What interim measures are available? Will local courts issue interim measures pending the constitution of the tribunal?
International Arbitration (2nd Edition)
Even though Article 17 of the International Commercial Arbitration Law No 19.971 (ICAL) allows the arbitral tribunals to grant interim measures upon parties’ request, there is a lack of regulation regarding the types of preliminary relief available, since Chile has not yet subscribed the 2006 Model Law modifications. Furthermore, the arbitral tribunals lack of the compulsory power necessary to enforce those interim measures, therefore, parties recur to local courts in search of preliminary relief, in accordance to Article 9 of ICAL.
Local courts may also grant interim measures while the constitution of the arbitral tribunal is still pending. When the interim relief is granted by a local court, the Code of Civil Procedure shall apply.
Except otherwise agreed by the parties, arbitral tribunals may decree interim measures considered necessary as to the scope of the dispute as long as: a) there is a serious probability of existence of the right invoked by the petitioner and there is a sufficiently justified fear of sustaining damages; and, b) the damages arising to the other party resulting from the determination of the interim measure do not considerably exceed the damages that the petitioner wishes to avoid (arts. 20 (1) and 21 (1) LAV). Arbitral tribunals may also issue preliminary orders without the preliminary hearing of the other party in order to not frustrate the goal of the requested interim measure.
There are also specific interim measures foreseen in the civil procedure law (such as provisional restitution of possession, suspension of corporate deliberations, attachment, suspension of construction works, etc.). Local courts may issue such measures pending the constitution of the arbitral tribunal.
Arbitrators can grant interim relief if it is clear that the parties have agreed that interim measures are covered by the arbitration clause or the arbitration agreement. Arbitrators are entitled to order provisional or protective measures, such as conservatory measures to preserve evidence or prevent irreparable harm.
The arbitral tribunal may order, upon request of one of the parties, interim measures which must be enforced by an order of the president of the District Court. Unless otherwise agreed by the parties, the arbitral tribunal can request a warranty deposit for costs. Interim measures issued by arbitrators are enforceable by the District Court.
Disputing parties in Swiss arbitration proceedings can, just as in ordinary state court litigation, benefit from the entire array of interim relief available under Swiss domestic law.
Pursuant to art. 262 CPC any interim measure suitable to prevent the imminent harm may be ordered. In particular, an injunction, an order to remedy an unlawful situation, an order to a register authority or to a third party, performance in kind, and the payment of a sum of money in the cases provided by law may be applied for by arbitrating parties.
In contrast to interim relief from state courts, in case of interim relief requested from the arbitral tribunal, even interim relief not known under Swiss law may theoretically be granted.
Swiss law allows for an arbitral tribunal to grant interim relief unless the parties to an arbitration agreement agreed otherwise (art. 183 para 1 PILA and art. 374 para 1 CPC). State courts' assistance in connection with interim relief is, however, of critical importance based on the following grounds:
a. If not complied with voluntarily by the relevant party, interim relief issued by an arbitral tribunal requires the involvement of the state courts to be enforced.
b. The arbitral tribunal has no competence and thus no basis to issue binding and enforceable orders against third parties, e.g. banks in case of freezing orders, since the latter will normally not be part of the arbitration agreement.
c. As interim relief is generally connected with matters of urgency it will often need to be given ex parte, without hearing the counterparty. In contrast to state courts and unless the specific applicable institutional rules of the arbitration expressly provides otherwise (as the Swiss Rules do – in contrast to e.g. the ICC Rules), arbitral tribunals are likely not grant interim relief ex parte, but only once the counterparty is heard.
In order for an arbitral tribunal to be able to grant interim relief, it must be established and in a position to deal with the motion for interim relief. Various institutional arbitration rules (including the Swiss Rules and the ICC Rules) provide for the possibility to call on a so called emergency arbitrator to grant interim relief even before the arbitral tribunal has been formally established in accordance with the applicable institutional rules.
