can be amended, revoked or cancelled if there are sufficient grounds.55 This same power is granted to the arbitral tribunal that arbitrates over the merits of the case. Also, there is a question as to whether an emergency arbitrator can act as a member of the arbitral tribunal when judging the merits of the same case. The ICC do not permit an emergency arbitrator to arbitrate over the same merits as part of the arbitral tribunal,56 while the other rules prohibit such instances when the parties do not conclude a separate agreement to allow the emergency arbitrator to do so.57 Lastly, all arbitration rules provide that the emergency arbitrator may make an order subject to security that is provided by the party that applied for the urgent interim relief.58 It seems that such a provision was included to prevent any abuse of the application for urgent interim relief. The information that has been compared and analyzed above has been organized into a table set forth below. Proceedings and Decisions of Emergency Arbitrators Category KCAB ICC SIAC ICDR Time Limit for Within 2 Within 2 days after Within 2 business Within 2 Establishment business days transmission date of days after business days of Schedule after the File to the constitution of the of his or her constitution of Tribunal Tribunal appointment the Tribunal Time Limit for Within 15 days Within 15 days Not stipulated Not stipulated Rendering from his or her after transmission Decision appointment date of the File to the Tribunal Form of Award or Order Award or Order Award or Decision Order Order When does the ⅰ) After the After the ) After the After the Application for Decision, Application, Decision, arbitral an emergency If the If the Request for If the Arbitration tribunal is arbitrator or the Arbitration Arbitration was not Tribunal was not constituted Decision of the Tribunal was submitted within 10 constituted within 53 Schedule 1.10 of SIAC Arbitration Rules [2016]. 54 Article 6(5) of the ICDR International Rules [2014] only set forth that the emergency arbitrator shall have no further power to act after the arbitral tribunal is constituted. The ICDR needs to review and resolve this problem when it revises its rules in the future, and therefore eliminate any possible disputes. 55 Article 6(4) of ICDR International Rules of Arbitration [2014]; Article 3(1) of Appendix III of KCAB International Arbitration Rules [2016]; Schedule 1.10 of SIAC Arbitration Rules [2016]; Article 6(8) of Appendix V of ICC Rules of Arbitration [2017]. 56 Article 2(6) of Appendix V of ICC Rules of Arbitration [2017]. 57 Article 3(8) of Appendix III of KCAB International Arbitration Rules [2016]; Schedule 1.4 of SIAC Arbitration Rules [2010]; Article 6(5) of ICDR International Rules of Arbitration [2014]. 58 Article 6(7) of Appendix V of ICC Rules of Arbitration [2017]; Article 32(2) of KCAB International Arbitration Rules [2016]; Schedule 1.8 of SIAC Arbitration Rules [2016]; Article 6(6) of ICDR International Rules of Arbitration [2014]. 115
11. emergency not constituted days 90 days; or arbitrator lose within 90 days; ⅱ) when the effect? or Tribunal makes a ⅱ) if the final Award; or proceeding is ⅲ) if the claim is terminated withdrawn before the constitution of tribunal Language Not stipulated The language of the Not stipulated Not stipulated arbitration agreement Place of the Not stipulated Agreed Place of Agreed Place of Not stipulated Emergency Arbitration, but Arbitration, but Arbitrator President shall fix it Singapore shall be Proceedings if there is no the seat of agreement proceedings for emergency interim relief if there is no agreement Can an Forbidden Strictly forbidden Forbidden unless Forbidden Emergency unless otherwise agreed by unless Arbitrator act otherwise the parties otherwise as an arbitrator agreed by the agreed by the on the same parties parties merits? Is interim measure Yes Yes Yes Yes subject to security? Source: Authors have summarized and formed the table based on the Rules of the KCAB, ICC, SIAC and ICDR. III. Issues Regarding Introduction of the Emergency Arbitrator System 1. General Discussions As examined above, each arbitration institution employs various systems in order to meet the needs of the parties that wish to apply for urgent interim relief before the composition of the arbitral tribunal. Furthermore, it is evident that renowned international arbitration institutions tend to choose the emergency arbitrator system as a solution for this problem. The authors have found that the major international arbitration institutions such as the KCAB, AAA/ICDR, SIAC and ICC implemented and are now applying this system. 116
