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This chapter is from AAA Handbook on International Arbitration & ADR. © JurisNet, LLC 2010 www.arbitrationlaw.com 89 CHAPTER 8 ARBITRAL INTERIM MEASURES: FACT OR FICTION? Raymond J. Werbicki I. Introduction The practical importance of interim measures of protection is well understood by litigation and arbitration practitioners alike. From, and in some cases even before, the outset of court or arbitration proceedings, problems may arise that can have a major, at times determinative, effect on the final outcome. A classic example is when existing evidence that would influence the result may be destroyed or “lost.” Another example is when there is a risk that identifiable assets that could satisfy a claim may be placed out of reach and therefore will not be available if the claim were to succeed. In all civilized countries, courts have developed detailed procedures under which parties to their proceedings may apply for, and in appropriate circumstances, obtain a variety of interim measures. For example, in England, a party to an action in the courts may obtain interim measures, including orders to freeze assets, require interim payments, search and seize property in the hands of a party, preserve documents and other forms of evidence, restrain or compel particular acts or conduct by a party, or provide security for costs. Such orders may be enforced against persons within the territorial jurisdiction of the court, by proceedings for attachment or contempt. 1 At first sight, the ability of parties to a commercial arbitration to obtain interim measures from the arbitral tribunal might not appear to pose any particular problem. For example, parties who agree to arbitrate under the International Arbitration Rules of the American Arbitration Raymond J. Werbicki is an international arbitration partner in the London office of the law firm Steptoe & Johnson. 1 English Civ. Proc. Rules, Pt. 25 and Rules of the Supreme Court Order 45.

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  • This chapter is from AAA Handbook on International Arbitration & ADR. JurisNet, LLC 2010 www.arbitrationlaw.com

    89

    CHAPTER 8 ARBITRAL INTERIM MEASURES:

    FACT OR FICTION? Raymond J. Werbicki

    I. Introduction

    The practical importance of interim measures of protection is well understood by litigation and arbitration practitioners alike. From, and in some cases even before, the outset of court or arbitration proceedings, problems may arise that can have a major, at times determinative, effect on the final outcome. A classic example is when existing evidence that would influence the result may be destroyed or lost. Another example is when there is a risk that identifiable assets that could satisfy a claim may be placed out of reach and therefore will not be available if the claim were to succeed.

    In all civilized countries, courts have developed detailed procedures under which parties to their proceedings may apply for, and in appropriate circumstances, obtain a variety of interim measures. For example, in England, a party to an action in the courts may obtain interim measures, including orders to freeze assets, require interim payments, search and seize property in the hands of a party, preserve documents and other forms of evidence, restrain or compel particular acts or conduct by a party, or provide security for costs. Such orders may be enforced against persons within the territorial jurisdiction of the court, by proceedings for attachment or contempt.1

    At first sight, the ability of parties to a commercial arbitration to obtain interim measures from the arbitral tribunal might not appear to pose any particular problem. For example, parties who agree to arbitrate under the International Arbitration Rules of the American Arbitration

    Raymond J. Werbicki is an international arbitration partner in the London office of

    the law firm Steptoe & Johnson. 1 English Civ. Proc. Rules, Pt. 25 and Rules of the Supreme Court Order 45.

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    Association (AAA international rules) have the benefit of Article 21, which authorizes the tribunal, at a partys request, to take whatever interim measures it deems necessary, including injunctive relief and measures for the protection or conservation of property. Article 21 also states that a request for interim measures from a court shall not be deemed incompatible with the agreement to arbitrate or a waiver of the right to arbitrate. On the face of it, this would seem to provide the best of both worlds: an option to obtain virtually any interim remedy from either an arbitral tribunal or a court. But does it?

