INTRODUCTION A final award may be of little value to the successful party if, in the meantime, the behavior of the other party renders the outcome of the proceedings largely ineffectual—such as when the recalcitrant party dissipates its assets or places them in a jurisdiction where enforcement is cumbersome or otherwise impossible. To avoid this type of harm, the precautionary claimant may request interim relief. This relief might take the form of an order restricting a party from tran transfe sferri rring ng money money to a less less favor favorabl ablee enfor enforcem cemen entt regim regimee or an order order appoi appoint ntin ingg an administrator of assets. Interim measures being employed in arbitral proceedings—such as orders, attachments, andor injunctions vary widely, with international trade practice continuing to generate new kinds of remedies according to the needs of the parties and the increasing comple!ity of cases. "equests for interim relief typically seek some kind of protection of assets or property during the time when the ultimate determination of the facts and law of the case is still being made.# The rationale for interim relief is to preserve both assets and property throughout the entirety of the arbitration process, thus preventing an arbitrator$s final ruling from being meaningless due to the actions of the parties involved.% Thus, such measures are having huge practical importance and are often an indispensable part of the arbitral process. Traditionally, Traditionally, requests for interim relief have been a construct of courts.& 'owever, arbitrators are increasingly being asked to make such rulings themselves.( "equesting interim relief from an arbitrator, as opposed to the court, is particularly appealing in international arbitration, where parties often engage in arbitration as a way of avoiding local courts and any home court 1)T*+* -. II/I0 1 234A )-*55*" , A P RACTICAL GUIDE TO I NTERNATIONAL NTERNATIONAL C OMMERCIAL OMMERCIAL
A RBITRATION : ASSESSMENT P P LANNING AND RBITRATION : LANNING AND S TRATEGY TRATEGY , p. %%6 7%6#68. NTERIM M EASURES IN THE L 9. *9:A 1 " I4'A"2 2A5A " *2*" M , IN THE L EADING *2*", 5A9"*4* 9. I4'A"2 2. 9I55 *2)., I UIDE TO I NTERNATIONAL A RBITRATION %6&, %6&, %6; 7%66<8= " I4'A"2 9. AI:A"> 1 1 )T*-'AI* *. A RBITRATORS ’ GUIDE TO I4'A"2 9. NALYSIS OF UNCITRAL UESTIONNAIRES ON I UNCITRAL Q UESTIONNAIRES ON I NTERIM R R ELIEF , #? :*A5*@) IT5 A". "*-. p. # 7%66#8. **" , A NALYSIS OF > **"
3 AI:A"> 1 1 > **" **" , Supra Note %, at p. #. 4Id.= A 2"*A) " *I*" *I*" , 5*) :*)3"*) -"0+I)0I"*) *T 40)*"+AT0 I"*) *T 5$A T*"ATI0A5, 5$A"IT"AB* I T*"ATI0A5
0TA::*T 5$A 5$A"IT"AB* 44I, ( Cournal de 2roit IT$5
advantage that may be associated with them.D)ometimes, though, interim relief may be unavailable from the arbitral tribunal= for e!ample, when coercion is associated with the requested measure. In such situations, the powers to grant interim measures are shared between arbitral tribunals and courts. @et, it appears necessary to draw boundaries between their respective areas of jurisdiction.
5 AI:A"> 1 > **" ,
supra note %, at &= " A@:02 C. 9 *"I4>I, T'0:A) 4 A"0E *A3 1 C *A*TT* A. CA*BBI eds., A RBITRAL I NTERIM M EASURES : F ACT OR F ICTION F, 'andbook on International Arbitration and A2", p. <;, ;6 7%6#68.