12. In the following section, the authors will focus on the six major issues, i.e. (1) composition of the arbitration rules and the method of application of the arbitration rules, (2) application for and costs of emergency arbitrator, (3) appointment and challenge of emergency arbitrator, (4) procedure, (5) decision, and lastly (6) other related issues which need to be reviewed. The authors will discuss them in detail, and thereby draw a conclusion regarding the implications for Vietnamese international arbitration institutions to employ the emergency arbitrator system. (1) Composition of the arbitration rules and the method of application The systems and methods that compose the rules related to emergency arbitrators can be divided into three main categories - 1) a method of forming a separate body of rules in the main text of the arbitration rules, like the ICDR Rules, or 2) add the simple rules regarding emergency arbitrators to provision on interim relief and regulate in detail in the appendix, like KCAB or SIAC, or 3) add a separate provision on emergency arbitrators in the rules, and regulate the details in the appendix, like the ICC Rules. It is the view of the authors that the method used by the ICC is most preferable so that the parties to arbitrations can more easily understand and comply with the process of the new system. All arbitration rules have implemented the ‘opt-out clause’ method that allows a party to automatically request the appointment of an emergency arbitrator unless the parties entered into a separate agreement to exclude interim relief granted by emergency arbitrators in the arbitration agreement. It is the author’s view that there is no reason for Vietnamese arbitration institutes when it will introduce the emergency arbitrator system to deviate from such practice. (2) Application for Emergency Arbitrators and its Costs 1) Period of Application In the case of ICC, a party is required to submit an application requesting an emergency arbitrator before the composition of the arbitral tribunal, and this is similar to the requirements of the KCAB, ICDR and SIAC.59 However, the ICC also differs distinctly from KCAB, ICDR and SIAC as it is possible to request an emergency arbitrator before the request for arbitration is submitted.60 Preventing a party from requesting an emergency arbitrator before the request for arbitration is submitted can diminish its effect when one takes into account the reason for the implementation of such a system. Also, when one considers the point that, in practice, parties often want the interim relief before the other party is notified about the request for arbitration, it is preferable to 59 Article 1(1) of Appendix III of KCAB International Arbitration Rules [2016]; Article 6(1) of ICDR International Arbitration Rules [2014]; Schedule 1.1 of SIAC Arbitration Rules [2016]. 60 Article 29(1) of ICC Rules of Arbitration [2017]. 117
13. allow a party to request urgent interim relief before the request for arbitration is submitted, like the ICC.61 2) Determination of acceptance or rejection of application Once the application for an emergency arbitrator is received by the arbitration institution, the institution is faced with a decision to accept or reject the application, and in the case of the ICC and SIAC, it is the president who makes the determination,62 while in the case of the ICDR and KCAB, they are silent on this matter, but one can presume that it should be the Administrator or the Secretariat. On a related note, a decision by the president of the institute seems to be preferable when expediency is a priority. However, a supplementary rule is also recommended for the designation of a deputy in the absence of the President who would decide on this matter like the ICC.63 3) Administrative costs and Arbitrator’s fee The ICC, KCAB and SIAC set administrative costs and an arbitrator’s fee at a rate that is unrelated to the sum in dispute.64 This is understood to be based on the nature of arbitration which requires arbitrators with a combination of sufficient practical experience and understanding of international arbitration, and the great amount of effort that is required in a very short period of time. SIAC is similar in that it requires a set administrative fee, but there is a dual structure- the fees charged for nationals and foreigners differ65 and arbitrator fees are consistent with the amount of request for arbitration. In the case of ICC, the costs are a little bit excessive and may pose an obstacle to the active application for emergency arbitrator proceedings. Accordingly, it is the view of the authors that it would be desirable to make the emergency arbitrator’s fees consistent with the amount of request for arbitration like the SIAC. 4) Deposit and refund If 50% of the deposit is paid, the ICDR initiates the emergency arbitrator proceedings. All other institutions require 100% to be paid.66 In the case of refunds, only the ICC states thereon67 and it would be preferable if the other arbitration institutions would specify regulations to remove future chances of dispute. 