    International arbitration practitioners are all too aware that the availability of arbitral interim measures is not nearly so simple. The conundrum is this: In certain circumstances, an arbitral tribunals ability to grant interim measures may be limited. If that is the case, a party to an international arbitration will have to seek interim measures in a national court that it may have wished to avoid when it agreed to arbitration. Further, if that happens, the court may decline to grant the measure requested, either because it concludes that seeking judicial interim relief is incompatible with the arbitration agreement or that it is undesirable for the court to interfere in the arbitration process.2

    The problem is not merely academic. In a 2002 survey of international arbitrators by the Global Center for Dispute Resolution Research, 64 respondents identified 50 separate arbitration cases in which interim relief was sought either to restrain or stay an activity, order specific performance, or provide security for costs.3 These figures are consistent with earlier reports to the United Nations Commission on International Trade Law (UNCITRAL), which indicated that parties are seeking interim measures in an increasing number of cases.4 The availability of arbitral interim measures is not a subject that can safely be ignored.

    2 See McCreary Tire & Rubber Co v. Seat SpA, 501 F.2d 1032; Channel Tunnel

    Group v. Balfour Beatty [1993] AC 334 (HL); NCC International AB v. Alliance Concrete Singapore Pte Ltd [2008] 5 LRC 187 (Singapore CA).

    3 See Mark Appel, Emergency and Interim Relief in International Arbitration, ADR Currents, vol. 7, no. 1 (Mar.-May 2002), p. 1.

    4 Report of the U. N. Secretary-General, Settlement of Commercial Disputes, A/CN.9/WG.II/WP.108 (Jan. 2000), at 104.

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    II. Limitations

    What may limit or prevent an arbitral tribunal from granting interim measures? The answers most frequently given to this question are:

    Interim measures may be urgently needed before the tribunal has been formed.

    Although the arbitrators may have the knowledge and expertise required to decide the substantive issues in dispute, they may not consider it part of their function or within their area of competence to issue emergency or provisional orders.

    Arbitral orders granting interim measures may be difficult to enforce.

    To be effective, interim measures may require the involvement of third parties over whom the arbitrators do not have jurisdiction.

    The tribunals jurisdiction to grant interim measures may be limited by the governing law of the arbitration.

    III. Formation of the Tribunal

    Under Article 6 of the AAA international rules, the parties have 45 days from the commencement of the arbitration to designate arbitrators or a procedure for appointing them, failing which they may be appointed by the AAA case administrator. As noted above, in some cases, interim measures may be needed before the arbitrators are appointed. The AAA has addressed this need by making available Optional Rules for Emergency Measures of Protection and, since May 1, 2006, emergency measures under Article 37 of the AAA international rules. Under these rules, a special arbitrator can be quickly appointed by the administrator for the purpose of hearing a request for interim relief before the tribunal is formed. To take advantage of the Optional Rules, the parties were specifically required to incorporate them into their agreement to arbitrate. It was not enough simply to agree to the AAA international rules because the AAA Optional Rules were entirely separate. However, for agreements to arbitrate under the AAA international rules entered into on or after May 1, 2006, Article 37 is available to the parties, unless they agree otherwise.5

    5 The International Chamber of Commerce (ICC) addresses this need for early relief

    in a broadly similar way in its optional Rules for a Pre-arbitral Reference Procedure. The

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    If included in the parties agreement to arbitrate, these rules will cover a number of situations in which interim relief may be required, but not all. They will not help in cases in which the need for interim relief is absolutely immediate, as at least a few days will be required to appoint an arbitrator, establish a schedule and obtain submissions from the parties. Nor will they be of assistance when the application is made without notice to the other party, as both the Optional Rules and Article 37 require that notice be given to all parties.

    IV. The Arbitrators Function

    Whether or not it is an arbitrators function to issue interim measures was addressed in The Kostas Melas.6 Mr. Justice Goff stated that arbitrators did not have power to order one party to pay a sum to another in an interim award that does not decide any matters in dispute. This statement has been interpreted as a finding that under earlier English Arbitration Acts, it was not an arbitrators function to make temporary or provisional financial arrangements between the parties to an arbitration.7 Critics of this view ask: If an arbitrator has jurisdiction to issue a final award affecting the financial arrangements between the parties, why should the arbitrators function not include the ability to make interim arrangements designed to ensure that the final award is just and effective? Surely the parties and arbitral institutions can choose arbitrators who have the necessary expertise to make appropriate interim orders, whether by agreeing procedures like the AAA Optional Rules or Article 37 or by agreeing to appoint arbitrators with particular qualifications.