CHAPTERISATION CHAPTER1 TO
DISCUSS THE CONDITIONS PRECEDENT, FORMS AND THE VARIED PURPOSE
OF THE ‘INTERIM RELIEF’
Interim measures provide a party to arbitration with immediate and temporary protection of rights or property during the period of time when a decision on the merits by the arbitral tribunal remains pending.? These measures vary widely according to the needs of the parties and the comple!ity of the cases in international trade practice.G Article #G7%8 of the 34IT"A5 :odel 5aw on International 4ommercial Arbitration 7hereinafter H:A58 lists four functions of interim measuresJ maintenance of the status quo= protection of the arbitral process itself= preservation of assets= and preservation of evidence.< This list is not e!haustive and an interim measure may, of course, serve more purposes at the same time.; 1. Conditions Precedent for granting Interim Relief
:ost sets of arbitral rules are silent on the precise conditions under which interim measures may be ordered.#6%; In practice, however, arbitral tribunals have developed standards for granting
6 BA"@ . 0", I NTERNATIONAL C OMMERCIAL A RBITRATION , p. ;(% 7%66;8. EASURES IN I NTERNATIONAL C OMMERCIAL A RBITRATION U NDER THE ICC, AAA, 7 B"KB0I"* :A"4'A4 , I NTERIM M LCIA AND UNCITRAL R ULES , #6 A: . "*+ . IT$5 A"., p. #%& 7#;;;8.
8 34IT"A5 :odel 5aw on International 4ommercial Arbitration, 34IT"A5, #
|
A(6#G 7Cune %#, #;
E*"2
9*IBA2 ed., -ractitioner$s 'andbook 0n International 4ommercial Arbitration L #(.%<%, % nd ed. 7%6#68. 10 IB*5 5A4>A@ et al., " *2*" A 2 '3T*" , I NTERNATIONAL A RBITRATION L D.%< 7D th ed. %66;8.
interim measures.##&6 The usual requirements include imminent harm and the likelihood of success on the merits on the part of the applicant. The :A5, as amended in %66?, adopted these practices and e!pressly sets forth the conditions for granting interim measures.#%&% According to :A5 Article #GA, the requesting party has to demonstrate to the tribunal that there is, on the one hand, the necessity of irreparable harm and, on the other hand, a reasonable possibility of the applicant$s success on the merits of the case.#& Hoth conditions have to be satisfied equally. #(&( Additionally, :A5 Article #GA requires that the imminent harm outweigh the harm caused by the interim measure against the other party.#D&D Thus, the arbitral tribunal should take the effect of the interim measure on the arbitrating parties into account to ensure that the harm caused by the measure is not out of proportion to the benefit gained by applicant.#?&? The conditions set out in :A5 Article #GA7#8 are comparable to the Hbalance of convenience test, which is often applied by courts in common law jurisdictions. As to the burden of proof, the applicant has to meet the burden of convincing the arbitral tribunal that both conditions are fulfilled. or the preservation of evidence, :A5 Article #GA7%8 provides that the tribunal may apply less onerous conditions than set forth in :A5 Article #GA7#8 if it considers preservation of evidence important. HThis seems a sensible solution since the preservation of evidence is a matter of direct interest to the entire arbitral process, which should not be hindered by strict conditions. 2. orms of Interim !eas"res
11 5A4>A@ *T A5., !upra note #6, L D.%<. 12 34IT"A5 :odel Arbitration 5aw, Art. #GA.
13 I"# 14 "oth, supra note ;, L #(.%<; 15 34IT"A5 :odel Arbitration 5aw, Art. #GA. 16 " *2*", !upra note %, at %%;= >5A3) -*T*" *"B*", % P RI$ATE D ISPUTE R ESOLUTION I NINTERNATIONAL BUSINESS # L %#E#& 7%66?8.
"egarding the form of interim measures, they can either be rendered as a procedural order or as an interim award.#G 9here the former can be described as more informal, the latter is more formal.#< The various sets of rules give the arbitrators broad discretion whether to issue an interim measure in the form of a procedural order or in the form of a more formal interim award. In e!ercising its discretion whether to render an award or an order, the tribunal will consider the kind of measure being invoked—whether procedural or contractual in nature—as well as the applicable procedural law.#; 'owever, arbitrators are usually in favor of issuing an informal procedural order because a more formal interim award may appear too similar to a decision on the merits of the dispute.%6 #. P"r$oses %e&ind t&e granting of t&e Interim Relief
a8 :aintenance of the )tatusEquo According to :A5 Article #G7%87a8, an interim measure should maintain the status quo until a final decision on the merits of the case is rendered.%# or e!ample, one may think of an international construction dispute where the tribunal requests the general contractor to continue working even though it claims it is entitled to suspend the work unless the customer makes payments in addition to the amount owed under contract. At the same time, the customer is usually ordered to continue making those payments it undoubtedly owes under the contract.