State courts can be called on to grant interim relief before constitution of the arbitral tribunal. If the requested relief is granted, the party submitting the motion will be required to commence arbitral proceedings within 10 days following receipt of the court’s order for interim relief.
Germany has not adopted the 2006 amendments to the UNCITRAL Model Law (see question 4), and, consequently, German arbitration law does not in detail address interim measures and their enforcement. Still, the ZPO provides that the parties may request interim relief either from the competent state court (sections 1026 and 1033 ZPO) or from the tribunal (section 1041 ZPO).
The state courts may either grant an attachment order (sections 916-934 ZPO) or order an interim injunction (sections 935-945 ZPO). Interim measures ordered by the tribunal will not be automatically enforceable but require enforcement to be granted by the competent state court.
German courts will not issue anti-suit injunctions. It is highly disputed whether tribunals can issue anti-suit injunctions without the agreement of the parties. The relevant provision (section 1041 (1) ZPO) only provides that the tribunal may order such measures it considers necessary in respect of the subject-matter of the dispute.
An arbitral tribunal enjoys discretion in ordering the interim measures. As to the power of local courts, the Arbitration Act in its current wording provides for merely the general rule that it is not incompatible with an arbitration agreement for a party to request, before or during arbitral proceedings, from a court an interim measure of protection and for a court to grant such measure. Due to an inconsistency in the CPC local courts do not possess the power to grant any interim measure in support of arbitration. However, the Draft Law largely fills this gap providing for the rights of local courts to order interim measures in support of arbitration, including the freeze of assets and prohibition to exercise certain actions.
Under the Panama Arbitration Law, an arbitration tribunal is permitted to award two (2) types of preliminary or interim relief: interim measures and preliminary orders.
In Panama, interim measures are temporary measures that are issued whether in the form of an award or in another form by which, at any time prior to the issuance of the final arbitral award, the arbitration tribunal orders a party to:
(a) maintain or restore the status quo pending determination of the dispute;
(b) 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;
(c) provide a means of preserving assets from which a subsequent award may be satisfied; or
(d) preserve evidence that may be relevant and material to the resolution of the dispute.
Contrary to interim measures that are issued after the tribunal has heard all interested parties, preliminary orders in Panama are requested and decided ex parte (without notice to any other party). Preliminary orders are orders whereby an arbitration tribunal directs a party not to frustrate the purpose of a requested interim measure. The Panama Arbitration Law provides that preliminary orders shall expire after twenty (20) working days from the date on which they are issued by the arbitration tribunal. However, the arbitration tribunal may issue an interim measure adopting or modifying the preliminary order after the party against whom the preliminary order is directed has been given notice and an opportunity to present its case.
Moreover, local courts may issue interim measures in support of local or foreign arbitration proceedings either pending the constitution of the tribunal or after its constitution.
A party may apply to the UAE Courts for a precautionary attachment of movable property, pursuant to Article 252 of the UAE CPC, to secure its debt.
The constitution of an Arbitral Tribunal is not the key event in institutional arbitrations for such an application to be made. Rather, it is the commencement of arbitral proceedings, in any form this can be documented. For example, arbitral proceedings are commenced pursuant to Article 4 of the DIAC Rules with the filing of a Request for Arbitration.
The Arbitral Tribunal can also be asked by a party to suspend proceedings, pursuant to article 209 of UAE CPC, should criminal proceedings have been taken in relation to the dispute that is arbitrated.
The DIAC Rules (Article 31) also provide for an Arbitral Tribunal to issue provisional orders or other interim / conservatory measures, including injunctions, at the request of a party.
Interim measures may however be subject to the requesting party furnishing appropriate security.
UAE Off-Shore Jurisdictions
DIFC Arbitration Law
Unless agreed otherwise, an Arbitral Tribunal has the power to order interim measures at the request of a party pursuant to Article 24 of the DIFC Arbitration Law.