    V. Enforceability Issues

    Whether enforceability is a limitation on the effectiveness of an interim measure ordered by an arbitral tribunal depends mainly on the mechanisms for enforcement available (1) in the arbitration process

    London Court of International Arbitration addresses this need, although somewhat differently, allowing a party to apply for an expedited formation of an arbitral tribunal in a case of exceptional urgency. LCIA Arbitration Rules art. 9.

    6 [1981] 1 Lloyds Rep 18. 7 See Departmental Advisory Committee on Arbitration Law, Report on the

    Arbitration Bill (DAC Report) 201 (Feb. 1996).

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    itself, (2) under the procedural law of the arbitration, and (3) in national courts having jurisdiction over the party against whom the interim measure is to be enforced or that partys assets.

    The enforceability of arbitral interim measures was considered by UNCITRAL to be of sufficient importance to justify consideration by a Working Group on Arbitration composed of all 39 state members.8 The Working Group initially identified three types of interim measures: (a) measures aimed at facilitating the conduct of arbitral proceedings, (b) measures to avoid loss or damage and preserve the status quo until the dispute is resolved, and (c) measures to facilitate later enforcement of the award.

    The Working Group considered that the need for an enforcement mechanism is greatest for measures to facilitate later enforcement of the award, such as orders freezing or attaching assets or orders to provide security. It considered that a mechanism to enforce interim measures to preserve the status quo (including orders regulating contractual performance during the arbitration) was needed to lesser extent. There was even less of a need for enforcement support for measures aimed at facilitating the arbitration, since the tribunal normally has the ability to regulate compliance with such measures by means of its final decision on arbitration costs.9

    The UNCITRAL Working Groups review led to extensive revisions to Article 17 of the UNCITRAL Model Law on International Commercial Arbitration which, in its unrevised form, was substantially similar to Article 21 of the AAA international rules referred to above. The revisions, which were adopted on 7 July 2006, require courts in countries that adopt the Model Law to enforce interim measures of protection ordered by arbitral tribunals, except in specified circumstances, such as where the arbitration agreement is invalid or the measure is contrary to public policy.10

    The English Arbitration Act 1996 provides mechanisms supporting enforcement of orders, directions and awards of the arbitral tribunal. For example, if a party fails to comply with a directive from the tribunal, where the seat of the arbitration is in England, the Act authorizes the

    8 See Report of the U.N. Secretary- General, supra n. 4. 9 See Report of the U.N. Secretary- General, Settlement of Commercial Disputes,

    A/CN/WG.III/WP.110 (Sept. 2000), at 78. 10 See UNCITRAL Model Law 1985, as amended 2006, art. 17, Report of the

    Working Group on Arbitration, A/CN.9/487 (June 2001), at 64-87 and Note by the Secretariat, A/CN.9/WG.II-/WP.119 (Jan. 2002), 72-84.

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    tribunal to issue a peremptory order to the same effect prescribing the time for compliance. If the party fails to comply with the peremptory order, the Act gives the tribunal broad powers to issue further directions, draw adverse inferences, proceed to an award, or make an appropriate order as to costs of the arbitration.11 Ultimately, unless otherwise agreed by the parties, the court may issue an order requiring a party to comply with a peremptory order of the tribunal.12

    Thus, when English law is the procedural law of the arbitration, there should be few, if any, difficulties in enforcing arbitral interim measures against a party in England. When the party against whom enforcement is sought is elsewhere, the enforceability of an arbitral interim measure will depend on the law of the place where enforcement is sought. If the measure is in the form of an interim award, there is at least an argument that the award can be enforced under the 1958 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) where the requirements of the Convention are otherwise met. This position is not, however, free from doubt.13

