Global Development

Introduction

The Court of International Commercial Arbitration attached to the Chamber of Commerce and Industry of Romania (the ‘CICA’) adopted new rules which entered into force on 1 January 2018 (the ‘2018 CICA Rules’).¹ For the first time in Romania, these rules provide for the possibility to refer a request for provisional measure to an emergency arbitrator (‘EA’) before the constitution of the arbitral tribunal. Article 40(3) of the 2018 CICA Rules on Interim and Conservatory Measures provides:

Requests for interim or conservatory measures filed before the initiation of the arbitration or before the case file was referred to the arbitral tribunal shall be decided by an emergency arbitrator, in accordance with the procedure set forth in Annex II.²

As always when contemplating the appointment of an EA, one must review the national courts’ rulings with respect to EA decisions³ since, in many jurisdictions, the latter are either denied recognition or annulled on different grounds.⁴ Two years after the 2018 CICA Rules entered into force, there is no available data concerning the frequency with which the EA procedure of the Bucharest-based institution is used by the parties. However, and according to various sources, parties do refer requests for interim measures to EA, while it appears that the first request for the appointment of an EA under Article 40(3) was made in March 2018, three months after the entry into force of the 2018 CICA Rules. It is worth mentioning, however, two interesting rulings of the Bucharest Court of Appeals:

• Decision 47 of 7 June 2018 (‘Decision 47/2018’);⁵ and
• Decision 76 of 25 July 2019 (‘Decision 76/2019’).⁶

1. Decision 47/2018

This is allegedly the first arbitral procedure conducted on the basis of the 2018 CICA Rules in which the Claimant requested the appointment of an EA. Claimant was a thermal energy producer and Respondent a leasing company which underwent insolvency. Claimant requested the suspension of the payments to be made on the basis of the leasing contract between the parties until the decision on the merits was rendered, since its claims involved the nullity of certain clauses of the said contract, the absence of a right to receive payment as well as the transfer of the property rights of the goods.

The EA admitted Claimant’s request and declared the payments should be suspended until the award on the merits was rendered. Respondent initiated an annulment procedure against the EA’s order before the Court of Appeal of Bucharest. Although Respondent invoked a number of arguments to sustain its request for annulment, the Court of Appeal annulled the EA’s order on the basis of one argument, namely the manner in which the emergency arbitral tribunal had been constituted. The Court of Appeal motivated its decision by stating that an arbitral tribunal should have been constituted of three arbitrators, appointed according to the appointment rules set out in Article 19 of the 2018 CICA Rules, applying to ordinary proceedings, since the arbitral agreement referred to a tribunal composed of three arbitrators.

This interpretation by the Court of Appeal renders inapplicable the institution of the EA in Romania each time the arbitration clause refers to a tribunal constituted of three arbitrators, in the absence of a specific reference to the parties’ agreement to have a single arbitrator in case of emergency arbitration procedure.

While reading the findings of the Court in Decision 47/2018, the 2015 decision of the Singapore High Court stands as a fitting example of a progressive interpretation in a similar case. In a decision rendered in 2015, the Singapore High Court dismissed an application to set aside an arbitral award rendered under the SIAC's expedited procedure rules, where the award was rendered by a sole arbitrator even though the parties' agreement expressly provided that disputes were to be resolved by a panel of three arbitrators.⁷ The Court held that ‘express consent‘ of the parties was not necessary for the expedited procedure provisions to override the parties' agreement as to the constitution of the tribunal and considered that the terms of the arbitration could be overridden by the rules of arbitral institutions which were incorporated by reference. While awaiting a similarly progressive decision, parties to an arbitration seated in Romania and opting for a three-arbitrators tribunal may consider expressly providing in their arbitration clause that, in the case of an emergency procedure, they agree to have their requests submitted and decided by a single EA.

2. Decision 76/2019

In this case, Claimant filed a request for provisional measures with an EA appointed under the 2018 CICA Rules, requesting the provisional suspension of the effects of Respondent’s contract termination notification. Respondent did not question the applicability of the EA rules, nor the competence of the EA to decide on the provisional measures request.