With the written permission of the Arbitral Tribunal, the party in whose favour the order was granted may apply to the DIFC Court of First Instance for the enforcement of the order.
The party requesting interim measures may however be liable to ‘any costs or damages caused by the measure to any other party if the Arbitral Tribunal later determines that…the measure should not have been granted’’.
The DIFC-LCIA Arbitration Rules (Article 25) provide that an Arbitral Tribunal may, upon application of any party and ‘after giving all other parties a reasonable opportunity to respond to such application’, apply various interim and conservative measures.
The Arbitral Tribunal is also empowered, subject to the above, to order any claiming party to provide security for legal and arbitration costs.
A tribunal may grant interim measures to (i) maintain or restore the status quo pending determination of the dispute, (ii) take action that would prevent, or refrain from taking action that is likely to cause current imminent harm or prejudice to the arbitral process, (iii) provide means or preserving assets out of which a subsequent award may be satisfied or (iv) preserve evidence that may be relevant and material to the resolution of the dispute. However, the tribunal’s decision on interim measures is not enforceable.
A court can grant interim measures prior to or during the arbitration proceedings, including sequestration of assets. Such order by the court is enforceable in at least Sweden.
Unless otherwise agreed by the parties, an arbitral tribunal is entitled to issue interim measures connected with the subject matter of the dispute (article 23 of the SAA). Such interim measures are enforceable before any Court, and the same provisions relating to the setting aside and enforcement of awards apply.
The interim measures that may be granted by an arbitrator are those generally accepted in Spain, the purpose of which is to secure the potential future enforcement of any award issued. These may include attachments and freezing orders, deposits, registrations in public registries, orders to provisionally cease if deploying any specific conduct, and, in general, any relief which is suitable to protect the effectiveness of the future enforcement of the award.
Under Spanish law, interim relief may be requested either before the ordinary Courts or before the arbitrators (if the parties did not expressly agree to prevent arbitrators from doing so). If the interim relief is requested before the ordinary Courts the applicant must provide evidence about the existence of the arbitration agreement and the existence of the arbitration process.
Petitions for interim measures will ordinarily be applied before ordinary Courts when the requesting party intends to enforce these measures against third parties that are not bound by the arbitration agreement.
Applications of a party before a Court to grant interim relief in support of arbitration will have no negative effect on the jurisdiction of the arbitral tribunal.
Both courts and arbitral tribunals are entitled to grant interim measures to support arbitration proceedings. There is, however, a great controversy with respect to enforcement of interim measures rendered by the arbitral tribunal, because the law does not provide a mechanism on enforcement of such interim measures by the court. This severely limits the effectiveness of interim measures rendered by the arbitral tribunal.
As for the types of interim measures which can be granted, provisions governing enforcement and security provide a wide variety of such measures (these include, among other, freezing of assets, ban of disposal over particular property of the debtor, seizure of debtor’s cash or securities and their sequestration before the court, instructing banks to sequestrate the monetary means of the debtor before the court, instructing the central securities depository and clearing house to inscribe a ban on disposal over shares owned by the debtor, banning the debtor’s debtor to settle its debts towards the debtor, etc).
The following, among others, are the interim measures of protection that a court may grant:
a. Preliminary injunction directed against a party to arbitration;
b. Preliminary attachment against property or garnishment of funds in the custody of a bank or a third person;
c. Appointment of a receiver;
d. Detention, preservation, delivery or inspection of property; or,
e. Assistance in the enforcement of an interim measure of protection granted by the arbitral tribunal, which the latter cannot enforce effectively.
Section 28(a) of the ADR Act provides that after the constitution of the arbitral tribunal and during arbitral proceedings, a request for an interim measure of protection or modification of that measure can be made to the arbitral tribunal. A petition for interim measure of protection can be made with the court after the constitution of the arbitral tribunal and at any time during the arbitral proceedings, but only to the extent that the arbitral tribunal has no power to act or is unable to act effectively.
