In the unfortunate event that a business deal goes sour among international parties, Florida law provides participants who have submitted their dispute to international arbitration with increased safeguards to secure the collectability of an arbitration award. International scholars have noted an increased danger in international disputes because assets necessary for the enforcement of a final award may be removed to a jurisdiction where enforcement is unlikely. That’s why some U.S. jurisdictions, like Florida, have adopted laws to inject enhanced predictability into the collections process by adoption of a modern and internationally acceptable framework.
Recognizing of the rising prominence of international commercial disputes, in 2010 the Florida Legislature passed Chapter 684 of the Florida Statutes, which is designated as the Florida International Commercial Arbitration Act. The Act was modeled after the revised United Nations Commission on International Trade Law [UNCITRAL] Model Law on International Arbitration and requires that parties to the arbitration have places of business in different countries. See Fla. Stat. § 684.0002. Florida’s Act represents the most comprehensive adoption of the Model Law in the United States, though other states, including California, have adopted various aspects. Two sections of the Act, which have yet to be the focus of any Florida court case, may provide international participants in arbitration with an expanded opportunity to sequester assets of the opposing party in anticipation of a final award.
Section 684.0018 expressly provides that an arbitral tribunal may award interim relief in order to “[p]rovide a means of preserving assets out of which a subsequent award may be satisfied.” Section 684.0019 provides the conditions for granting such an interim measure, which fall short of those required for injunctive relief. While injunctive relief may not provide litigants with a means to preserve monetary assets in anticipation of a final outcome, a party may seek to invoke injunctive relief to avoid dissipation of other assets pending a final outcome, though a high burden exists. See Weinstein v. Aisenberg, 758 So. 2d 705, 711 (Fla. 4th DCA 2000) dismissed, 767 So. 2d 453 (Fla. 2000). Relatively speaking, the burden imposed by the Act is notably lower.
The conditions to award interim relief include that “[h]arm not adequately reparable by an award of damages [is] likely to result if the measure is not ordered” and that “a reasonable possibility exists that the requesting party will succeed on the merits of the claim.” Fla. Stat. § 687.0019. By contrast, under Florida law, the burden for a party requesting injunctive relief is that harm be likely to result absent the relief requested, and that there be a substantial likelihood of success on the merits of the requesting party’s claim. See, e.g., Naegele Outdoor Adver. Co., Inc. v. City of Jacksonville, 659 So. 2d 1046, 1047 (Fla. 1995), as modified on reh’g (Aug. 24, 1995). In short, Chapter 684 requires a lesser burden than that required for injunctive relief in that harm under the Act be likely to result (as opposed to will result) and that the likelihood of success be reasonably possible (versus substantially likely). The Act also requires that harm is not adequately reparable by an award of damages, as compared to the injunctive relief standard that requires irreparable harm.
As international commerce continues to grow, and as Florida continues to attract foreign business and investment, parties doing business in Florida should consider the benefits of international arbitration when drafting agreements and when considering a mutually favorable situs to resolve international disputes.