By: Lisa Romeo, Assistant Vice President, AAA® Commercial Division
Emergency or expedited measures of protection provide a framework for a party to an arbitration to request immediate though short-term relief before the full arbitrator-appointment process is completed. Emergency relief most commonly is petitioned for upon the filing of the arbitration demand and may be compared to motions for injunctive relief or a temporary restraining order in court.
Many parties require the means to obtain prompt interim relief once a dispute arises either to preserve the status quo or to prevent the other side from continuing the alleged breach in question pending final resolution of the dispute.
Parties to an arbitration have several options to address the need for expedited relief.
Courts in most jurisdictions retain authority to grant interim measures in support of arbitration. Obviously, some of the benefits of arbitration–such as confidentiality and efficiency–may be lost if a party is forced to pursue provisional relief in open court. Some parties therefore prefer to seek interim measures within the arbitral process.
Examples of requests for emergency measures include a request to1:
- Enforce a confidentiality order in a settlement between the parties after one party threatened court action that would have resulted in a filing divulging the terms of the settlement.
- Order the respondent to produce the source code for software that was not performing as designed, where respondent had ceased to service the software.
- Keep a cargo container situated in place; the moving party alleged it was their bought-and–paid-for property, while the other party was trying to transport it out of state because they were fighting the venue/locale request.
- Prohibit respondent from entering a cannabis grow-facility and removing any cannabis plants from the facility as well as requiring respondent to return plants taken without permission.
- Enjoin respondents in a franchise case from:
- diverting business from current franchise to future business;
- joining/owning/operating/engaging in a competitive business;
- interfering with current business relationships of Claimants; and
- copying “confidential Information” belonging to Claimants and using that information in future or current competitive business.
Different arbitral organizations have different forms of emergency procedures, which include, among others, expediting the tribunal selection or the appointment of an emergency arbitrator (EA).
The rest of this article will concentrate on the latter, as exemplified by the AAA-ICDR®, to illustrate how parties can benefit from this option and what to consider in the rules they select. For example, the procedures do not apply under all AAA Rules. The appointment of an EA called for under the Emergency Measures of Protection is formally part of the Commercial Arbitration Rules, the Construction Industry Arbitration Rules, and the International Dispute Resolution Procedures. Under the Employment Arbitration Rules, emergency measures are optional and must be referenced separately in the parties’ contract or agreed to after the dispute has arisen. The Consumer Arbitration Rules do not provide for emergency measures nor do rules for expedited or fast-track cases.
The emergency procedures
- Provide that within one business day of notice of the request, the case manager must directly appoint an EA.
- Provide that within two days of appointment, the EA must establish a schedule for the resolution of the motion.
- Set the standard the arbitrator must consider to grant the request.
Additionally, the emergency arbitrator has the authority to allocate the costs of the motion among the parties or defer that decision to the merits arbitrator(s).
An application to amend or reconsider the interim decision may be made to the EA only if any circumstances that led to the decision have changed. Once the case arbitrator or panel is appointed for the balance of the case, any party may submit that request to them.
Once the decision is rendered, the emergency arbitrator is essentially functus oficio (of no further official authority) and, other than under the circumstances noted above, has no authority to modify the decision. The emergency arbitrator is not eligible to serve as the arbitrator on the balance of the case unless both parties agreed.
The process of securing emergency relief has become an important tool in the arbitration process and one that parties should consider in appropriate circumstances.
1 These actual emergency requests were filed with the American Arbitration Association® over the last year or two.
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