UK: Interim And Conservatory Measures In International Arbitration

Last Updated: 12 June 2008
Article by Aidan Casey

Today, the availability of interim and conservatory measures of relief is vital to both the protection of the arbitral process and the enforcement of the final award. As such, four broad varieties of interim measures exist, those (a) to prevent irreparable harm; (b) to preserve evidence; (c) to facilitate the enforcement of the award; and (d) aimed at facilitating the production of evidence.

Modern arbitration laws, international conventions and institutional rules increasingly recognise that courts and arbitral tribunals possess concurrent jurisdiction to order provisional or protective measures (in a departure from the principle espoused in McCreary & Tire & Rubber Co. v. CEAT S.p.A 501 F 2d (3d Cir. 1974)). Indeed, the privity of arbitration agreements makes concurrent jurisdiction a necessity. Arbitrators will lack imperium and recourse to protective measures will, at times, necessarily lie with the court of the seat applying the lex arbitri.

However, to the busy practitioner, it is not always straightforward to determine when an application should be made directly to the competent court or, at least in the first instance, to the arbitration tribunal. It is increasingly the case that the answer will rest upon two principal factors.

(1) Institutional Rules

Despite many commonalities between the major institutional Rules, there remain substantive differences in the interim powers each grants to the tribunal.

The wording of Article 26 of the UNCITRAL Rules, for example, refers only to "measures & necessary in respect of the subject-matter of the dispute". Its narrow construction appears to prevent tribunals from making any provisional or conservatory measure properly required in the circumstances, and has been the subject of fierce debate in recent years. The wording, though, is not surprising when one considers that the UNCITRAL Rules themselves grew out of an expectation that arbitrations would concern international trade; hence the measures related to "the conservation of & goods" in Article 26.

However, to emphasise the importance of choosing the most appropriate Rules, both the Model Law and the ICC Rules speak more generally. Article 17 of the Model Law refers more widely to "interim measure[s] of protection & in respect of the subject-matter of the dispute", whilst Article 23 of the ICC Rules allows the tribunal to "order any interim or conservatory measure it deems appropriate".

But, even between the ICC Rules and the Model Law there exist differences. The ICC Rules do not require that the measures concern "the subjectmatter of the dispute". Thus, provided that there is a sufficient connection with the arbitration, the arbitral tribunal's authority may extend to other matters of an interim or conservatory nature.

(2) Lex Arbitri

In any case, even where institutional Rules are adopted, the mandatory laws of the seat will apply. These laws customarily delineate the powers of the tribunal and the competent court. The English Arbitration Act 1996, for instance, acknowledges at s.38 the tribunal's ability to bind only parties appearing before it, but nevertheless allows it this power. It further supports the tribunal's position at s.44, by outlining when a court will intervene, limiting involvement to "the extent that the arbitral tribunal & has no power or is unable for the time being to act effectively".

Whilst most practitioners will appreciate the enlightened approach of the 1996 Act, the same cannot be said for the mandatory laws of all countries. For example, under Article 818 of the Italian Code of Civil Procedure, "[t]he arbitrators may not grant attachment or other interim measures of protection". Elsewhere in Europe, the Greek (Article 685) and Austrian (Article 589) Codes of Civil Procedure are similarly outmoded. Indeed, the same was true for Switzerland as recently as 1989.

Where applications to the competent court are unavoidable, a further issue to consider is the domestic pressures (often political) which are exerted upon local courts. The effect of this pressure is no more pronounced than in cases where one of the parties is a state entity appearing before its local court. The facts of a line of cases, including Himpurna California Energy Ltd. v. PLN (25 Y.B. COM. ARB. 13 (2000)), are indicative of the problems foreign parties can encounter in appearing before some local courts.

Conclusion

Given the importance of interim and conservatory measures, it seems clear that parties and those advising them must be aware of the impact of their choices (a propos institutional Rules, place of arbitration and applicable law) on (1) the powers that the tribunal will have to order protective measures prior to rendering a final award; and (2) the extent to which the arbitral process will be insulated from external "supervision".

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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