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Interim Relief Victory in Emergency Arbitration

December 2021

A lean team from Quinn Emanuel Paris (just three lawyers)’conceived, prepared, and ran seven parallel emergency arbitrations, against seven different companies, under two sets of rules and the law of three jurisdictions, securing an overwhelmingly favorable set of emergency decisions that preserve the firm’s client’s interests.  And all within just three weeks. 

This was a textbook example of the benefits of using emergency arbitration, if available, protect a client’s rights in the face of sudden and aggressive action.  Not only is emergency arbitration a powerful tool before an arbitral tribunal can be constituted.  If successful, it may end the dispute before it takes off (and places the counterparty in a defensive position at the outset and impresses the tribunal as to the underlying merits). 

Quinn Emanuel’s client, a renowned international hotel chain, had in the past three decades established a market-leading presence in Russia.  Its portfolio includes seven hotels located in strategically important Russian cities outside of Moscow and St. Petersburg.  The hotels are of significant strategic importance to the client, as they ensure a continued brand presence across Russia over the next decades.  Were the client to lose the hotels, it would be difficult to replace them.

This, however, was the prospect our client faced in late June 2021, when the owner of the seven franchised hotels took crude but pre-meditated measures to replace the client’s brand with its own.  In just 48 hours, and without providing notice, it dismantled and removed the ’client’s name from the hotels’ signage, installed its own website to market the hotels, contacted booking agencies to prevent bookings through the client’s website, and sent notifications to its clients stating that the hotels would henceforth be operated under another brand.  In two days, seven of the client’s hotels disappeared.  The pretext?  COVID-19 and alleged impossibility of performance. 

Quinn Emanuel opted for the most aggressive measure: emergency interim relief.  This is not easy to secure.  It requires an applicant to demonstrate that there is a serious risk of irreparable harm arising out of the impugned conduct, such that the applicant cannot await the constitution of an arbitral tribunal (i.e., about one or two months), and that the harm likely to result to the party against whom the measures are sought is outweighed by the harm that will be suffered by the requesting party if the measures are not granted (balance of interests). 

While the owner was busy announcing to the world its seven new additions to its brand, it was hit with seven separate emergency arbitrations in one day. 

The end result?  Five out of the seven emergency arbitrators—qualified in jurisdictions as diverse as England, New Zealand, Switzerland, Finland and France—independently ordered the respondent to revert immediately to the status quo ante, i.e., to reinstate the signage, the client’s brand name, and cease all marketing of the hotels under the other brand.  A sixth emergency arbitrator did not order emergency relief, but took the highly unusual step of ordering the respondent to pay half of the upfront costs our client had incurred.  The respondents were ordered to pay almost all of our client’s legal costs.  The other side has now approached our client to negotiate a settlement.  There is a real chance that the client will increase its hotel portfolio in the region.