    The English Act also provides the English Court with powers to support arbitral proceedings where the seat of the arbitration is elsewhere. In this case, however, the Court may refuse to act if, in its opinion, the fact that the arbitration is abroad makes it inappropriate to do so.14

    11 English Arbitration Act, 1996 41. 12 Id., 42. 13 See Albert Jan van den Berg, The 1958 New York Arbitration Convention

    Revisited, ASA/IBA Conf., Zurich (28 Jan. 2000); Tijana Kojovic, Court Enforcement of Arbitral Decisions on Provisional Relief, Journal of Intl Arbitration, vol. 18, no. 5 (2001), pp. 511-532. For contrary views, see Report of the U.N. Secretary-General, supra n. 9, and David Brynmor Thomas, Interim Relief Pursuant to Institutional Rules under the English Arbitration Act 1996, Arbitration Intl, vol. 13, no. 4 (1997), p. 405. See also Ali Yeilirmak, Provisional Measures in Commercial Arbitration, (Kluwer Law Intl 2005) 6-34 to 6-41.

    14 English Arbitration Act, 1996 2, 44. See, for example, Mobil Cerro Negro Ltd v. Petroleos de Venezuela SA [2008] All ER (D) 310.

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    VI. Involvement of Third Parties

    Subject to certain narrow exceptions,15 an arbitral tribunal does not have authority to make any orders affecting persons who are not parties to the arbitration. This follows from the fundamental principle that the jurisdiction of an arbitral tribunal is based on the consent of the parties. Accordingly, a tribunal may not grant a request for interim measures when a third party is involved, such as an application to freeze monies in a partys bank account. Similarly, the tribunal may not grant a request to compel a third party to produce documents.

    In some cases this limitation on the tribunals authority can be circumvented by dealing with the request in another way. For example, instead of a freezing order, the tribunal could order the arbitrating party to pay monies into an escrow account. If documents from a third party are sought, the tribunal may be able to order an arbitrating party to request them from the third party.

    Ultimately, however, only a court will be in a position to grant an order requiring a third party to act in a certain way.

    VII. Governing Law

    International arbitration practitioners are aware of the significance of the place of arbitration. Where the parties locate the arbitration ought not to be merely a matter of neutrality or amenities.

    Under the New York Convention, the UNCITRAL Model Law, and the conflict-of-law rules of most countries, the governing law of the arbitrationthe lex arbitriwill normally be the law of the country in which the arbitration takes place. The governing law of the arbitration is of immense importance since it defines the legal requirements according to which the arbitration is to be conducted, including the division between arbitral tribunals and courts of powers to grant interim measures. As a result, the power of arbitrators to order interim measures can vary substantially from one country to another.

    Italy and the Canadian province of Quebec, for example, are at one extreme. They subscribe to the view that interim measures ought to be

    15 See Bernard Hanotiau, Problems Raised by Complex Arbitrations Involving

    Multiple Contracts-Parties-Issues, Journal of Intl Arbitration, vol. 18, no. 3 (2001), pp. 251-36; John M. Townsend, Nonsignatories and Arbitration, ADR Currents, vol. 3, no. 3 (Sept. 1998), p. 20.

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    granted only by courts, which are in a position to enforce them, and not by arbitral tribunals. Article 818 of the Italian Code of Civil Procedure expressly provides, The arbitrator may not grant attachment or other interim measures of protection, except if otherwise provided by the law.16

    The Italian approach to interim measures may have the advantage of clarity. However, the approach is criticized by those who believe that the parties should be able to choose the rules and procedures under which their arbitration will be conducted (including rules giving the tribunal full authority to grant interim measures, as in Article 21 of the AAA international rules), and that the parties chosen rules and procedures should be given effect whenever possible.

    Switzerland is at the other extreme. Under Swiss law, in the absence of an agreement to the contrary, the parties are to apply initially to the arbitral tribunal, rather than to the courts, for provisional or protective measures. If the tribunal grants an interim measure, and the party against whom it is directed fails to comply, the tribunal may seek assistance from a competent court.17

    In England and in several other pro-arbitration countries, such as France, Germany and the United States,18 the power of an arbitral tribunal to grant interim measures lies between these two extremes.

