Interim measures in International Arbitration

Introduction

Interim or conservatory measures are also referred to as provisional measures and the same are extremely important in international arbitration and international litigation. The relief sought by means of the request of an interim measure is usually to protect the rights or interests of the alleged innocent parties. Since there may be a gap between a request for arbitration and the formation of the arbitration tribunal, the subject matter or evidence may disappear, or irreparable or non-compensatory damages may occur frustrating the rights of one of the parties or making enforcement impossible.

Objective

The objective of the interim measure is to achieve the effectiveness of judicial protection so that parties in dispute can be stopped from causing prejudice, harm, or causing unwarranted damages to another party. However, in the past, there was a certain embargo upon the powers exercised by the arbitrators and tribunals at the time of granting provisional relief. In the modern era of arbitration, various national laws took the forward steps and reduced those limits, and vested more powers to the arbitrators and tribunals for granting interim measures. Provisional measures or conservatory measures are very much important in international commercial arbitration for protecting parties and their legitimate concerns.

Provisional measures are also known as “pre-award”, “interim, “protective” or “conservatory” measures, these terms are quite often used interchangeably. However, these terms are used in specific places for specific purposes such as “provisional” or “interim” orders are made prior to the final awards where the relief granted is not usually framed for protecting the parties during the course of proceedings and such orders are subject to alteration, modification or even elimination at the time of the final award. E.g. provisional or interim decisions include grants of interim protective measures aimed at preserving the status quo or interim determinations (such as permitting a party to remain in possession of property or to exercise contract rights) during the pendency of a proceeding.

On the other hand, “protective” or “conservatory” measures are used when relief granted is for protecting or conserving the rights of the parties. E.g. “protective” measures include provisional or final orders prohibiting a party from engaging n particular conduct (e.g., using intellectual property rights or other property).

One of the leading definitions is as follows:

“Properly defined, “provisional measures” are awards or orders issued for the purpose of protecting one or both parties to a dispute from damage during the course of the arbitral process. Most often as discussed below, provisional measures are “intended to preserve a factual or legal situation so as to safeguard rights the recognition of which is sought from the [tribunal] having jurisdiction as to the substance of the case”. [Van Uden Maritime BV v. Kommanditgesellschaft in Firma Deco-Line]

According to the European Court of Justice, interim measures are “intended to preserve a factual or legal position so as to safeguard rights the recognition of which sought from the court having jurisdiction as to the substance of the case”. The aim is to redistribute the risk for the duration of the arbitration shifting it from the party applying for the interim measure to the other party.

The 2006 revisions to Article 17 of the UNCITRAL Model Law provide a representative list of “interim measures” as follows:

“An interim measure is any temporary measure, whether in the form of an award or in another form, by which, at any time prior to the issuance of the award by which the dispute is finally decided, the arbitral tribunal orders a party to:

  1. Maintain or restore the status quo pending determination of the dispute;
  2. Take action that would prevent, or refrain from taking action that is likely to cause, current or imminent harm or prejudice to the arbitral process itself;
  3. Provide a means of preserving assets out of which a subsequent award may be satisfied; or
  4. Preserve evidence that may be relevant and material to the resolution of the dispute.”

However, it must be remembered that the arbitrator or tribunal needs to be empowered to order interim measures. The Model Law provides for an ‘opt-out’ mechanism where “unless the parties agree otherwise, the arbitrators can grant interim measures. The powers of arbitrators to grant an interim measure can be acknowledged by examining three specific questions:

  1. Applicability of international conventions;
  2. Applicable national laws; and
  3. The parties to an arbitration agreement, including institutional rules;

Powers of arbitrators to grant an interim measure under International conventions

International conventions do not directly address the powers of the arbitrators to grant the interim measure, e.g. the Geneva Protocol Convention and the Geneva Convention and the New York Convention also do not specify anything directly in regard to the powers of the arbitrator for making any interim orders and the same is with the Inter-American Convention. However, the European Convention unlike the above-mentioned conventions acknowledges provisional relief under Article VI (4):

“[a] request for interim measures or measures of conservation addressed to a judicial authority shall not be deemed incompatible with the arbitration agreement, or regarded as a submission of the substance of the case to the court”.

The language used in the aforementioned provision enables the parties to seek provisional or interim measures from the national courts, without waiving their right to arbitrate or violating the agreement entered between the parties. Furthermore, the ICSID Convention, under Article 47, recognizes the power of the arbitral tribunal to grant provisional relief:

“Except as the parties otherwise agree, the Tribunal may if it considers that the circumstances so require, recommend any provisional measures which should be taken to preserve the respective rights of either party.”

The ICSID convention ensures power to the tribunal to and subsequently rule upon the request of the provisional measure and the orders passed under Article 47 are binding in nature.

References

  • Opinion of the Advocate General Tesauro, The Queen v. Secretary of State for Transportation
  • GARY B. BORN, PROVISIONAL RELIEF IN INTERNATIONAL ARBITRATION
  • UNCITRAL Model Law
  • Julian Lew, Commentary on Interim and Conservatory Measures in ICC Arbitration cases
  • NALSAR University, International Commercial Arbitration

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