The court can only issue interim remedies in the following instances:
- Before arbitration is commenced.
- After arbitration is commenced, but before the constitution of the arbitral tribunal.
- After the constitution of the arbitral tribunal and at any time during arbitral proceedings but, at this stage, only to the extent that the arbitral tribunal has no power to act or is unable to act effectively.
Under the Arbitration & Conciliation Act, 1996, there are two fold of interim measure available i.e. one by the Hon’ble Court under section 9 of the Arbitration and Conciliation Act, 1996 and other by the Tribunal under section 17 of the Arbitration and Conciliation Act, 1996.
As per the new amendment, a party may seek for interim measures before the Court before the commencement of the arbitration. However, after that, it is mandatory for the tribunal to be constituted within 90 days from the date of such order passed by the Court.
The LAM provides that arbitration courts may order interim or precautionary measures pursuant to the rules of the Organic General Code of Procedures or other applicable rules, to safeguard the subject-matter of the arbitral proceedings or to guarantee the results thereof. The arbitration court may require a guarantee or bond from the party requesting the measure in order to cover the cost of the measure and payment of damages to the counterparty should the award rule that the claim is groundless. The above-mentioned Code provides the following interim or precautionary measures: seizure or withholding of the thing subject of the litigation or the goods securing the credit, and the court may also: a) prohibit the transfer of ownership of goods or real property of the debtor when the party requesting the measure submits evidence of the debt and the debtor does not have other goods or property to secure the debt, and, b) issue an order preventing the debtor from leaving the country. The LAM establishes that if the arbitration agreement does not provide for precautionary measures, either party may request local courts to issue precautionary measures.
The tribunal can issue interim conservatory orders only when this is specifically agreed by the parties, failing which only the competent court can issue such orders. The tribunal generally has a broad discretion in terms of procedures. The tribunal can order security for interim measures. Security for costs is not common, but in theory it can be ordered. Generally, a claimant must cover its costs. If the respondent does not pay its share of the costs, the claimant must also pay this amount, subject to a claim for recovery in the final award.
Unless otherwise agreed between the parties, an arbitral tribunal has the power to order the parties to undertake certain measures, such as preserving assets or the production of evidence. An order to this effect, however, is not enforceable. Failure to comply with an order made by the tribunal, may influence on the assessment of the evidence. The parties may ask the ordinary courts to issue an order for interim relief. Such court order will be enforceable.
The arbitral tribunal may request the ordinary courts to take depositions from witnesses and to make an order for the production of documentary evidence. The arbitrators have the right to attend the court hearing when the witnesses are examined, and they may ask questions.
Unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a party, order any party to take such interim measures of protection as the arbitral tribunal may consider necessary in respect of the subject-matter of the dispute.
A party to the arbitration may request a national court to issue interim measures before or during the arbitral proceedings, thus regardless of whether the arbitral tribunal has been constituted or not.
Based on Section 9 of the ICA Law, Cypriot Courts will issue preservative measures upon an application of a party to the arbitration, any time before or during the initiation of the arbitral proceedings. Therefore such measures can be issued even before the constitution of the tribunal however evidence thereafter will be required to be presented to the Court which shows that the arbitration proceedings has indeed been initiated. Usually such measures will relate to the preservation of the subject matter of the dispute or to the preservation of evidence.
Under Cap. 4, the Court may issue interim measures related to security for costs, disclosure of documents, the taking of evidence under oath, the preservation or temporary keep or sale of goods which are the subject matter of the arbitration, the securing of the amount of the dispute, the preservation or inspection of property which is the subject matter of the arbitration, other interim orders or even the appointment of a receiver.
Until the arbitral tribunal is constituted, the French courts have the power to order any measures relating to the taking of evidence as well as other provisional or conservatory measures (Article 1449, CCP). The French courts will decline to use these powers only if the parties expressly excluded recourse to these measures or if they are otherwise forbidden in the applicable arbitral rules.
