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

English court grants retroactive extension of time to enable arbitral process opportunity to “correct itself”

In a further example of the pro-arbitration exercise of pragmatism, in (1) Xstrata Coal Queensland Pty Ltd (2) Sumisho Coal Australia Pty Ltd (3) Itochu Coal Resources Australia Pty Ltd (4) ICRA OC Pty Ltd v Benxi Iron & Steel (Group) International Economic & Trading Co Ltd [2016] EWHC 2022 (Comm), the English High Court has granted an application under s79 of the English Arbitration Act 1996 (the "Act") to extend the time-limit within which a party could apply to the Tribunal under Article 27 of the LCIA Rules 1998 to correct an ambiguity relating to the identity of one of the Claimants.

Whilst the exercise of the Court's discretion has been helpful to the Claimants, the case is a reminder in transactions with related contracts and multiple parties to ensure that the parties are clearly and correctly defined and the parties bringing claims are those properly entitled to do so, either by virtue of being signatory to the arbitration agreement or by otherwise being able to benefit from it.

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English High Court: No inconsistency between exclusive jurisdiction and arbitration provisions

In Exmek Pharmaceuticals SAC v Alkem Laboratories Limited [2015] EWHC 3158 (Comm), the claimant ("Exmek") challenged an arbitral award for want of substantive jurisdiction, on grounds including the validity of the arbitration agreement; tacit abandonment by the defendant of reliance on the arbitration agreement; submission to the jurisdiction of the courts of Peru by the defendant; and the improper appointment of the Sole Arbitrator. The English High Court (the "Court") rejected the challenge, adopting a purposive and highly commercial approach to the construction of the arbitration agreement.

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LCIA releases costs and duration data – the first of more to come?

Yesterday, 3 November 2015, the London Court of International Arbitration ("LCIA") released costs and duration data regarding actual cases administered by the LCIA under the LCIA Rules. It is thought that this is the first time an arbitral institution has released such information. This move is no doubt part of a growing trend of, and indeed demand for, increased transparency in international arbitration. It remains to be seen how other arbitral institutions – and even perhaps some less transparent domestic commercial courts competing for big ticket commercial disputes –  will react and whether they will follow suit.

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The LCIA provides guidance notes to the LCIA Rules 2014 – the pertinent points

On 29 June 2015, the London Court of International Arbitration (“LCIA“) published guidance notes designed to facilitate the “diligent and timely conduct of arbitrations” under the LCIA Rules 2014 (the “Rules“). There are three separate notes: (i) for the parties to the proceedings; (ii) for arbitrators; and (iii) focussing on emergency procedures. A good example of the LCIA’s user-friendly approach to arbitration, the notes provide helpful advice which allows both arbitrators and parties to assist the LCIA Secretariat in ensuring arbitrations run smoothly. They provide a fascinating insight into the operation and approach of the LCIA to a number of important issues. It is likely that the notes will be referred to frequently in proceedings.

Below is a brief comment on each of the three notes; summarising the purpose and highlighting areas of particular interest.

To read the notes in full, please click here. Herbert Smith Freehills has produced a Step by Step Guide to Arbitration under the LCIA Rules 2014. To request a copy, please contact Arbitration.Info@hsf.com.

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The Proliferation of “Soft Laws” in International Arbitration: Time to Draw the Line?

Paula Hodges QC, Partner and Head of the Global Arbitration Practice at Herbert Smith Freehills has published an article on the impact of the proliferation of rules, guidelines, codes and protocols relating to international arbitration in recent years. The article considers how this so-called “soft law” finds its way into the arbitration process, the status it has attained and the impact it has.  It also questions whether the regulation of counsel conduct in arbitration by way of rules and guidance is a step too far. To read the full article please click here.

This article was first published in the Austrian Yearbook on International Arbitration 2015.

Paula Hodges QC
Paula Hodges QC
Partner, head of global arbitration practice
+44 20 7466 2027

ISDA releases Arbitration Guide

On 9 September 2013, the International Swaps and Derivatives Association (ISDA) published its long-awaited Arbitration Guide. The Guide comprises an explanatory memorandum which provides an overview of arbitration, together with model arbitration clauses (and guidance notes) for use with the ISDA 2002 Master Agreement and ISDA 1992 Master Agreement (Multicurrency – Cross Border). The model clauses are designed to be included in the Schedule to new Master Agreements, but are readily adaptable for use when amending an existing Maser Agreement to provide for arbitration.

The model clauses provide for a number of different combinations of arbitral rules/institution and seat of arbitration, including the ICC Rules (London, New York or Paris seat), LCIA Rules (London seat), AAA-ICDR Rules (New York seat), HKIAC Rules (Hong Kong seat), SIAC Rules (Singapore seat), Swiss Chambers’ Arbitration Institution Rules (Zurich or Geneva seat), and PRIME Finance Rules (London, New York or The Hague seat). In each case, the governing law of the Master Agreement will be either English or New York law.

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