The settlement of commercial disputes through international arbitration has become increasingly prevalent in recent years. Several arbitration institutions have now introduced rules to assist parties seeking urgent relief before an arbitral tribunal is formed. These pre-tribunal measures, known as Emergency Arbitration, aim to meet the challenges at hand and offer practical benefits to both parties.
In this article, Nishant Choudhary (Partner) and Rohan Bishayee (Legal Adviser) from DFDL examine the emergency arbitration landscape in three countries, Cambodia, Thailand, and Myanmar, and provide an overview of the legal framework, practical challenges, and the road ahead. The UNCITRAL Model Law on International Commercial Arbitration (1985), with amendments as adopted in 2006 (“Model Law”) is considered the base law for this article.
The National Centre for Commercial Arbitration (“NCAC”) amended the NCAC Arbitration Rules on 28 June 2021 (“NCAC Rules”). The latest iteration of the NCAC Rules defines an “emergency arbitrator” as an arbitrator appointed in accordance with the NCAC Rules (Acceptance of the Appointment and Proceedings Committee) (Art. 12 NCAC Rules).
Under the NCAC Rules, before the constitution of the arbitration tribunal, any party may appoint an emergency arbitrator (within three calendar days from the application) and apply for an interim measure from an emergency arbitrator. Within two calendar days of the appointment, the emergency arbitrator shall establish a schedule for consideration of the application for an interim measure. The emergency arbitrator’s decision on the application needs to be made within 15 calendar days (Art. 18 NCAC Rules) from the appointment date, which can only be extended in exceptional circumstances.
The NCAC recently announced the first-ever interim award issued by an emergency arbitrator. While the emergency arbitrator has issued the interim award, the enforceability of the interim award remains a question mark because Cambodia has not yet adopted the 2006 amendments to the Model Law. In the absence of a regulated enforcement process, while interim awards may be passed, the parties may not be able to enjoy the benefits because the enforcement of the interim award would not follow the same urgency as the emergency arbitration process.
The Thailand Arbitration Act 2002 (“TAA”), is the primary legislation for arbitration in Thailand and does not contain provisions for the appointment of an emergency arbitrator.
Section 16 TAA only provides that a party to an arbitration agreement may file a motion requesting the “competent court” to issue an order imposing interim measures to protect its interests, before or during the arbitral proceedings. It fails to stipulate whether an arbitral tribunal can do the same. However, Article 39 of the Thailand Arbitration Institute Rules (“TAI Rules”) states that the arbitral tribunal may grant interim measures for the protection of a party as it deems appropriate. However, there are no provisions that state that an emergency arbitrator may be appointed before the constitution of the tribunal to pass an interim award. Further, while the TAI Rules allow arbitral tribunals to pass an interim order, based on industry knowledge, we have never seen interim orders being passed by arbitrators. Also, the Thailand Arbitration Center (“THAC”)’s institutional rules contain no provisions related to interim measures and/or the appointment of an emergency arbitrator. For the arbitration landscape in Thailand to provide these benefits to parties in dispute, Section 16 of the TAA and Article 39 of the TAI Rules would need amendment to incorporate emergency arbitration provisions.
Myanmar’s arbitration landscape is still at a very nascent stage. Myanmar formally acceded to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (“New York Convention”) on 15 July 2013, and on 5 January 2016, Myanmar enacted the Myanmar Arbitration Law (“Arbitration Law”). The Arbitration Procedures were enforced on 31 July 2018.
The Arbitration Law grants power to the Myanmar courts to intervene in arbitration procedures in both domestic and international arbitration proceedings. Like Thailand, the Arbitration Law and the Arbitration Procedures only permit a court to pass interim awards before the constitution of an arbitral tribunal. The arbitral tribunal has the power to pass interim awards only during the arbitration proceeding. Similar to Thailand, the Arbitration Law and Arbitration Procedures would benefit from clear rules on appointing an emergency arbitrator before the constitution of the arbitral tribunal to decide on matters of urgency.
While Cambodia has enforced provisions for “emergency arbitrators” and recently passed the first award by an “emergency arbitrator,” question marks remain on the actual enforcement in a Cambodian court. Thailand and Myanmar, on the other hand, do not contain provisions for “emergency arbitration” or passing of interim awards before the appointment of an arbitral tribunal (save for interim relief passed by civil courts). Cambodian legislation would therefore benefit from adopting the Model Law as amended in 2006 (including interim awards enforcement) to have a fully functioning system for emergency arbitration. Thailand and Myanmar would benefit from legislative amendments to incorporate provisions on “emergency arbitration” and thereafter a systematic enforcement procedure following the Model Law.
For further information, please contact:
Nishant Choudhary, Partner, Linklaters