A party seeking a measure to preserve or establish evidence must apply to the President of the Tribunal de grande instance or of the Commercial Court (Tribunal de Commerce), who will rule on the application through expedited proceedings (sur requête or en référé). If the matter is urgent, other provisional or conservatory measures can also be applied for and ordered through expedited proceedings (Article 1449, CCP).
Once the arbitral tribunal is constituted, the power to order conservatory or interim measures shifts to the arbitral tribunal. The arbitral tribunal can order any type of provisional or preliminary measures that it deems appropriate. It can also sanction noncompliance by, for example, making its orders subject to penalties. Under the previous legal framework, the parties could still ask the French courts to order urgent interim measures. By contrast, the 2011 Decree seems to reserve this jurisdiction to the arbitral tribunal. However, the French courts retain exclusive jurisdiction to order conservatory attachments or judicial security, as well as to ensure satisfaction of a future award (Article 1468, CCP). In addition, recourse to a judge may be necessary to enforce any measure ordered by the arbitral tribunal that is not voluntarily complied with.
Pursuant to Article 818 CCP, arbitral tribunals cannot grant provisional measures, unless the law provides otherwise. Therefore, parties may only seek the assistance of the national courts, which have the power to issue interim relief before and after the constitution of the arbitral tribunal.
Interim measures that are available include measures for the conservation of goods or preservation of properties forming the subject-matter of the dispute and for the security of costs (section 13 of the ACA). The High Courts have powers to issue interim measures pending the constitution of an arbitral tribunal. Further, Article 26 of the Rules empowers a court approached by a party to arbitral proceedings to grant interim relief and such a request will not be deemed incompatible with the agreement to arbitrate, or as a waiver of that agreement.
Interim measures that are available include measures for the conservation of goods or preservation of properties forming the subject-matter of the dispute and for the security of costs (section 13 of the ACA). The High Courts have powers to issue interim measures pending the constitution of an arbitral tribunal. Further, Article 26 of the Arbitration Rules empowers a court approached by a party to arbitral proceedings to grant interim relief and such a request will not be deemed incompatible with the agreement to arbitrate, or as a waiver of that agreement.
Under the Austrian Code of Civil Procedure, both domestic courts (particularly relevant where the tribunal is still being constituted) and arbitral tribunals may issue interim or protective measures upon request by a party. There is no closed catalogue of what such measure may consist of. However, the endangered party is to demonstrate irreparable harm or significant impediment of claims and the sought remedy must be appropriate relief. Moreover, if it shall be enforced through Austrian courts (arbitral tribunals have no coercive powers), the measure(s) should be comparable to those known to the Austrian court system (such as taking money or chattel into custody, prohibition to dispose of claims, etc).
Most arbitral institutional rules empower a tribunal to issue interim measures. These include injunctions, preservation of evidence or assets, security for costs and temporary restraining orders. These rules, however, require the arbitrators to provide both parties an opportunity to be heard and do not permit the type of ex parte restraining orders granted by U.S. courts. Increasingly, institutions have amended their rules to provide for emergency arbitrator procedures, which enable an interim arbitrator to grant such relief before the tribunal is constituted.
Federal and state courts have authority to issue interim measures ─ and, where appropriate, do issue such measures ─ pending constitution of the arbitral tribunal. (Although less common, courts sometime issue such measures even after constitution of the tribunal, provided that doing so does not undermine the arbitral process.) As a general matter, a party may seek interim relief from a court without waiving its right to insist that its claims be arbitrated. U.S. courts are empowered to issue preliminary injunctions and attachments of property as well as ex parte temporary restraining orders. Despite this broad authority, in practice, U.S. courts typically will deny applications for preliminary relief which could have been submitted to the arbitrator(s).
In domestic arbitration, arbitral tribunals are prohibited from granting interim or conservative measures of any kind pursuant to article 889 para. 1 GrCCP. Hence the parties to the arbitration agreement must pursue State Court litigation in order to seek interim relief.
