09.08.2017
[Cologne, ] Article 29 of the International Chamber of Commerce (ICC) Arbitration Rules, as introduced in 2012, grants a party “that needs urgent interim or conservatory measures that cannot await the constitution of an arbitral tribunal (“emergency measures”)” the right to file a respective application with the Secretariat of the ICC. Unless the parties explicitly opt out of the Emergency Arbitrator Provisions in their arbitration clause, such Emergency Arbitration applies automatically. Furthermore, the Emergency Arbitrator must render his order no later than 15 days from the date on which the file was transmitted to him.
There have only been a few emergency arbitration proceedings since Article 29 of the ICC Arbitration Rules was introduced, however, one may expect more proceedings in the future. With regard to the result, applicants have been unsuccessful in more than one half of the cases reported. This was also the case here:
A team of arbitration specialists from GÖRG and Wolf Theiss has, in cooperation with the in-house team of the Respondent, successfully defended the application of a supplier of various components for photovoltaic installations for a total of four solar parks in Romania. With its application, the Applicant has tried, after having been unsuccessful before German state courts, to avoid the drawing of guarantees on first demand by four special purpose vehicles, all of which are part of the Romanian Tinmar Group of Companies. The Tinmar Group of Companies is one of the largest private Romanian utility companies, divided into the energy, oil and gas sectors including renewables such as solar power, and the Tinmar Group of Companies runs the four solar parks in question in Romania. The drawing of the guarantees became necessary, because - in the opinion of the Respondent - defects with regard to the components delivered continued to exist.
The Emergency Arbitrator appointed by the President of the International Court of Arbitration of the ICC rendered an Order on July 28, 2017 - exactly 15 days after being appointed - with extensive and detailed reasons for his decision, rejecting all claims raised by the Applicant. In his decision, the Emergency Arbitrator generally confirmed the existence of a case in which “urgent interim or conservatory measures … cannot await the constitution of an arbitral tribunal” within the meaning of Article 29 Para. 1 of the ICC Arbitration Rules. In the opinion of the Emergency Arbitrator it is difficult to determine the standard to be applicable in each case, since the ICC Arbitration Rules do not provide any guidance except for the existence of the requirement of “urgency”. Upon an extensive analysis of the (few) orders rendered by arbitral tribunals on Emergency Arbitration as well as the fundamental treatise of Gary Born (International Commercial Arbitration, 2nd edition 2014) the Emergency Arbitrator held that two prerequisites should be determined: (i) a prima facie case for the measure requested in the main proceedings (as a more objective criterion) and, (ii) urgency (as a more subjective criterion).
In the present case the Applicant had, in the opinion of the Emergency Arbitrator, failed to establish a prima facie case for a high probability to be successful in the main proceedings (specifically: that no relevant defects existed). Therefore, the (somehow interesting and disputed) question of “urgency” was no longer required to be examined.
Thereby, the principle „pay first, litigate afterwards” - as cited twice in the Order of the Emergency Arbitrator - which makes the guarantee on first demand such a successful instrument in international business, has prevailed. This complies in every respect with the excellent article authored by Stefan Kröll („Der Eilschiedsrichter als Mittel, um die missbräuchliche Inanspruchnahme von Bankgarantien zu verhindern“, in: ZBB 2016, 271). It remains to be seen whether the guarantors, two renowned insurance companies, will comply with this principle and accept the Order rendered by the Emergency Arbitrator.
GÖRG regularly represents clients in trans-border litigation and arbitration proceedings. Dr. Christof Siefarth and Dr. Sebastian Feiler frequently advise enterprises in international litigation and arbitration proceedings, particularly pursuant to the ICC Arbitration Rules.
Advisors Tinmar Group of Companies
GÖRG Partnerschaft von Rechtsanwälten mbB
Dr. Christof Siefarth, LL.M., Partner, Dispute Resolution, Construction and Engineering
Katharina Reiners, LL.M., Associate, Energy
Dr. Sebastian Feiler, Associate, Dispute Resolution, Construction and Engineering
Wolf Theiss, Bukarest, Romania
Ciprian Glodeanu, Partner
Sorin Dumitru, Associate
Tinmar Group of Companies, Bukarest, Romania
Adrian Pavelescu, Head of Corporate Development
