“Exceptional Urgency” Under Expedited Proceedings – Considerations for a Successful Application

INTRODUCTION – EXPEDITED PROCEEDINGS UNDER DIAC RULES 2022

1. The Dubai International Arbitration Centre (DIAC) Arbitration Rules 2022 (DIAC Rules) provide a mechanism allowing the arbitral proceedings to be conducted on an expedited basis. As the name suggests, the process is designed to resolve disputes swiftly with features including:

• The appointment of a sole arbitrator within five (5) days from the Arbitration Court’s decision to conduct arbitration on an expedited basis[1]. Generally, the constitution of the Tribunal takes a considerably longer period.
• The issuance of the final award within three (3) months from the transmission of the file to the Tribunal[2] (as opposed to the usual six (6) months)[3].

2. Article 32.1 of the 2022 Rules promulgates the criteria for Expedited Proceedings, and states that the same shall take place:

• If the total of the sum(s) claimed and counterclaimed is below or equal to AED 1,000,000 (exclusive of interest and legal representation costs) or any other threshold amount as may be determined by the DIAC Board of Directors, or
• If the parties agree, in writing, for the proceedings to be conducted on an expedited basis, or
• In cases of exceptional urgency, as determined by the Arbitration Court upon an application by a party.

3. Whilst the criteria set out in Articles 32.1(a) and (b) of the DIAC Rules (as mentioned in paragraphs 2.1 and 2.2 above) are self-explanatory, the same cannot be said for Article 32.1(c). This is primarily because DIAC Rules do not define “exceptional urgency” and/or offer any guidance as to the type of circumstances that will satisfy this threshold. Accordingly, each application for Expedited Proceeding, which is made under Article 32.1(c) of the DIAC Rules, must necessarily be assessed on a case-by-case basis.
4. This article explores how other leading institutions like Hong Kong International Arbitration Centre (HKIAC), Singapore International Arbitration Centre (SIAC), and London Court of International Arbitration (LCIA) interpret this threshold, offering practical guidance for drafting successful applications under Article 32.1(c).

“EXCEPTIONAL URGENCY” UNDER OTHER INSTITUTIONAL RULES

5. Although the DIAC Rules do not provide any guidance, reference can be made to the approach taken by other arbitral institutions for insight regarding the type of circumstances that may constitute “exceptional urgency”, warranting Expedited Proceedings.
6. The criterion of “exceptional urgency” is not unique to DIAC. It is also stipulated in the rules of other major arbitral bodies, including HKIAC, SIAC and LCIA.
7. Article 42.1(c) of the HKIAC 2018 Administered Arbitration Rules (HKIAC Rules) allows a party to apply to HKIAC for Expedited Proceedings “in cases of exceptional urgency”. Similarly, Article 5.1(c) of the SIAC 2016 Arbitration Rules[4] (SIAC Rules) allows a party to make an application for Expedited Proceedings if the party satisfies “cases of exceptional urgency”. Additionally, Article 9A of the LCIA Arbitration Rules 2020 (LCIA Rules) provides for the expedited formation of the Arbitral Tribunal in cases of “exceptional urgency”[5].
8. The following are some examples of circumstances wherein the afore-mentioned Arbitral Institutions have interpreted “exceptional urgency” in the context of “Expedited Proceedings”.

9. HKIAC Rules:

• The application for Expedited Proceedings, which was based on the ground of “exceptional urgency”, was granted in a matter where the Respondent’s actions allegedly obstructed a board approval, which was requisite for the completion of a crucial deal pertinent to the business of the subject company, and without which, the transaction could collapse.[6] In light of the circumstances, HIAC found that the criteria of “exceptional urgency” were made out, given (i) the imminent deadline for the conclusion of the subject transaction and (ii) the irreparable harm which the claimant was exposed to, should the transaction fail.[7]
• However, in another case[8], HKIAC rejected an application made under the ground of “exceptional urgency”[9]. In this case, the First Respondent was required to make certain capital contributions to the Claimant. The Claimant claimed that the threshold for “exceptional urgency” was made out as without such capital contribution, the Claimant risked insolvency within 30 days from the application.[10] Whilst HKIAC was satisfied that the Claimant had established “urgency” due to its alleged financial difficulties[11], it failed to demonstrate that such urgency was “exceptional”.[12] HKIAC noted that while a lack of committed financing can naturally lead to insolvency, the Claimant did not provide enough detail explaining why urgent funding was required in this instance.[13] As such, the Claimant failed to satisfy that the alleged urgency was “exceptional” in nature. Furthermore, HKIAC noted that given the complex and high value nature of the dispute, the prejudice caused to the Respondents by forcing them to an expedited procedure would outweigh any benefits that the Claimant may obtain from conducting the proceedings on an expedited basis.[14]
• Furthermore, circumstances such as (i) the respondent’s deteriorating financial health and no possible defense on merits (especially when the claimant wait a long time before commencing arbitration), (ii) the fluctuation of the market price of the shares in a dispute concerning the delivery of shares, (iii) the requirement of the operational funding from respondents, in the presence of a credit facility etc., were not considered as exceptionally urgent to warrant Expedited Proceedings by HKIAC.[15]
• Based on the above, it is evident that in determining whether the criteria of “exceptional urgency” is made out, HKIAC conducts a two-prong test: first, it determines whether there is urgency, and second, whether the urgency is exceptional. [16]

10. SIAC Rules:

• The following circumstances were successfully argued by the claimants to warrant expedition on the basis of “exceptional urgency” under SIAC Rules:

