First Emergency Arbitration Procedure in China

The Beijing Arbitration Commission (BAC) recently administered the first emergency arbitration proceeding in mainland China. Wei Sun was the emergency arbitrator who heard the application and he has since published a discussion of the matter online. Although the decision has not been made public, the case was also discussed online by the applicants’ counsel who referred to it as the “GKML case”.

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The HKIAC has recently published its case statistics for 2017, showing a continued healthy demand for its services. The HKIAC saw a 15.7% increase in its caseload compared to 2016, with the total amount in dispute in HKIAC arbitrations doubling since last year. The statistics demonstrate that HKIAC maintains its position as one of the world’s leading arbitral institutions, serving parties throughout Asia and beyond. Continue reading

New HSF Global Construction & Infrastructure Disputes publication is launched

We are delighted to share with you the inaugural issue of the new publication from the Herbert Smith Freehills Global Construction and Infrastructure Disputes Practice. Inside Construction and Infra showcases the expertise of our leading construction and infrastructure disputes lawyers, giving our clients the benefit of their experience drawn from cases taking place around the world. The publication offers fresh perspectives on this rapidly changing industry, identifying current market trends and providing personal insights from our practitioners across the globe. Click here to access issue #1 of Inside Construction and Infra.

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English High Court has no power to grant urgent relief under Arbitration Act where urgent relief could be granted by expedited tribunal or emergency arbitrator under LCIA Rules

In the recent case of Gerald Metals SA v Timis [2016] EWHC 2327 (Ch), the English High Court considered its power to grant urgent relief under s 44(3) of the Arbitration Act 1996 ("Act") in circumstances where timely and effective relief could have instead been granted by an expedited tribunal or emergency arbitrator under the LCIA Arbitration Rules 2014 ("LCIA Rules").

Under s 44(3) of the Act, the English court may, in cases of urgency, make in support of arbitration proceedings such orders as it thinks necessary to preserve evidence or assets (e.g. freezing injunctions). However, s 44(5) provides that the court may only act to the extent that the arbitral tribunal (or other person or body vested with power in that regard) has no power or is unable for the time being to act.

In Gerald Metals, the Court held that where there is sufficient time for an applicant to obtain relief from an expedited tribunal or emergency arbitrator under the Rules, it does not have power to grant urgent relief. As a consequence, the Court did not have power to grant the freezing injunction requested by the applicant because the applicant's request for an emergency arbitrator under the LCIA Rules had already been considered and dismissed by the LCIA.

The decision is significant because it suggests that the availability of timely and effective relief under the LCIA Rules and other institutional rules (such as emergency arbitrators) may in certain circumstances erode the court's power to grant urgent relief in support of the arbitral proceedings.


The case concerned a claim by Gerald Metals SA ("Gerald Metals"), a commodities trader, in respect of a financing arrangement entered with Timis Mining Corp (SL) Limited ("Timis Mining").

Under the arrangement, Gerald Metals would advance $50 million to Timis Mining to finance the development of an iron ore mine in Sierra Leone. Timis Mining would then sell iron ore extracted from the mine to Gerald Metals in monthly shipments pursuant to an offtake agreement. The sum advanced by Gerald Mining would be repaid, with interest, in monthly installments deducted from the price of the iron ore shipments.

Timis Mining was controlled by Mr Timis, whose business interests were held by a trust called the Timis Trust ("Trust"). The Trust's assets were said to have been worth in excess of $2 billion. In order to secure Timis Mining's performance, the trustee of the Timis Trust, Safeguard Management Corp ("Safeguard"), provided a guarantee of all sums due to Gerald Mining under the offtake agreement up to a maximum of $75 million. The guarantee was subject to arbitration in London under the LCIA Rules.

Following defaults under the offtake agreement, Gerald Metals commenced arbitral proceedings under the LCIA Rules against Safeguard under the guarantee.

Before the constitution of the tribunal, Gerald Metals applied to the LCIA for the appointment of an emergency arbitrator, with a view to seeking emergency relief, including an order to prevent Safeguard from disposing of the Trust's assets. Safeguard responded to the application by giving undertakings not to dispose of any assets other than for full market value and at arm's length, and to give 7 days' notice to Gerald Metals before disposing of any asset considered to be worth more than £250,000. In light of those undertakings, the LCIA rejected Gerald Metals' application for the appointment of an emergency arbitrator.

Gerald Metals applied to the English High Court for urgent relief against Safeguard, including a freezing injunction to prevent the disposal of the Trust's assets.


Mr Justice Leggatt began by considering its power to grant urgent relief under the Act. Section 44(3) provides:

If the case is one of urgency, the court may, on the application of a party or proposed party to the arbitral proceedings, make such orders as it thinks necessary for the purpose of preserving evidence or assets.

This power, however, is subject to s 44(5):

In any case the court shall act only if or to the extent that the arbitral tribunal, and any arbitral or other institution or person vested by the parties with power in that regard, has no power or is unable for the time being to act effectively.