17 " *2*", !upra note %, at %&?= 'A*))IA 1 :A"> , !upra note %6, at ?#. 18 BA"@ . 0", I NTERNATIONAL C OMMERCIAL A RBITRATION , p. ;(% 7%66;8. 19A 2"*A) " *I*" , 5*) :*)3"*) -"0+I)0I"*) *T 40)*"+AT0 I"*) *T 5$A"IT"AB* I T*"ATI0A5,
0TA::*T 5$A"IT"AB* 44I, ( Cournal de 2roit IT$5
0bviously, such an interim measure prevents the costly standstill of construction work on a building site while a final decision on the merits of the case is pending.%% :aintaining the status quo is widely accepted in many legal systems as one important purpose of interim measures.%& b8 -rotection of the Arbitral -rocess Itself :A5 Article #G7%87b8 empowers the arbitral tribunal to prevent a party from taking any actions that may cause obstruction or delay of the arbitral process.%( An e!ample in this category is the issuance of antiEsuit injunctions.%D These are interim measures by which an arbitral tribunal orders a party not to pursue parallel court proceedings or other separate legal proceedings in the same matter.%? Accordingly, such a measure aims to avoid contradictory results. c8 -reservation of Assets :A5 Article #G7%87c8 entitles the arbitral tribunal to issue interim measures preserving party assets so as to secure the enforcement of the final award.%G 'ence, under this provision, the tribunal may be asked to issue an interim measure aimed at securing the assets out of which a subsequently rendered award may be satisfied. :easures in this category include those interim efforts used to avoid loss or damage.%< or e!ample, such measures might include an order restraining a party from transferring money to a less favorable enforcement regime—such as 22 BA"@ . 0", I NTERNATIONAL C OMMERCIAL A RBITRATION , p. #&(, 7%66;8. 23 3 ..90">IB B"03- 0 A"IT"ATI0, L %&, 3.. 204 A4.;D(D 7%6#%8= "oth, !upra note <, L #(,
at %<(. 24 UNCITRAL M ODEL A RBITRATION L A , Art. #G7%8. NTERIM M EASURES OF 25 )32A"*)' :*0 1 *5AI* 4'0A, R EFORMING THE M ODEL L A P RO$ISIONS ON I P ROTECTION , ? A)IA IT$5 A". C. #, D 7%66?8.
N S UPPORT O F A RBITRATION , #% *3". 3). 5. "*+. #(& 7%66&8. 26 503I) 5A*"@, A NTI %S UIT I N&UNCTIONS I
27 Supra Note '(# 28 3.. )ecretaryEBeneral, Po!!)*+e U)-or. Ru+e! o Certa) I!!ue! Co/er)0 Sett+e.et o- Co..er/)a+ D)!pute!, L ?&, 3.. 204. A4.;9B.II9-.#6< 7Can. #(, %6668.