    Under the English Arbitration Act 1996, where England is the seat of the arbitration:

    Unless otherwise agreed by the parties, the arbitral tribunal has

    the power to make certain interim orders specified in the Act, including orders to provide security for costs or to inspect or preserve property or evidence. (Sections 38, 39);

    Parties are free to agree to the powers exercisable by an arbitral tribunal, including the power to order on a provisional basis any relief which it would have power to grant in a final award. (Sections 38, 39);

    Interim measures ordered by an arbitral tribunal are enforceable as peremptory orders, by the tribunal or, after available arbitral

    16 See Jan Paulsson (ed.), International Handbook on Commercial Arbitration

    (Kluwer Law Intl 2010) (re: Canada, Italy). The words except if otherwise provided by the law in Article 818 appear to relate only to the arbitrators power to suspend enforcement of a shareholders resolution under a specific Italian legislative decree.

    17 Swiss Private International Law Act 1987, ch. 12, art. 183. 18 See Paulsson, supra n. 16.

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    enforcement procedures have been exhausted, by the court. (Sections 41, 42);

    Where the arbitral tribunal has no power or is unable for the time being to act effectively, the court may grant interim measures largely on the same basis as in court proceedings. Where the matter is urgent, a party may apply directly to the court; where not urgent, the court will act only with the permission of the arbitral tribunal or the agreement of all parties. (Section 44).

    Therefore, the English Arbitration Act 1996 gives the tribunal only limited authority, in the absence of the parties agreement, to make interim orders, for example, to order security for costs or require the inspection or preservation of property. Unlike under the UNCITRAL Model Law, if the parties wish the tribunal to have broader power to grant provisional measures, they must provide for such powers in their arbitration agreement.

    Channel Tunnel Case

    In a case where there is an arbitration clause, the practical difficulty is to establish the division of powers, so to speak, with respect to interim measures. When does one apply to the arbitral tribunal and when does one apply to the court?

    This difficulty is illustrated by Channel Tunnel Group v. Balfour Beatty,19 a famous English case involving Trans-Manche Link (TML), the consortium building the Channel Tunnel, and Eurotunnel, the owner. TML threatened to suspend work on the cooling system after a dispute arose with Eurotunnel over the sufficiency of payments under a change order. Under a two-tier dispute resolution clause in the main contract, disputes between the parties were to be decided by a dispute resolution board (DRB) within 90 days, following which either side could refer the matter to arbitration in Belgium under ICC Rules. Article 8.5 of the ICC Rules (which was very similar to Article 21(3) of the AAA international rules) provided:

    Before the file is transmitted to the arbitrator . . . the parties shall be at liberty to apply to any competent judicial authority for interim or conservatory measures, and they shall not by so doing be held to infringe the agreement to arbitrate or to affect the relevant powers reserved to the arbitrator.

    19 [1993] AC 334 (HL).

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    Eurotunnel applied to the English High Court for an interim injunction to restrain TML from carrying out its threat to suspend the work. TML responded with a cross-application to stay Eurotunnels action pending arbitration. After the case was heard in the High Court, it was appealed twice, first to the Court of Appeal, then to the House of Lords. The case was decided differently by each court. The High Court refused to stay the action pending arbitration and indicated that it would be inclined to grant an injunction if TML gave notice to suspend the work. The Court of Appeal found that it was without jurisdiction to grant an injunction, given that the parties had chosen arbitration under the dispute resolution clause. The House of Lords decided that although the court had jurisdiction to grant interim measures, it would not be appropriate to exercise that jurisdiction since doing so could pre-empt the ultimate decision by the DRB or the arbitrators. The House of Lords concluded its decision with the following statement:

    Notwithstanding that the court can and should in the right case provide reinforcement for the arbitral process by granting interim relief I am quite satisfied that this is not such a case, and that to order an injunction here would be to act contrary both to the general tenor of the construction contract and to the spirit of international arbitration.

