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When should the court step in?

There will be circumstances where the tribunal’s powers are not sufficiently wide or where a coercive order is required.

Although the arbitral tribunal has the primary power to grant relief by way of interim measure, there will be circumstances where the tribunal’s powers are not sufficiently wide or where a coercive order is required. Depending on the nature of a given case and the law of the seat in question, in the following circumstances the national court will be needed by the party seeking the imposition of an interim measure:

  1. Where the arbitral tribunal has not been provided with the necessary powers because of constraints in the law of the seat. However, as more and more jurisdictions have become arbitration-friendly, legislation has been amended or replaced and this is now not an issue that is likely to arise with any regularity in practice.
  2. Where the arbitral tribunal has not been established, but a party seeks relief at an early stage. This is a situation most likely to arise where a party has grounds to believe that evidence may not be preserved or assets may be dissipated. However, even in these circumstances, the arbitration framework itself has now provided an answer. The institutional rules of the major arbitral institutions provide for the appointment of an emergency arbitrator. An emergency arbitrator has the power to order an interim measure, but will take no further part in the arbitral proceedings themselves. The emergency arbitrator framework is not, however, a complete answer. Not every jurisdiction has legislation that allows for the enforcement by the national court of an order made by an emergency arbitrator. In those circumstances, in advance of the establishment of the tribunal, a party may decide that the preferable route is to go straight to the national court.
  3. On the issue of enforcement, Hong Kong, for instance, has a provision in its Arbitration Ordinance (CAP 609) that gives the court the power to enforce an interim measure granted by an emergency arbitrator, whether that order is issued in Hong Kong or in another jurisdiction.
  4. The national courts in some jurisdictions are able to grant interim relief in support of an arbitration that is seated not within that jurisdiction, but in another state. Although, of course, the usual route for seeking interim relief in support of arbitration will be to the national court of the jurisdiction of the seat, those jurisdictions that do allow for support of a foreign-seated arbitration will do so where it is appropriate. An example is the set of powers granted in s 44 of the United Kingdom Arbitration Act 1996 to assist a foreign arbitration, which were the subject of a detailed examination in Company 1 v Company 2 [2017] EWHC 2319 (QB).
  5. A non-party cannot be bound by an interim measure ordered by an arbitral tribunal (see art 17(2) of the Model Law). This is, therefore, a circumstance where the support of the national court may be required. An obvious example might be where a bank or other financial institution is holding the assets of a party, or where a third party is in possession of evidence that is likely to be destroyed or is not subject to voluntary steps being taken for preservation.
  6. Where an order is sought in a foreign jurisdiction (that is, not in the state of the seat of the arbitration). As seen in the example of the Company 1 case, some jurisdictions will support a foreign-seated arbitration in this regard. It should be noted that some national arbitration laws describe interim measures as awards. This means that there may be scope (depending on the states concerned and the circumstances of the case) for enforcement of that award to be sought in a third state where, for instance, evidence or assets are located, albeit that it is not likely to be a frequently occurring scenario. More often, the party seeking the relief is likely to wish to apply straightaway to the national court of the foreign jurisdiction where the evidence or the assets are located, provided that the jurisdiction in question is itself able to issue such relief in support of a foreign-seated arbitration.
  7. Although, as indicated above, the Model Law provides for a limited and clearly defined ex parte route before the arbitral tribunal where an interim measure may be sought, most current national laws and most institutional rules have not yet followed suit. Therefore, more frequently, where a measure is sought ex parte (typically where evidence is at risk of being destroyed or assets dissipated), then recourse to the national court is likely to be needed.
  8. Where it is necessary to compel the attendance of a witness: as already indicated, a national court may support the arbitration process in this way, given that an arbitral tribunal will not possess the power to compel. This is reflected by the express provision in art 27 of the Model Law.
  9. In a similar way, where evidence needs to be preserved: the need for preservation may be apparent before the arbitral tribunal has been established or may only emerge thereafter. In any event, only the court is able to issue an injunction and to impose penal sanctions for breach. A tribunal can, of course, make an order for the preservation of evidence, but does not have the power to sanction a breach.
  10. Where documents are in the hands of a third party and are required to be produced, especially where that party needs to be compelled to comply with an order for production.
  11. Where a freezing or restraint order is required to prevent asset dissipation.

An example from within the ASEAN +6 region of the powers of the court to render assistance by ordering interim measures is that set out in s 12A of Singapore’s International Arbitration Act. The court in Singapore may be asked to assist by making a freezing order, granting an injunction, securing the amount that is in dispute between the parties or preserving and ordering the interim custody of a piece of evidence. Similarly, s 11 of Malaysia’s Arbitration Act gives the power to the High Court to grant interim relief by way of an order before or during an arbitration (and whether or not the arbitration is seated in Malaysia) in order to maintain or restore the status quo, prevent a person taking action that would be likely to cause current or imminent harm or prejudice to the arbitral process, preserve assets out of which an award can later be satisfied, preserve evidence that may be relevant to material to the resolution of the dispute, and provide security for the costs of the dispute.

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International Arbitration: Process and Procedure

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