Interim “relief” (or “measures”) cover a variety of different orders that may be made pending the outcome of an arbitration; for example:
- measures to freeze funds that may be required to satisfy an arbitral award;
- measures to prevent a party damaging or hiding property which is subject to the dispute;
- measures to prevent a party damaging or hiding evidence;
- an interim payment to a claimant with a strong case; or
- (in “loser pays” arbitrations) security for costs for a respondent who otherwise faces the risk of an unsuccessful claimant failing to pay a costs award.
Whether such measures are available (from the Arbitral Tribunal or the English Court) depends on a number of factors. For instance, the parties may agree to exclude the Court or Tribunal from having such powers. Other factors are set out below.
Relief granted by the English Court
The Court has power to order interim relief – s44 of the Arbitration Act 1996 (the “1996 Act”).
The power is not limited to arbitrations seated in England. It can assist proceedings wherever they are in the world and under whatever law.
However the Court will only act:
- if the matter is urgent - s44(3) - or
- if the parties agree to the application or the Tribunal permits it - s44(4)-
- if the Tribunal cannot itself act effectively – s44(5) – for example because it has not been formed yet or lacks the necessary power.
In practice, these provisions rarely prevent:
- urgent ex parte orders where the additional delay in enforcing an Arbitral award might render it nugatory; or
- freezing orders; which are frequently urgent and ex parte, and where the funds tend to be held by third parties – usually banks – against whom arbitral awards cannot be enforced; or
- orders to preserve evidence held by third parties, so long as there is urgency or the Tribunal permits it.
Additionally, some institutional rules prevent or restrict an application to Court. For example, Article 25.3 of the LCIA rules and Article 28(2) of the ICC rules only allow it in, respectively, “exceptional” or “appropriate”circumstances after the Tribunal is formed.
Where the Court makes an order before the Tribunal is formed, it may give the Tribunal power to revoke the order later – s44(6).
Relief granted by the Arbitral Tribunal
In arbitrations under English law, the Tribunal has power to order interim relief – s38 of the 1996 Act.
This is subject to contrary rules, but the most recent LCIA, ICC and UNCITRAL rules all permit applications for interim measures. Indeed, the LCIA and ICC have a procedure for appointment of an emergency arbitrator if the Tribunal is not yet formed.
In Seele Middle East v Drake & Scull, Ramsay J indicated (at §33) that the availability of an emergency arbitrator may impact on the s44(5) assessment of whether the Court is able to act.
Generally, where a decision requires enforcement in England, parties prefer to apply to the English Court if possible, given the additional hurdle of enforcing a Tribunal’s decision. An arbitral decision which takes the form of a procedural “order” cannot be enforced. If the decision takes the form of an “award” deciding substantive issues raised in the arbitration it can generally be enforced, but there may be opportunities for challenge.