How does one enforce an arbitral interim measure if the opposing party refuses to comply?
As with litigation, interim measures are ordered in arbitration to prevent hindrances to the proceedings, the parties’ legitimate interests, or the final arbitral award. The very nature and goal of interim measures is that swift compliance is vital. This – and the fact that arbitrators, unlike state courts, are not backed by public instruments of coercion to enforce their decisions – brings up a challenging question: How does one introduce an arbitral interim measure into a national legal system, give it the force of a court decision, and ensure its swift and efficient enforcement?
Interim measures – a system of its own
While arbitral awards are routinely recognised and enforced worldwide, the specific characteristics of arbitral interim measures dictate they be treated differently from awards.
Like awards, arbitral interim measures are limited to the parties and the subject-matter of the dispute. Crucially, however, arbitral interim measures are limited in time, susceptible to amendments, dependent on the ultimate resolution of the dispute, and must not “affect the discretion of the arbitral tribunal in making any subsequent determination” on the merits of the case.
These characteristics, specifically the lack of finality, are the main obstacles to arbitral interim measures being recognised and enforced by the national courts. Therefore, these inherent features of interim measures are also the main reason that arbitral interim measures may turn out to be unfeasible and sometimes even useless tools in arbitration.
Thus, various jurisdictions either (i) have specific rules adapted to recognition and enforcement of arbitral interim measures, (ii) enforce arbitral interim measures without a framework designed for this purpose, or (iii) are simply unlikely to recognise and enforce arbitral interim measures. Montenegro and Serbia can each fit one of these categories.
Montenegro – statutory framework in place, but courts have yet to apply it
In Montenegro, the Arbitration Act (Zakon o arbitraži) (“MAA“) shows a strong proenforcement bias. Modelled on the UNCITRAL Model Law on International Commercial Arbitration of 2006, the MAA includes provisions expressly allowing for recognition and enforcement of arbitral interim measures by national courts.
The MAA thus provides limited grounds which may lead to refusal of recognition and enforcement of arbitral interim measures. Essentially, these grounds were transplanted from those intended for the recognition and enforcement of arbitral awards, with adaptations required to acknowledge the specific nature of interim measures.
In the first place, grounds relating to arbitral awards were incorporated (by reference to the relevant article of the same law) in entirety, except for the “lack of finality”, given that interim measures are never final. Specific grounds, adapted to interim measures, were then added. Thus, recognition may be refused if (i) the party requesting such a measure in arbitration did not provide security as ordered by the arbitrator(s); (ii) the interim measure was terminated or suspended by the arbitrator(s), court at the seat of arbitration (if authorised to do so), or by the state whose law was the basis of the interim measure; or (iii) the arbitrator(s) ordered an interim measure which is unknown in Montenegrin law. In the last case, however, the court may still recognise the interim measure in question by amending it in line with Montenegrin law (ie adapting it to its own law), without changing its substance.
The mechanism is yet to be tested in practice, given that the MAA, enacted in 2015, is still quite new. Nonetheless, with the statutory framework in place in Montenegro, arbitral interim measures should be recognised and enforced.
Serbia – with no specific statutory framework, can practice show flexibility?
Unlike Montenegro, Serbia is not among those jurisdictions which provided for a specific statutory framework to deal with this matter. Although enacted in 2006, the Serbian Ar-bitration Act (Zakon o arbitraži) was modelled after the UNCITRAL Model Law on International Commercial Arbitration of 1985 and, therefore, does not implement specific provi-sions on recognition and enforcement of arbitral interim measures.
In principle, this would mean that arbitral interim measures are not capable of being recognised and enforced in Serbia. However, it was reported that according to the Supreme Court of Serbia, the fact that a decision is an interim measure is not per se a reason to deny it recognition and enforcement.
Despite this pronouncement of the Supreme Court, in Serbia the recognition and enforcement of arbitral interim measures has not been prominent in practice so far. There-fore, it has yet to be seen whether, on what grounds and to what extent courts would show flexibility in recognising and enforcing arbitral interim measures. The lack of an ex-press statutory framework, the general unfamiliarity of the courts with arbitration, and the overall inconsistency of court practice, would suggest that this effort could prove difficult at best.
In Montenegro, with the statutory framework in place, arbitral interim measures should be recognised and enforced. In Serbia, it has yet to be seen whether, on what grounds and to what extent courts would show flexibility in recognising and enforcing arbitral interim measures.