The importance of interim and conservatory measures ordered by arbitrators has been widely recognized in international arbitration, since the important sets of rules regulating arbitrations set forth provisions enabling the arbitral tribunal to rule on these measures. Interim and conservatory measures are more commonly used in practice, with the adoption of fast-track proceedings by the important set of rules regulating arbitration. As there is a possibility that the parties will not abide by these measures in all of the cases, there is an emerging need to enforce these measures outside of the seat of the arbitration.
The issues arising out of enforcement of these measures will be analyzed in this article.
The parties to an arbitration proceeding may request interim and conservatory measures from the arbitrators, as well as from the national courts. Despite the fact that arbitrators lack the powers to enforce such measures, there are advantages to request these measures from the arbitrators. One of these advantages may be the fact that arbitrators are in a better position than the national judges, as they can better evaluate the legal issues related to the dispute to be resolved through arbitration. Additionally, the request for interim and conservatory measures may be denied by the national judges, based on the view that the requests are related to the substance of the cases.
As this need to request interim and conservatory measures from arbitrators is being recognized, the most important sets of rules pertaining to arbitral proceedings have recognized the possibility to request these measures from arbitrators, as well as a different fast-track proceeding to obtain such measures. The Emergency Arbitrator Rules that are adopted by the 2012 ICC Rules of Arbitration are an example for such fast-track proceedings.
In most cases, the parties will most likely follow arbitrators' orders as they relate to interim measures, since the arbitrators may look upon the parties unfavorably if they were not to do so, during the course of the ongoing proceedings. On the other hand, there may be cases in which the non-complying party may disburse the assets, or may aggravate the dispute, in order to place a heavier burden on the other party, or may render the arbitration proceedings ineffectual. In such cases, the enforceability becomes necessary for effective protection of rights1.
Enforcement pursuant to New York Convention
The decisions made by arbitrators that order interim or conservatory measures may be subject to enforcement requests pursuant to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards ("New York Convention"). At this point, it should be emphasized that the text of the New York Convention does not address the issue of its application to interim and conservatory measures that are ordered by arbitrators, and it is reported that the interim measures, even in the form of awards, are not usually enforceable under the New York Convention.2
The New York Convention, under Article 5/1/e, sets forth that the request for recognition or enforcement of the award may be refused if the award is not binding on the parties. The fact that the interim or conservatory measures ordered by arbitrators may be amended or rescinded by the arbitrators3 may pose an obstacle for enforcement under the New York Convention.
However, it should also be emphasized that the enforceability under New York Convention is controversial, both amongst commentators, as well as amongst state courts. For instance, there is a "pragmatic approach" taken by some courts in the United States, based on the fact that these measures are severable from the merits, and require affirmative action, and they would become a moot exercise of the arbitrators' powers, if they were not enforced.4
On the other hand, the qualification of the measures ordered by arbitrators may not be "an award," but "an order"; however, the qualification of the measure ordered should not be determinative of its enforceability, and state courts are not bound by this characterization.5
Lack of Multilateral Treaties
It should be emphasized that there is no multilateral treaty that specifically regulates the enforcement of arbitrator-granted interim and conservatory measures. This means that the matter would be governed by bilateral treaties, if any, as well as national laws regulating the enforcement of such measures.
It is reported that there are bilateral treaties which permit the enforcement of provisional measures.6
Possibility of Enforcement pursuant to National Laws
National laws of some states regulate court intervention for the enforcement of interim and conservatory measures ordered by arbitrators, when the seat of arbitration is within these states.7 This intervention may be in the form of direct enforcement, or some executory assistance from the national courts. On the other hand, enforcement may be necessary outside of the seat of arbitration, as well. Considering the fact that the seats of arbitration are chosen from amongst the venues that are neutral to both parties, the decision will require enforcement outside the seat of the arbitration.
UNCITRAL Model Law on International Commercial Arbitration
With the amendments made in 2006, the UNCITRAL Model Law on International Commercial Arbitration ("Model Law") covers the enforcement of interim measures, under Article 17 H. The relevant article sets forth that an interim measure issued by an arbitral tribunal shall be recognized as binding and, unless otherwise provided by the arbitral tribunal, enforced upon application to the competent court, irrespective of the country in which it was issued, subject to the provisions of Article 17 I.8
Additionally, the Model Law, under Article 17 I, provides for the grounds to refuse recognition or enforcement of interim measures. The Model Law also emphasizes that these conditions are intended to limit the circumstances in which national courts may refuse to enforce an interim measure, and the states may adopt fewer circumstances in which enforcement may be refused by the national courts.
The enforcement of arbitrator-granted interim or conservatory measures is worth analyzing, based on the absence of harmonized solutions on the issue. The application of the New York Convention for the enforcement of these measures is controversial, both among national courts and commentators. The Model Law suggests that states adopt national law provisions, which would permit the enforcement of these measures by national courts. Even though there is no harmonized solution for the problem of arbitrators' lack of coercive powers, the parties tend to abide by the measures, since it would give a negative message to the arbitrators when a decision on the merits is pending.
1 Ali Yeşilırmak, Provisional Measures in International Commercial Arbitration (Dissertation submitted to Queen Mary College, University of London, for the degree of doctor of philosophy), London 2003, p. 314 ("Yeşilırmak").
2 Jason Fry, Simon Greenberg, Francesca Mazza, The Secretariat's Guide to ICC Arbitration, ICC Publication 729 (Paris 2012), p. 291 ("Secretariat's Guide").
3 For instance, pursuant to Art. 29/3 of the ICC Arbitration Rules, the Arbitral Tribunal may modify, terminate or annul the order or any modification thereto made by the emergency arbitrator. Additionally, pursuant to Art. 6/8 of Appendix V of ICC Arbitration Rules, upon a reasoned request by a party made prior to the transmission of the file to the arbitral tribunal, pursuant to Art.16 of the Rules, the emergency arbitrator may modify, terminate or annul the Order.
4 Yeşilırmak, p. 335, 338.
5 Secretariat's Guide, p.291.
6 It is reported that the arbitral provisional measures are made enforceable through an annex to a tripartite treaty between Azerbaijan, Georgia and Turkey. Please see Yeşilırmak, p. 331.
7 For detailed information about these states, please see Yeşilırmak, p. 317-330.
8 UNCITRAL Model Law on International Commercial Arbitration, with amendments as adopted in 2006. Source: http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/07-86998_Ebook.pdf.
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