    It is clear that in 1993, when the Channel Tunnel case was decided, the House of Lords did not consider this to be an appropriate case to grant interim relief, primarily because if interim relief were granted, there would be little left for the arbitrators to decide.20 Unfortunately, the courts reasons provide little guidance as to when it would grant interim relief when there is an agreement to arbitrate.

    20 Id. at 366-68.

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    VIII. Arbitral Interim Measures: Fact or Fiction?

    As matters presently stand, whether arbitral interim measures are a matter of fact or fiction depends, to a large extent, on the governing law of the arbitration. The governing law in most cases will depend on where the arbitration takes place.

    As indicated above, in Italy and other places that have a similar legislative regime, an arbitral tribunals ability to order interim measures is largely a fiction. This is so even when the parties have incorporated rules that expressly authorize the arbitrators to do so, like the AAA international rules. The law trumps the agreement.

    Since the revisions to the UNCITRAL Model Law effective 7 July 2006, where the Model Law applies:

    The arbitral tribunal may grant interim measures, so long as

    certain specific conditions are met and the parties do not agree otherwise.21

    A court can order arbitral interim measures.22 Interim measures (but not preliminary orders made without

    notice) ordered by an arbitral tribunal may be enforced by a

    21 Revised Model Law, arts. 17(1), 17A, 17B. 22 Id., art. 17J

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    competent court, irrespective of the country in which the measure was issued.23

    When English law governs the arbitration, it is a fact that arbitrators

    can require a party to provide security for costs or make available property or evidence for preservation or inspection. However, beyond these types of interim orders, the division of powers between courts and arbitral tribunals to order interim measures is not clear and can still lead to practical difficulties such as those experienced in the Channel Tunnel case.

    Section 44(5) of the Arbitration Act 1996 provides helpful guidance as to this division of powers:

    In any case the court shall act only if or to the extent that the arbitral tribunal and any arbitral or other institution or person vested by the parties with the power in that regard, has no power or is unable for the time being to act effectively.

    This section seems to provide a sensible, workable guide for parties to determine whether an interim remedy should be sought from the tribunal or the court. Interim measures are to be obtained from the arbitral tribunal, unless it is unable to grant them effectively, for example because of limitations such as those described in the earlier sections of this chapter. However, Section 39 of the Act, which requires the parties to agree to give the tribunal authority to grant relief on a provisional basis, seems to blur what may otherwise have seemed clear. Section 39 raises the following questions:

    1. When is relief on a provisional basis for purposes of Section 39? The Report of the Departmental Advisory Committee on Arbitration Law (DAC) on the 1996 Act refers to temporary arrangements, which are subject to reversal when the underlying merits are finally decided by the tribunal.24 This description is very similar to the definition of interim measure of protection adopted by the UNCITRAL Working Group, which is any temporary measure ordered by the arbitral tribunal pending the issuance of the award by which the dispute is finally decided. The

    23 Id., arts. 17C(5), 17H. 24 DAC Report, supra n. 7, at 202.

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    DAC description, therefore, could be applied to many, if not most, interim measures.25 If interpreted in this way, arbitral tribunals will have relatively little power to order interim measures in the absence of the parties agreement.

    2. When will the parties be held to have agreed that the tribunal shall have the power to grant a provisional measure for the purposes of Section 39? Would parties who incorporated the AAA international rules into their arbitration agreement be considered to have agreed to grant the arbitrators the authority to order provisional measures by reason of Article 21 and, since May 1, 2006, Article 37 of those rules? Are the phrases whatever interim measures [the tribunal] deems necessary in Article 21 and any interim or conservancy measure the emergency arbitrator deems necessary in Article 37 sufficient to include the provisional measures mentioned in Section 39, notwithstanding that the word provisional does not appear in any of Article 21, Article 37 or the Optional Rules?