61 However, in order to reduce the likelihood of abusing the request for urgent interim relief and the danger of delaying proceedings, the rules should stipulate that the award shall lose effect if the request for arbitration is not submitted within a set period of time after the award is granted. 62 Article 1(5) of Appendix V of ICC Rules of Arbitration [2017]; Schedule 1.1 of SIAC Arbitration Rules [2016]. 63 Article 8(2) of Appendix V of ICC Rules of Arbitration [2017]. 64 Article 7 of Appendix V of ICC Rules of Arbitration [2012]; Article 3 of Appendix II, KCAB International Rules [2016]; SIAC Schedule of Fees [2016]. 65 SIAC Schedule of Fees [2016]. 66 There appears to be no reason for Vietnamese international arbitration institutions to regulate otherwise. 67 Article 7(5) of Appendix V of ICC Rules of Arbitration [2017]. 118
14. (3) Appointment of and Challenge to Emergency Arbitrators 1) Appointment of Emergency Arbitrators The appointment of emergency arbitrators is to be conducted within 2 days and 2 business days, respectively, from the date of Receipt of Application for the ICC and KCAB,68 within 1 business day from the date of Receipt of Application for both the ICDR69 and SIAC.70 In the authors’ opinion, 1 business day from the date of Receipt of Application seems appropriate. 2) Challenge to Emergency Arbitrators With regard to the challenge of arbitrators, ICDR requires the challenge be filed within 1 business day from the date the notice of the appointment is received,71 whereas the KCAB and the SIAC requires the challenge be filed within 2 business days and 2 days, respectively.72 For the ICC, the time limit is within 3 days from receipt by the party making the challenge of the notification of the appointment or from the date when that party was informed of the facts and circumstances on which the challenge is based if such date is subsequent to the receipt of such notification.73 Should this system be introduced, a short notice of 1 business day from the date of notice of the appointment is enough and preferable if this system is implemented. (4) Emergency Arbitrator Proceedings Considering that the decision, it is preferable that the timetable be established within 2 business days from the appointment of the emergency arbitrator, for expedient execution of the matter. In relation to the language of the arbitration and place of the emergency arbitrator proceedings, the ICC provides a clause,74 but the KCAB, ICDR and SIAC do not expressly stipulate either. To prevent procedural complications, explicit stipulation is preferable, as in the case of the ICC. (5) Decisions of Emergency Arbitrators 1) Time limit for rendering decision The ICDR does not stipulate a period for the emergency arbitrator, whereas the SIAC and the KCAB stipulate that a decision must be made within 14 days and 15 days, respectively, from the appointment of the emergency arbitrator.75 68 Article 2(1) of Appendix V of ICC Rules of Arbitration [2017]; Article 2(4) of Appendix III of KCAB International Arbitration Rules [2016]. 69 Article 6(2) of ICDR International Rules of Arbitration [2014]. 70 Schedule 1.3 of SIAC Arbitration Rules [2016]. 71 Article 6(2) of ICDR International Rules of Arbitration [2014]. 72 Article 2(6) of Appendix III of KCAB International Arbitration Rules [2016]; Schedule 1.5 of SIAC Arbitration Rules [2016]. 73 Article 3(1) of Appendix V of ICC Rules of Arbitration [2017]. 74 Appendix V, Article 1(3)(g) of ICC Rules of Arbitration [2017]. 75 Article 3(4) of Appendix III of KCAB International Arbitration Rules [2016]; Schedule 1.9 of SIAC Arbitration Rules [2016]. 119
15. The ICC limits the period to 15 days after transmission of the files to the arbitration tribunal.76 Expediency is crucial to this system, so it is advisable to set a time limit for rendering the decision, and the current practice of the ICC in this matter is preferred. 