Emergency arbitration at the SCC – a decade in review
The conclusion of 2019 marks 10 years with Emergency Arbitration at the SCC. By some seen as a controversial innovation at the outset, emergency arbitration has since become a standard element of international arbitration.
In the period 2010 to 2019, the SCC received 42 applications for emergency arbitration with the highest number in one year being 2016, when 13 applications were filed. The many applications demonstrate that the tool caters to a clear need in the arbitral process.
In just over 50 % of the cases the request for interim measures were denied, in 43 % of the cases the requests were granted and in 5 % of the cases the requests were withdrawn prior to a decision being made. 2019 marked the year with the highest share of granted requests, with six out of eight applications being granted, and only one denied. The last application was withdrawn.
Since the introduction of the emergency arbitration option, the SCC has also experienced that parties use the tool to further settlement negotiations.
The emergency arbitration cases involve a variety of underlying contracts. Just under one quarter (24 %) relates to investment treaty protection, followed by delivery agreements (19 %), service agreement (17%) and shareholders agreements (14 %).
To read more about the different Emergency Arbitration cases, please see our practice notes:
A practice note on the decisions rendered in 2017-2019 will be published shortly.
Background on Emergency Arbitrator under the SCC Rules
The Emergency Arbitrator mechanism aims to enable parties to seek interim measures before the case has been referred to the arbitral tribunal. It has formed part of the Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce (SCC Rules) since 1 January 2010.
The provisions on appointment of an Emergency Arbitrator under the SCC Rules enable a request for an interim measure prior to and after commencement of arbitration, but before the case has been referred to the arbitral tribunal. The SCC must notify the Respondent as soon as the application has been received, and the Board of the SCC will seek to appoint an Emergency Arbitrator within 24 hours of receiving the application. The SCC Emergency Arbitrator procedure calls for notice to be given to the responding party. It is not available on an ex parte basis. The rules apply to all SCC arbitrations unless the parties expressly agree otherwise but do not prevent a party from requesting the courts to grant interim measures.
The Emergency Arbitrator should give each party an equal and reasonable opportunity to present its case, taking into account the urgency inherent in such proceedings. An emergency decision on interim measures should be made not later than five days from the date when the application was referred to the Emergency Arbitrator. The Board may extend the five-day time limit upon a reasoned request by the Emergency Arbitrator, or if otherwise deemed necessary. The emergency decision is binding on the parties when rendered and may be amended or revoked by the Emergency Arbitrator upon a reasoned request by a party.
The powers of the Emergency Arbitrator terminate when the case has been referred to an arbitral tribunal. The emergency decision ceases to be binding if arbitration is not commenced within 30 days from the date of the emergency decision, or if the case is not referred to an arbitral tribunal within 90 days. The arbitral tribunal is not bound by the decision of the Emergency Arbitrator. Further, the Emergency Arbitrator may not act as an arbitrator in any future arbitration relating to the same dispute, unless otherwise agreed by the parties.