Leggatt J then turned to the LCIA Rules relating to urgent relief:

  • Paragraph 9.1 of Article 9A of the LCIA Rules provides that in cases of "exceptional urgency", any party may apply to the LCIA Court for the expedited formation of the arbitral tribunal.
  • Paragraph 9.4 of Article 9B provides that "in the case of an emergency", at any time prior to the formation or expedited formation of the arbitral tribunal, any party may apply to the LCIA Court for the appointment of an emergency arbitrator.
  • Paragraph 9.12 of Article 9B provides that Article 9B shall not prejudice a party's right to apply to a state court or other legal authority for any interim or conservatory measure before the formation of the arbitral tribunal.

It was common ground that (1) the test of urgency in s 44(3) was to be assessed by reference to whether the arbitral tribunal has the power and practical ability to grant effective relief within the relevant timescale; and (2) there can be situations where the need for relief (e.g. a freezing injunction) is so urgent that the power to appoint an emergency arbitrator is insufficient and the court may properly act under s 44(3) of the Act – for example, if the application needs to be made without notice.

However, Leggatt J held that if an expedited tribunal could be constituted or an emergency arbitrator appointed within the relevant timeframe, and the expedited tribunal or emergency arbitrator could practically exercise the necessary powers, the test of "urgency" under s 44(5) of the Act will not be satisfied and the court will not have power to grant urgent relief. In other words, the court will only have power to grant urgent relief under s 44(3) where either:

  • there is insufficient time to form an expedited tribunal or appoint an emergency arbitrator; or
  • an expedited tribunal or emergency arbitrator could not exercise the necessary powers.

In the present case, the LCIA had considered Gerald Metals' application for an emergency arbitrator and dismissed the application in light of Safeguard's undertakings. As the case was not sufficiently urgent to satisfy the requirements of Article 9A or 9B under the LCIA Rules, it could not be urgent enough to fall within s 44(3) of the Act.

Accordingly, the application for relief was dismissed.


The case is significant because it provides that s 44(3) of the Act only empowers the court to grant urgent relief where effective relief could not be granted in a timely manner by the arbitral tribunal or other relevant body.

Although the facts of the case were somewhat unusual – the applicant had already applied to the LCIA Court for an emergency arbitrator and the application had been refused – the principle, as expressed by Leggatt J, was not confined to that particular fact pattern and was of general application.

As a result, arbitration rules (including the LCIA Rules) which give the parties more options to obtain urgent relief through an expedited tribunal or emergency arbitrator may at the same time reduce the ability of the English court to step in and provide urgent relief against one of the parties to the arbitration. The fact that the LCIA Rules themselves, in paragraph 9.12 of Article 9B, state that the emergency arbitrator provision "shall not prejudice" the parties' rights to apply for urgent relief from the court could not prevent the urgency limitation built in to s 44(5) from operating. This is not the effect the institutional rules were intended to have – it is generally said that emergency arbitrators are intended to provide an additional, rather than alternative, avenue of relief.

The impact of this decision is of course not limited to arbitrations under the LCIA Rules. The reasoning, if followed in subsequent cases, will apply in a similar way to arbitrations under other institutional rules (or arbitration agreements) which provide avenues for urgent relief. Indeed, the court has previously made some obiter comments in relation to urgent relief under the current ICC Arbitration Rules and the effect on s 44 of the Act: see Seele Middle East FZE v Drake & Scull International SA Co [2013] EWHC 4350 (TCC).

In light of the court's approach, parties arbitrating in London may wish to consider whether they ought to "opt out" of the emergency arbitrator provisions in the LCIA Rules (which is permissible under paragraph 9.14), so preserving as far as possible the jurisdiction of the English courts pursuant to s 44 of the Act (but at the expense of the option of an emergency arbitrator).  

Another option for parties to consider is including in their arbitration agreement a statement that they agree that certain matters amount to "a case of urgency" within the meaning of s 44(3) of the Act. Although such a clause could not override the limitation in s 44(5) of the Act or turn a genuinely non-urgent matter into an urgent one, it may go some way to persuading the court of the urgency of the situation.

For further information, please contact Chris Parker, Partner or Aaron McDonald, Associate.

Chris Parker
Chris Parker
+44 20 7466 2767
Aaron McDonald
Aaron McDonald
+44 20 7466 2980

Event: 31st Annual ICC and QMUL SIA Joint Symposium: “Powers and Duties of Arbitrators: Rules, Law, Practice and Ethics, Emergency Arbitration and Dealing with Sanctions”

Herbert Smith Freehills is pleased to be hosting the 31st Annual ICC and School of International Arbitration Joint Symposium on "Powers and Duties of Arbitrators: Rules, Law, Practice and Ethics, Emergency Arbitration and Dealing with Sanctions".  The Symposium is co-chaired by Antonias Dimolitsa (Vice Chair, ICC Institute of World Business Law) and Professor Julian D.M. Lew QC QC (Head of the School of International Arbitration at QMUL and Barrister at 20 Essex Street) and features a distinguished and international panel of speakers.  

The Symposium will take place on 29 February 2016 at Herbert Smith Freehills LLP, Exchange House, Primrose St, London EC2A 2EG.  

Please see below for further details and how to register.

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