some islands in the 4aribbean )ea that are not parties to the ew @ork 4onvention on the "ecognition and *nforcement of oreign Arbitral Awards #;D< 7hereinafter ew @ork 4onvention8—an order appointing an administrator of assets, or an order to safeguard goods. d8 -reservation of *vidence -ursuant to :A5 Article #G7%87d8, the arbitral tribunal can Hpreserve evidence that may be relevant and material to the resolution of the dispute in order to secure the proper conduct of the proceedings.%; This can be done, for e!ample, by appointing an independent e!pert who evaluates the quality of perishable goods. The arbitrators might also require a party to grant the opposing party an opportunity to inspect the premises in question in order to seek out and preserve evidence. HThe purpose of this preservation is to facilitate the proper conduct of the arbitral process.&6
29 UNCITRAL M ODEL A RBITRATION L A , Art. #G7%87d8. 30 "oth, supra note ;, L #(.%
CHAPTER 2 TO DISCUSS THE PO'ER O THE COURT TO (RANT INTERI! !EASURES
The power of the arbitral tribunal to order interim measures must be established under the applicable procedural law, which is the law chosen by the parties or, in absence of such choice, the law of the place of arbitration. The major sets of arbitral rules provide for provisions which e!pressly empower the arbitrator to order interim measures.&% The 34IT"A5 :A5, which serves as a model for national legislators drafting their own arbitration acts, was amended in %66? and has provided detailed rules regarding interim measures since that time.&& The relevant provisions under the Arbitration "ules of the International 4hamber of 4ommerce 7I448, the International 4entre for 2ispute "esolution 7I42"8, the 5ondon 4ourt of International Arbitration 754IA8 and the 3nited ations 4ommission on International Trade 5aw 734IT"A58 are more or less detailed and vary as to the scope of interim measuresJ whereas most arbitral regimes give broad powers to arbitrators, who may grant any measures they deem appropriate or necessary, under some rules, such as the 54IA "ules, the tribunal may only take measures it deems necessary in respect to the subject matter of the dispute.&( Thus, the scope of interim measures under the 54IA "ules seems to be more limited compared to other rules because the measure has to be in direct relation to the subject matter of the dispute. one of the many arbitral rules limit arbitrators to the traditional remedies provided in the procedural law of the place of arbitration. 'owever, it should be noted that the enforcement of innovative measures could prove difficult if the state where enforcement is sought is not familiar with these kinds of 31Brant 'anessian 1 CMrgen :ark, Brant 'anessian 1 5awrence 9. ewman eds., Pro1)!)oa+ Re+)e- ,
International Arbitration 4hecklists, p. ?# 7%66;8. 32 International 4hamber of 4ommerce 7I448 "ules of Arbitration, Art. %<, effective Canuary #, %6#%, %6##,
Nhereinafter I44 "ulesO= International 4entre for 2ispute "esolution 7I42"8 International Arbitration "ules, Art. %#7#8, effective Cune #, #;;;, Nhereinafter I42" "ulesO= 34IT"A5 :odel Arbitration 5aw, !upra note <, Art. %?7#8, 7%8= 5ondon 4ourt of International Arbitration 754IA8 Arbitration "ules, Art. %D, effective Can. #, #;;<, Nhereinafter 54IA "ulesO. 33 "oth, supra note ;, L #(.%G6. 34 54IA "ules, supra note %#, art. %D7#87b8.
interim measures.&D Benerally, arbitrators have Hwide discretion in deciding whether the requested measure is appropriate or necessary.&? onetheless, in practice arbitrators tend to use their authority to grant interim measures reluctantly because they do not want to appear as if they have already decided the merits of the case before the facts are firmly established or in favor of one party.&G The recent trend of arbitral rules and national arbitration acts is to vest the arbitrators with e!press powers to order interim awards.&
To address concerns that requests for interim measures and preliminary orders may be subject to abuse, the :A5 e!plicitly provides for a number of safeguards. The :A5, and most arbitral rules, empower the tribunal to order appropriate security in connection with an interim measure or a preliminary order. In the case of a preliminary order, the tribunal shall, as a principle, require the requesting party to provide security= whereas, in case of an interim measure, the order for security is left to the tribunal$s discretion.(60nly if the arbitral tribunal considers it inappropriate or unnecessary may it refrain from requiring security from the party applying for a preliminary order. Additionally, the :A5 e!pressly empowers the tribunal to modify, suspend, or terminate an interim measure or a preliminary order upon application of a party.(#In e!ceptional 35 :archac, supra note G, at #%<. 36 I44 "ules, !upra note %#, art. %<7#8= I42" "ules, !upra note %#, art. %#7#8= :archac, !upra note G, at #%;. 37 :archac, supra note G, at #%;. 38 0", !upra note ?, at #;??= ' A*))IA 1 :A"> , !upra note %6, at ?#= " *2*", !upra note %, at %6;. 39 'A*))IA 1 :A"> , supra note %6, at ?#= 9 *"I4>I, supra note D, at ;?.