    Curiously, like the UNCITRAL Model Law, earlier drafts of the Act allowed an arbitral tribunal to issue provisional measures without the need for express party agreement. Section 39 of the Act was subsequently added to prevent arbitrators from issuing freezing and search and seizure orders, as the DAC concluded that such draconian powers are best left to be applied by the courts.26 However, Section 39 prevents arbitral tribunals from not only exercising such draconian powers, but also from granting any relief on a provisional basis, without an express agreement of the parties enabling them to do so.

    IX. Conclusion

    The availability of interim measures in international arbitrations is subject to several varying approaches under different national laws and arbitration rules and is therefore uncertain. Recognizing this problem and the need for more uniform solutions, the UNCITRAL Working Group started from the positionand ultimately concluded - that it is desirable

    25 See Secretariat Note, supra n. 10, 74. 26 DAC Report, supra n. 7, at 201-3.

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    for parties to have access to both the arbitral tribunal and to the courts in order to ensure the effective availability of interim measures. The Working Groups extensive revisions to Article 17 of the Model Law provide specific and, for some, controversial directions as to the type of interim measures a tribunal should order and in what circumstances it should order them.27 However, as the Channel Tunnel case illustrates, if the division of powers between tribunal and courts is not clearly defined, this approach can still lead to its own uncertainties.

    In considering this division of powers, there is much to commend the approach adopted in Section 44(5) of the English Arbitration Act 1996, without adding the complications of Section 39 described above. Such an approach would require parties to arbitration agreements to obtain their interim measures from the arbitral tribunal, unless (1) the tribunal is not in a position to grant them effectively, or (2) the parties have agreed to obtain interim measures from the courts rather than from the tribunal. This approach is consistent with principles of party autonomy and non-intervention by the courts except where necessary. It is also sufficiently clear to be workable in practice. As far as draconian freezing or search and seizure orders are concerned, these would in most cases remain the prerogative of the courts, as it is difficult to see how an arbitral tribunal would be in a position in such cases to grant these measures effectively. As regards other types of interim measures, if the arbitral tribunal has the ultimate responsibility to decide the merits of the dispute, is it not also in the best position to order interim measures to ensure that its decision is just and effective, assuming there are no practical impediments to its doing so?

    Currently, arbitral interim measures are part fact and part fiction. However, if the powers of arbitral tribunals and courts to order interim measures (including the division of those powers) can be further clarified and harmonized, the availability of arbitral interim measures will be substantially improved, to the overall benefit of the international commercial arbitration process.

    A. Arbital Authority to Issue Interim Relief

    The tribunals authority to issue interim relief in an international arbitration conducted under the International Rules of the American

    27 See Report of the U. N. Secretary-General, supra n. 4 and Secretariat Note, supra

    n. 10 at 82

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    Arbitration Association resides in Article 21 of those rules. Article 21 provides:

    (1) At the request of any party, the tribunal may take whatever interim

    measures it deems necessary, including injunctive relief and measures for the protection or conservation of property.

    (2) Such interim measures may take the form of an interim award, and the tribunal may require security for the costs of such measures.

    (3) A request for interim measures addressed by a party to a judicial authority shall not be deemed incompatible with the agreement to arbitrate or a waiver of the right to arbitrate.

    (4) The tribunal may in its discretion apportion costs associated with applications for interim relief in any interim award or in the final award.

    B. When Emergency Relief is needed Right Away

    What if a party to an international arbitration needs relief before the arbitrators are appointed? Some arbitral institutions have promulgated rules for this situation. Article 37 of the International Rules of the American Arbitration Association, for example, offers rules for emergency relief. The rules work like this:

    The party seeking emergency relief must apply to the AAA and

    give notice of the application to all parties. The AAA will appoint a single emergency arbitrator from a

    special panel, and within two business days of appointment, this arbitrator will establish a schedule to consider the application.

    The emergency arbitrator has the power to order or award any interim or conservancy measure the emergency arbitrator deems necessary, including injunctive relief and measures for the protection or conservation of property.

    When the tribunal is constituted, the emergency arbitrator no longer

    has power to act unless named as a member of the tribunal.

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