2) Form of Decision With regard to the form of the decision, SIAC, KCAB and ICDR all grant the emergency arbitrator the discretionary power to choose between an order or an award,77 but it is interesting to note that the ICC which adopted the emergency arbitrator system only recently stipulates that the decision made by the emergency arbitrator can only take the form of an order.78 In practice, both the order and award as decided by the emergency arbitrator are available as a choice, but in case of the Korean judicial system, the decision rendered by the emergency arbitrator in the form of an order may conflict with a precedent that states that the final ruling of the Korean Supreme Court is not in the form of a conflict and thus obviates the designation of who covers the litigation expenses.79 However, other notable factors include 1) an order requires simplicity and expediency, therefore, in principle, it is up to the court (or arbitral tribunal) to allow a plea of defense,80 2) as a matter of subject, orders are used for judging matters ancillary to the arbitration proceedings, and ones related to civil enforcement, provisional attachments, injunctions, and non-contentious cases,81 and, 3) in principle, orders are non-restrictive, and may be canceled.82 And lastly, unlike arbitration awards, it is not necessary to include the reasons in the decision.83 Considering these factors,84 the decision by the emergency arbitrator would most preferably be in the form of an order, in principle, as currently stipulated by the ICC.85 3) Termination of the Decision of Emergency Arbitrator In addition, under the ICC rules, if the request for arbitration is not received by the secretariat from the applicant within ten days of the secretariat’s receipt of the application, the emergency arbitrator proceeding should be terminated by the president.86 In contrast, the SIAC arbitration rules stipulates that if the arbitral tribunal is not composed within 90 days of the emergency decision, the decision made by the emergency arbitrator ceases to be binding.87 76 Article 6(4) of Appendix V of ICC Rules of Arbitration [2017]. 77 Schedule 1.8 of SIAC Arbitration Rules [2016]; Article 32(2) of KCAB International Arbitration Rules [2016]; Article 6(4) of ICDR International Rules of Arbitration [2014]. 78 Article 29(2), and Article 1(6) of Appendix V of ICC Rules of Arbitration [2017]. 79 Note Supreme Court of Korea Judgment dated July 9, 1985 Case No. 84ka55. 80 Note Article 134(1) of the Korean Civil Procedure Act. 81 The decision of dismissing suits and appeals of Article 144(4) of the Korean Civil Procedure Act are exceptional. 82 Note Articles 88(3), 141, and 222 of the Korean Civil Procedure Act. 83 Note Article 224(1) of the Korean Civil Procedure Act. 84 See Si-Yoon Lee, New Civil Procedure Act of Korea, 531-532 (5th ed. Pakyoungsa 2009). 85 See Keon-Hyung Ahn, A Study on the Current Status of Emergency Arbitrator System operated at the Major International Arbitration Institutions and Implications, Winter International Conference of the Institute for Legal Study at Dong-A University Law School, Busan, Korea, 17-18 (19 January 2012). 86 Article 1(6) of Appendix V of ICC Rules of Arbitration [2017]. 87 Schedule 1.10 of SIAC Arbitration Rules [2016] 120
16. As seen above, it has been suggested that a regulation should permit a party to submit an application for an emergency arbitrator before the request for arbitration is submitted. The cases of ICC and SIAC should be examined in order to find the best condition regarding this issue. In conclusion, it appears preferable that the application for emergency arbitrator and the decision by emergency arbitrator be identified separately and regulated as such. 4) Involvement of emergency arbitrator in arbitral tribunal for the merits ICC fully prohibits engagement of an emergency arbitrator in an arbitral tribunal for the merits, and other Rules prohibit engagement unless otherwise agreed upon by the parties involved.88 In practice, it is understandable that the defeated party of the emergency relief, may be negatively biased against the arbitrator, and the arbitrator’s involvement be prohibited, but depending on the issue, the emergency arbitrator’s involvement in the arbitral tribunal may positively aid the expediency and effectiveness of the process, and their involvement is preferred with prior agreement between the parties involved. IV. Conclusions Corporations around the world have long since entered the age of unlimited competition across blurred borders as the globalization of world economy gained pace. The worldwide arbitration community is no exception to this global competitive system, as competition between international arbitral institutions to attract cases arising from international commerce is now inevitable. As a result, arbitral institutions seek to improve their own arbitration rules leveraging their experiences and know-how, not unlike the manner in which business corporations produce differentiated products and services. This signifies a critical necessity for the arbitral institutions to satisfy the needs of the parties involved and