1. The dispute prevented the claimant from performing third-party contracts, resulting in the claimant sustaining significant losses, which were in excess of the claims which were the subject matter of the arbitration.[17]
2. The respondent’s alleged failure to make payments prevented the claimant from making payments to third parties, exposing it to liabilities from third parties.[18]
3. The other party was expected to receive a significant sum under a settlement agreement, which could be used by that party to honor the adverse award issued against it under the subject arbitration; however, the sum was at the risk of being dissipated by that party if the award in the subject arbitration was not issued expeditiously.[19]

11. LCIA Rules:

• The following are some examples where the applications for an Expedited Formation of the Tribunal were granted and rejected by the LCIA on the grounds of “exceptional urgency”:

1. Applications were granted, where the applicants showed that (i) there was a risk that the arbitration may become moot due to the respondent bringing proceedings before the state courts, (ii) there was a threat by one party in respect of the dissipation of common asset, (iii) in a dispute between the shareholders, there was a risk that the company will be paralyzed due to the actions of one party, (iv) in a dispute arising out of a consultancy contract, the applicant faced prolonged unemployment due to the existence of a non-competition clause therein, (v) there was an imminent risk of the applicant’s bankruptcy due to the actions of the other party, (vi) there was a threat of the transfer of confidential intellectual property, etc.[20]
2. That said, the applications were not granted where (i) there were proceedings before the national courts in breach of the parties’ arbitration agreement, (ii) the damages could be compensated by way of monetary claims, (iii) the claimant cited concerns regarding the financial health of the respondent, however did not show how those concerns would be resolved if the proceedings were expedited, (iv) the claimant waited a long period before filing the request for expedited proceedings, (v) the application was merely based on respondent not having any defense to the claim, (vi) it was claimed that the dispute involved a simple issue etc.[21]

CONSIDERATIONS FOR A SUCCESSFUL APPLICATION

12. The analysis of practice under the rules above confirms that the assessment of what constitutes “exceptional urgency” is a strictly fact-driven exercise. Despite the lack of an explicit definition in institutional rules such as the DIAC Rules, some insight and guidance can be obtained from the decisions of institutions like HKIAC, SIAC and LCIA. Having analyzed the approach taken by the said institutions, it can be seen that to successfully request Expedited Proceedings under DIAC’s “exceptional urgency” ground, a party must demonstrate (without limitation):

• A genuine and time-sensitive threat;
• Irreparable harm that only an expedited arbitral process can effectively mitigate;
• Irreparable harm that cannot be compensated with damages.
• The probable prejudice to the other party, if any, does not outweigh the benefit that the Expedited Proceedings will provide;
• Timely filing of the application, etc.

13. It is only upon the satisfaction of this seemingly high threshold that the requirement of “exceptional urgency” can be made out, to warrant Expedited Proceedings under the institutional rules, including Article 32.1(c) of the 2022 Rules.

References 

[1] Article 32.2 of the 2022 Rules

[2] Article 32.5 of the 2022 Rules

[3] Article 35.1 of the 2022 Rules

[4] It is noted that the Singapore International Arbitration Centre Rules (7^th Edition), in force from 1 January 2025 do not contain the same criteria for Expedited Proceedings (see Article 14)

[5] Article 9A deals with the Expedited formation of the Arbitral Tribunal as opposed to Expedited Proceedings. Nonetheless, the same is referenced herein this article to discuss the criteria of “exceptional urgency” as promulgated in the article

[6] Chapter 12: Expedited Procedure and Early Determination Procedure (Articles 42–43, HKIAC Administered Arbitration Rules 2018)’, in Michael J. Moser and Chiann Bao, A Guide to the HKIAC Arbitration Rules (Second Edition), pp. 347 – 368, para. 12.25

[7] Ibid, para. 12.26

[8] Sarah Grimmer, ‘A. v. B. & Anor (Applicability of Expedited Procedure), HKIAC Case ID CD2021/12/08, 01 October 2018’, A contribution by the ITA Board of Reporters

[9] This case was under the 2013 HKIAC Administered Arbitration Rules, however, “exceptional urgency” is identified as a criterion under these rules as well

[10] Sarah Grimmer, ‘A. v. B. & Anor (Applicability of Expedited Procedure), HKIAC Case ID CD2021/12/08, 01 October 2018’, A contribution by the ITA Board of Reporters, pg. 2

[11] Ibid, pg. 3

[12] Ibid, pg. 4

[13] Ibid, pg. 4

[14] Ibid, pg. 4

[15] Chapter 12: Expedited Procedure and Early Determination Procedure (Articles 42–43, HKIAC Administered Arbitration Rules 2018)’, in Michael J. Moser and Chiann Bao, A Guide to the HKIAC Arbitration Rules (Second Edition), pp. 347 – 368, para. 12.27

[16] Ibid, para. 12.24

[17] 6. Expedited Proceedings (SIAC Rule 5)’, in John Choong, Mark Mangan, et al., A Guide to the SIAC Arbitration Rules (Second Edition), pp. 99 – 109, para. 6.17

[18] Ibid, para. 6.17

[19] Ibid, para. 6.18

[20] Maxi Scherer, ‘Chapter 10: Expedited Formation of the Arbitral Tribunal, Emergency Arbitrator and Expedited Replacement of Arbitrators’, in Maxi Scherer, Lisa Richman, et al., Arbitrating under the 2020 LCIA Rules: A User’s Guide, pp. 145 – 184, para. 15

[21] Ibid, para. 16

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