In the process of commercial dispute settlement under arbitration proceedings, applying provisional emergency measures plays a critical role in protecting the legal rights and interests of the parties before the Arbitral Tribunal issues its final award. These measures not only aim to prevent irreparable harm but also contribute to ensuring the effectiveness of enforcing the eventual award. However, requesting and applying provisional emergency measures require strict compliance with applicable laws and the arbitration rules agreed upon by the parties. In this article, TNTP provides a detailed analysis of the procedures for applying provisional emergency measures before the Arbitral Tribunal to help parties effectively exercise their rights.
1. Step 1: The person requesting the application of temporary emergency measures shall submit the request, documents, and accompanying evidence to the Arbitral Tribunal.
a) A person with the right to request
Under the provisions of Article 48 of the 2010 Law on Commercial Arbitration, disputing parties are entitled to request provisional emergency measures in arbitration proceedings.
b) Time of request
The 2010 Law on Commercial Arbitration does not specify the timing at which a party may request the Arbitral Tribunal to apply provisional emergency measures. However, under typical arbitration procedures, such a request can only be made once the Arbitral Tribunal has been constituted.
The SIAC Arbitration Rules similarly stipulate that the request can be made after the constitution of the Arbitral Tribunal. The claimant submits a statement of claim to the respondent and the Arbitral Tribunal, specifying the requested provisional emergency measures and the value of all claims that can be quantified. Alternatively, the respondent may submit a statement of defense to the claimant and the Arbitral Tribunal, detailing the requested measures.
c) Submit the request and supporting evidence
The request for provisional emergency measures serves as the basis for the Arbitral Tribunal to address the matter. The content of the request is specifically regulated under Clause 2, Article 50 of the 2010 Law on Commercial Arbitration. The request must be accompanied by documents and evidence proving the necessity of applying such measures.
2. Step 2: The Arbitral Tribunal receives and considers the request for temporary emergency measures
The review and resolutiosn of the request for provisional emergency measures by the Arbitral Tribunal are governed by Clauses 2, 3, and 4 of Article 50 of the 2010 Law on Commercial Arbitration. After considering the request, if the Arbitral Tribunal finds the application of provisional emergency measures to be unfounded or unnecessary, it will reject the request. The Arbitral Tribunal must notify the requesting party in writing, providing reasons for the rejection.
If the Arbitral Tribunal deems the request to be substantiated, it will accept the request. The Arbitral Tribunal will then assess the financial security requirement of the requesting party, as stipulated under Article 49 of the 2010 Law on Commercial Arbitration.
3. Step 3: Forcing the person requesting the application of temporary emergency measures to fulfill the financial security obligation
At the request of the Arbitral Tribunal, the party requesting the adoption of emergency interim measures is required to fulfill financial security obligations. The secured assets are typically money, valuable papers, precious metals, or gemstones, as determined by the Arbitral Tribunal. The value of the secured assets is generally sufficient to compensate for potential damages arising from the improper implementation of the emergency interim measures. This security deposit is held in a frozen account at a bank designated by the Arbitral Tribunal.
Thus, in principle, if the requesting party does not possess assets to provide as security, their request for the application of emergency interim measures will not be accepted by the Arbitral Tribunal.
4. Step 4: Decision to apply or reject provisional emergency measures
After reviewing the request for provisional emergency measures and the supporting evidence, and once the requesting party fulfills the financial security requirement within three (03) days, the Arbitral Tribunal will issue a decision to apply the measures.
The above is the article “Procedures for Applying Provisional Emergency Measures by the Arbitral Tribunal” provided by TNTP for Readers.
Best regards,