The EA issued an order in favor of Claimant, granting the provisional measures. Respondent subsequently filed a request for annulment of the EA’s order with the Bucharest Court of Appeals, claiming that the EA’s order violated imperative legal provisions and that the only competent forum to hear Claimant’s request for provisional measures – prior to the constitution of the arbitral tribunal – were the national courts.

Here too, the Bucharest Court of Appeals annulled the EA’s order. The Court motivated its decision by reference to Article 585 of the Romanian Code of Civil Procedure which establishes the competence to hear requests for provisional measures or interim relief:

• Under paragraph 1, the competent jurisdiction to hear such requests before or during the arbitration procedure is the national tribunal of the seat of the arbitration.
• Paragraph 4 further provides that, during the arbitration procedure, such requests may also be heard by the arbitral tribunal.

The Romanian judge recognized the freedom of the parties to establish the rules according to which their arbitration procedure would be conducted while emphasizing that such rules may not violate imperative legal provisions or public policy.

The Court therefore found that Article 40(3) and Annex II of the 2018 CICA Rules violate the imperative provisions of Article 585 of the Romanian Code of Civil Procedure, which allegedly grant national courts exclusive jurisdiction to hear requests for provisional measures and interim relief prior to the commencement of an arbitration. The Court concluded that, if the Romanian legislator intended to allow requests for interim measures introduced before the constitution of the arbitral tribunal to be decided upon by an arbitrator, it would have expressly provided so. Therefore, the Court admitted the request for annulment and annulled the EA’s order.

Decision 76/2019 seems to indicate that the institution of the EA may not co-exist with the current rules of Romanian civil procedure, since the Court found that Article 40(3) and Annex II of the 2018 CICA Rules violate such imperative rules. As underlined by Olaru and Badea,⁸ a number of findings in Decision 76/2019 are questionable, inter alia the imperative character given by the Court to Article 585 of the Romanian Code of Civil Procedure and the interpretation of its paragraph 4 and the reference to an ongoing arbitration procedure. By ruling that the EA was not competent to decide upon an interim measure request, the Court considered that an arbitration procedure is ongoing only if the arbitral tribunal has been constituted. The ruling therefore:

• excludes the prior appointment of an EA as the start of an arbitral procedure; and
• establishes that an EA is not an arbitrator within the meaning of Article 543 of the Romanian Code of Civil Procedure.⁹

Conclusion

Decisions 47/2018 and 76/2019 of the Bucharest Court of Appeals illustrate two of the most common challenges parties encounter when having recourse to an EA, i.e. the validity of the EA’s appointment and the EA’s competence to decide upon requests for provisional measures or interim relief. The annulment of the EA orders by the Romanian Courts also demonstrates the importance of selecting a seat of arbitration which promotes arbitration and where national courts are willing to take progressive decisions.

The findings of Decisions 47/2018 and 76/2019 cannot be overcome by a mere reference in the arbitration agreement. At the same time, such a conservative interpretation of Article 585 of the Romanian Code of Civil Procedure, which tends to obstruct the recourse to an EA in arbitral procedures seated in Romania, renders the enforcement of any EA order took under the 2018 CICA Rules uncertain. Romania is not the only jurisdiction to have taken such a stand.¹⁰ Interestingly, France – a notoriously pro-arbitration jurisdiction – remained silent on the subject of provisional measures until 2011, although national courts held that arbitrators in French seated international arbitrations were empowered to grant provisional relief.¹¹ In 2011, a reform of the French Code of Civil Procedure introduced the power of arbitral tribunals to take provisional measures,¹² without expressly referring to the EA thus creating uncertainty as to the enforcement of the EA orders in France.

Nevertheless, the practice of major international arbitral institutions that have adopted EA procedural rules in the last decade (SCC, ICC, SIAC, LCIA, CIETAC, HKIAC and ICDR) shows that EA procedures are efficient and that most EA decisions are voluntarily complied with.¹³

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