furthermore secure and maintain reliable arbitration rules for future sustainability. The author focused on the emergency arbitrator system as it is a result of the efforts by worldwide arbitration institutions to satisfy the needs of the parties involved in arbitration. The emergency arbitrator system provides urgent provisions subsequent to the request for arbitration and prior to the establishment of an arbitral tribunal. At a working level, the system provides a problem-solving approach attainable only within the courtroom. Justification and value of such an emergency arbitrator system may be found in the cases of major leading international arbitration institutions such as the ICC, AAA/ICDR, KCAB and SIAC which have already taken steps in this system. However, the most well-known international arbitration body in Vietnam, Vietnamese International Arbitration Center (VIAC), does not seem to introduce the emergency arbitrator system. The VIAC arbitration rules only stipulates on power of the 88 Article 2(6) of Appendix V of ICC Rules of Arbitration [2017]. 121
17. arbitral tribunal to order interim measures,89 but the author could not find any relevant provision dealing with the emergency arbitrator in the said rules. To sum up, the emergency arbitrator system is a trend that is hard to counter in arbitral institutions worldwide, and appears to be a trend better adopted as soon as possible. For arbitral institutions, the pragmatic aspect of introducing the emergency arbitrator system not only means effectuating the convenience of relevant parties, but also sending a positive message to the customers of the arbitral institutions’ readiness to answer the needs of the clients. Furthermore, the introduction of such an emergency arbitrator system opens possibilities of creative inspiration in future case management, including the procedure for the composition of the arbitral tribunal, time control, and cost reduction. It is in our best intentions and hopes that our close perusal of the current status of the emergency provision systems of international commercial arbitration institutions and major issues surrounding the system of 4 major institutions will aid any such arbitration institution looking to introduce it to their system. REFERENCES Ahn, KH., “A Study on the Current Status of Emergency Arbitrator System operated at the Major International Arbitration Institutions and Implications,” Winter International Conference of the Institute for Legal Study at Dong-A University Law School, Busan, Korea (19 January 2012). Ahn, KH., Kim, SR., “A Study on Emergency Arbitrator System of SCC and Requirements for Granting of Interim Measures,” Journal of Arbitration Studies vol.21 No.2 [The Korean Association of Arbitration Studies (KAAS), August 2011]. Ahn, KH., Lee, M., & Oh, WS., “A Study on the Emergency Arbitrator System of AAA/ICDR,” Korea International Commerce Review vol.26 No.3 (Korean Academy of International Commerce, Inc., June 2011). Bend, V., Leijten & Ynzonides (Editors), A Guide to the NAI Arbitration Rules (Aspen Publishing, 2009). Blackaby, N., Partasisdes, C., Redfern, A., & Hunter, M., Redfern and Hunter on International Arbitration, 5th Edition (Oxford University Press, 2009). Boog, C., “Swiss Rules of International Arbitration - Time to Introduce an Emergency Arbitrator Procedure?,” 28 ASA Bulletin (Kluwer Law International, 2010). Hausmaninger, C., “The ICC Rules for a Pre-Arbitral Referee Procedure: A Step Towards Solving the Problem of Provisional Relief in International Commercial Arbitration?,” ICSID Rev. (1992). Hosking, J., Valentine, E., & Lindsey, D., “Emergency Measures of Protection: Creeping Consensus or a Passing Fancy?” 2011 Spring Meeting - ABA Section of International Law “Changing the Rules,” April 5~9, 2011. 89 Articles 21(1) to 21(4) of VIAC Rules of Arbitration [in force as from 1 March 2017]. 122
18. Kaminskiene, N., “Application of Interim Measures in International Arbitration: The Lithuanian Approach,” Jurisprudencija/Jurisprudence (MykoloRomerio University, 2010). Leach, J., Berenholtz, J., “The Expected an Emergency Arbitrator Procedures Under The SIAC Rules - Six Months On, How Have They Fared?”, available at content&view=article&id=248:expedited-emergency & catid =56:articles&Itemid. Lee, SY., New Civil Procedure Act of Korea, 5th Edition (Pakyoungsa 2009). Lemenez, G., Quigley, Quigley, “The ICDR’s Emergency Arbitrator Procedure in Action, Part 1: A Look at the Empirical Data,” Dispute Resolution Journal (August/October 2008). Lundstedt, J., “SCC Practice: Emergency Arbitrator Decision rendered 2010,” available at Mok, YJ., Commercial Arbitration Law (Pakyoungsa, 2011). http:// www.sccinstitute.com 123