40
UNCITRAL M ODEL A RBITRATION L A , Art. #G*
41
UNCITRAL M ODEL A RBITRATION L A , Art. #G2
circumstances, such as when the measure appears to have been granted on an erroneous or fraudulent basis, the arbitral tribunal may modify, suspend, or terminate the measure on its own initiative. In such a case, it must notify the parties of the envisaged modification, suspension, or termination beforehand. urther, :A5 Article #G codifies the parties$ obligation to disclose a material change of circumstances on the basis of which an interim measure or a preliminary order was requested or granted. inally, the :A5, and some arbitral rules, e!pressly acknowledge the requesting party$s liability as to costs and damages caused by the interim measure or provisional order if the measure or order later proves to be unjustified.(%
42
UNCITRAL A RBITRATION RULES , Art. %?7<8= UNCITRAL M ODEL A RBITRATION L A , Art. #GB.
CHAPTER 3 TO
DISCUSS
ABOUT THE
RECOGNITION
AND
ENFORCEMENT
OF
INTERIM
RELIEF
In terms of the recognition and enforcement of interim measures, court intervention is ultimately needed since arbitrators lack coercive powers and cannot e!ercise public authority. It is controversial whether interim awards qualify for recognition and enforcement under the ew @ork 4onvention since such awards are not final, but provisional in nature, and may therefore be reconsidered during the procedure.(& Additionally, national laws vary widely as to recognition and enforcement of interim measures.(( Therefore, the :A5 provisions, as amended in %66?, aim at harmoniPing the various national laws by providing a common regime for recognition and enforcement of interim measures.(D The 34IT"A5 )ecretariat e!plained the necessity of the revision e!plicitly under the fact that the effectiveness of arbitration frequently depends upon the possibility of enforcing interim measures. Twelve countries have already enacted legislation based on these :A5 provisions, among them are countries such as Australia, 4hina, 'ong >ong, lorida, Ireland, and ew /ealand. :A5 Article #G '7#8 provides that an interim measure shall be recogniPed as binding and enforceable upon application to the competent court, irrespective of the country in which it was issued.(? Taking into account the fact that arbitrators often grant interim measures Hin Qneutral$ places where the parties do not have assets, this provision is particularly important.(G The :A5 provides safeguards in order to protect the party against whom the interim measure is to be enforced. :A5 Article #G'7%8 imposes an obligation on the party seeking enforcement to inform the court of any termination, modification, or suspension of the measure. This is important since, for 43 0", !upra note ?, at %6%#.
44
UNCITRAL M ODEL A RBITRATION L A , !upra note <= : A"4'A4, !upra note G, at #&?.
45
UNCITRAL M ODEL A RBITRATION L A , !upra note <, *!planatory ote A.%= " 0T', !upra note ;, LL #(.#;,
46
UNCITRAL M ODEL A RBITRATION L A , !upra note <, Art. #G'7#8.
47 " 0T', !upra note ;, L #(.&&G.
#(.&&&.
e!ample, the termination of an interim measure is recogniPed as a possible ground for refusing recognition and enforcement.(< urther, the court of the state where recognition and enforcement is sought may order the requesting party to provide appropriate security. 'owever, the power of the court to order security is limited to cases where the tribunal has not already rendered a respective decision or where it is necessary to protect the rights of third parties. urther, the :A5 enumerates a number of limited grounds for refusal of recognition and enforcement of interim measures.(; :A5 Article #GI mentions a number of familiar defects, which also qualify as grounds for resisting enforcement of a final award under Article + of the ew @ork 4onvention.D6 )uch grounds include severe failures regarding the arbitral process as well as the substantive grounds such as the lack of arbitrability and violation of public policy. Additionally, the :A5 names specific grounds for refusal of recognition and enforcement of interim measures.D# These specific grounds include nonEcompliance with the tribunal$s security order, termination or suspension of the interim measure by the arbitral tribunal or court, and incompatibility of the interim measure with the powers conferred upon the enforcement court.D% 'owever, the court may reformulate the interim measure to adapt it to its own powers and procedures without modifying its substance. 4ommon to all of these grounds is the fact that the court will not review the decisionEmaking of the arbitral tribunal that led to the issuance of the measure.D&
48
UNCITRAL M ODEL A RBITRATION L A , !upra note <,
49
UNCITRAL M ODEL A RBITRATION L A , !upra note <, Art. #G I.