In international commercial arbitral proceedings having their seat in Greece, article 17 L. 2735/1999 provides that, unless otherwise agreed by the parties, the arbitral tribunal upon request may grant the interim measures that it deems necessary in relation to the subject matter of the dispute. The arbitral tribunal is not obliged to order only the specific interim or conservative measures which are explicitly provided for under the respective provisions of the GrCCP. As already noted (see answer to Question 4) the authority of the arbitral tribunal to grant interim relief is seriously impeded by the fact that the interim or conservative measures granted must be implemented – enforced by virtue of a State Court decision on a second stage upon request. This means that compliance with the measures ordered by the arbitral tribunal at the first stage i.e. prior to State Court intervention is essentially voluntary. That being said, the parties to the arbitral proceedings for obvious reasons tend to comply with the ordered measures.
Article 17 must be read in conjunction with article 9 L. 2735/1999 which provides that the arbitration agreement does not prohibit the parties from resorting to State Courts and request interim relief before or during arbitral proceedings. As already noted above (see answer to Question 1) article 9 is applicable to any and all international commercial arbitral proceedings regardless of the place of arbitration. In light of the above, in international commercial arbitral proceedings both the arbitral tribunals as well as State Courts are vested with the authority to grant interim relief. According to the prevailing view, any conflict between the two jurisdictions shall be resolved in favor of the forum in which the request for interim relief was firstly filed. Said authority of State Courts is obviously of essence, given the absence of emergency arbitrator provisions in Greek law, at the phase while the constitution of the arbitral tribunal is still pending.
The issue of the arbitrator's authority to provide an interim relief in an arbitral proceeding held before him has not received a clear answer under the Israel judicial system so far. The common opinion is that as a rule, the arbitrator is not authorized to provide temporary reliefs under an arbitral proceeding held before it. However, Section 16 of the Arbitration Law confers upon the court powers to grant a temporary reliefs with respect to an action brought before it as well as with respect to an arbitral proceeding in the following matters:
- The summoning of witnesses and the determination of their remuneration and expenses.
- The adoption of coercive and punitive measures against a witness who has not answered an arbitrator's or the court's summons, or who refused to testify.
- The taking of evidence forthwith or out of the jurisdiction.
- Substituted service of notices or documents on the litigants.
- The attachment of property, the prevention of departure from Israel, security for the production of property, the appointment of a receiver, a mandatory injunction and a restraining injunction.
The court may exercise these powers not only in connection with local arbitration in Israel but also for the purpose of assisting foreign arbitral proceedings, whether these are ongoing foreign arbitral proceedings or such that have yet to be commenced (Section 39A of the Arbitration Law).
The 1996 Act allows the parties to agree on the powers exercisable by the tribunal for the purposes of and in relation to the proceedings (s.38(1)). If there is no agreement, sections 38 and 44 outlines the various measures a tribunal and court are permitted to make respectively.
Powers are provided to the local courts in s.44 pending the constitution of the tribunal to support the arbitration process including the preservation of evidence or assets.
During the arbitration proceedings the arbitral tribunal may grant, at the parties’ request, protective measures and interim relief, as well as acknowledge matters of fact. This provision is similar both in the Civil Procedure Code and in the rules of the main arbitration institution, however, neither defines, except for protective measures, what types of relief can be awarded on a provisional basis. However, taking into account the general civil procedure rules, as an interim remedy, the interested party may apply for freezing measures on goods, provisional measures or conservatory measures regarding evidence (acknowledgement of matters of fact, that is).
The local tribunal whose jurisdiction covers the seat of the arbitration may grant protective measures and interim relief, at the parties’ request, before or during the arbitral proceedings. Since a similar order for protective measures or interim relief issued by the arbitral tribunal is not enforceable under Romanian law, the courts play a significant role in obtaining such measures and are preferred by the parties for the reason that the courts issue enforceable decisions.