50
ATIONS C ON$ENTION ON THE R ECOGNITION AND E NFORCEMENT OF F OREIGN A RBITRAL AARDS , %# 3.).T. %D#G, 7Cune #6, #;D<8, U NITED N
Art. #GI7#87a87iii8.
Art. +.
51
UNCITRAL M ODEL A RBITRATION L A , !upra note <, Arts. #G
52
UNCITRAL M ODEL A RBITRATION L A , !upra note <, Arts.#G I
53 I"# Art. #GI7%8.
I7#87a87ii8, 7iii8, 7b8.
7#87a87ii8, 7iii8.
CONC+USION Interim measures provide a party to arbitration with an immediate and temporary protection of rights or property. ecause parties usually agree to arbitration in order to avoid litigating their dispute before national courts, the possibility to obtain interim relief from the arbitral tribunal is particularly important. Thus, arbitrators are generally vested with broad powers to order interim relief. 'owever, in certain circumstances, the arbitral tribunal$s ability to grant interim measures may be limited. irst, arbitrators may ordinarily issue interim measures only after their constitution. 'owever, in order to secure the availability of interim relief before the arbitral tribunal has been properly constituted, some arbitral rules have recently promulgated so called emergency provisions. *mergency provisions provide for a mechanism under which a party seeking urgent interim relief before the arbitral tribunal is in place can apply for the appointment of an emergency arbitrator. )econd, arbitrators lack coercive powers. 4onsequently, the arbitral tribunal is neither empowered to order interim measures against third parties nor to directly enforce the interim measures. In such cases, the assistance of local courts is needed to ensure the effectiveness of an interim measure. Accordingly, national courts play an important complementary role where they order and enforce interim measures. All in all, :A5 Article #G et !e2# fosters the harmoniPation of the varying national laws on interim measures and thereby helps to establish a reliable and efficient system of interim relief in international commercial arbitration.
,OO-S
)T*+* -. II/I0 1 234A )-*55*" , A P RACTICAL GUIDE TO I NTERNATIONAL C OMMERCIAL A RBITRATION : ASSESSMENT P LANNING AND S TRATEGY , 7%6#68. A5A " *2*", 5A9"*4* 9. *9:A 1 " I4'A"2 2. 9I55 *2)., I NTERIM M EASURES , IN THE L EADING A RBITRATORS ’ GUIDE TO I NTERNATIONAL
" A@:02 C. 9*"I4>I, T'0:A) 4A"0E *A3 1 C*A*TT* A. CA*BBI eds., A RBITRAL I NTERIM M EASURES : F ACT OR F ICTION F, 'andbook on International Arbitration and A2" BA"@ . 0", I NTERNATIONAL C OMMERCIAL A RBITRATION , p. ;(% 7%66;8. :A"IA* " 0T', UNCITRAL M ODEL L A ON I NTERNATIONAL C OMMERCIAL A RBITRATION , "A> E*"2 9*IBA2 *2., -"A4TITI0*" $) 'A200> 0 I T*"ATI0A5 40::*"4IA5 A"IT"ATI0 L #(.%<%, %nd ed. 7%6#68.
OURNA+S
A 2"*A) " *I*" , 5*) :*)3"*) -"0+I)0I"*) *T 40)*"+AT0 I"*) *T 5$A"IT"AB* I T*"ATI0A5, 0TA::*T 5$A"IT"AB* 44I, ( Cournal de 2roit IT$5 1 )T*-'AI* *. > **" , A NALYSIS OF UNCITRAL QUESTIONNAIRES ON I NTERIM R ELIEF , #? :*A5*@) IT5 A". "*-. p. # 7%66#8. BrRgoire :archac, Iter). Mea!ure! ) Iterat)oa+ Co..er/)a+ Ar*)trat)o U"er t3e ICC, AAA, LCIA a" UNCITRAL Ru+e! , #6 A: . "*+ . IT$5 A"., p. #%& 7#;;;8.