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Interim reliefs in international arbitration: the appropriate standard for tribunals

Interim reliefs frequently play an important role in the resolution of international arbitration disputes. For example, it may be necessary to obtain interim orders to preserve: (i) the assets which are the subject of the dispute; or (ii) relevant evidence; or (iii) the status quo pending determination of the dispute. In many disputes, the availability of interim reliefs is crucial to ensuring that the award ultimately issued by the tribunal is meaningful and effective.

The prevailing approach in the majority of national arbitration laws and institutional rules is to confer concurrent jurisdiction on the courts and tribunals to grant interim relief. As to the interplay of concurrent jurisdiction, in Singapore, in line with the policy of minimal curial intervention, parties are expected to look first to the tribunal for interim relief1; the court will entertain an application for interim relief in support of arbitration only if or to the extent that the tribunal has no power to make the order sought or is unable for the time being to act effectively, and in case of urgency.

In applications for interim relief made to the court, the matter is assessed by the court by reference to the applicable standards in the procedural rules of that court. However, as most national arbitration laws and institutional rules do not stipulate the approach or standards to be applied by the tribunal, this remains a topic of some debate. The approach can vary from tribunal to tribunal, even within the same jurisdiction. This can be somewhat unsettling for some parties, who may prefer a greater degree of clarity, certainty and predictability.

In the not so recent past, it was not unusual to find tribunals applying the approach taken in the courts of the seat, as the law governing the procedure of the arbitration. For example, Singapore tribunals in arbitrations with a Singapore seat have applied the standards under American Cyanamid v. Ethicon [1975] 2 WLR 316 – which is the test applied in the Singapore courts – in considering applications for interim relief. Under the American Cyanamid test, the applicant must show:

(a) That there is a serious question to be tried with a real prospect of success;

(b)That damages will not be adequate compensation to the applicant for any losses caused by the tribunal's refusal to grant the injunction; and

(c) That the balance of convenience lies in favour of granting the injunction.

However, the appropriateness of applying the "court approach" may be questioned, given that parties typically do not choose the seat of the arbitration because of some preference for the standards applied in litigation in the courts of the seat. This is especially so in an international arbitration where parties typically chose the seat for neutrality; and the seat otherwise has no connection with the parties or the substance of the dispute.

Nevertheless, there is an increasing tendency of tribunals and counsel in international arbitrations to take a more "transnational" approach2, and draw some guidance from the approach set out in Article 17A of the 2006 Model Law, even though Article 17A of the 2006 Model Law3 has not yet found widespread acceptance in national arbitration laws. Article 17A of the 2006 Model Law provides that the tribunal shall grant an order for interim relief only if the tribunal is satisfied that:

(a) Harm not adequately reparable by an award of damages is likely to result if the measure is not ordered, and such harm substantially outweighs the harm that is likely to result to the party against whom the measure is directed if the measure is granted; and

(b) There is a reasonable possibility that the requesting party will succeed on the merits of the claim, although the determination on this possibility shall not affect the discretion of the tribunal in making any subsequent determination.

It is considered that this approach is better suited for international arbitrations than the "court approach", bearing in mind that the preparation of the revised articles of the Model Law in 2006 on interim measures was "the subject of due deliberation and extensive consultations with Governments and interested circles and would contribute significantly to the establishment of a harmonised legal framework for a fair and efficient settlement of international commercial disputes."4

The work of the UNCITRAL in the drafting of Article 17A considered in detail the extent to which the tribunal should consider the merits of the case. The approach finally decided on "reasonable possibility" of success suggests that the tribunal only needs to be satisfied that the case is not a frivolous one. As some commentators have observed, the merits of the case "rarely play any direct role in determining whether or not interim relief is granted."5 In addition, a tribunal applying the Article 17A approach is not directly engaged in weighing up the "balance of convenience" but looks for factors and circumstances that warrant an interim protection order prior to resolution of the merits.6

It remains to be seen whether, in due course, the approach in Article 17A will find wider acceptance in national arbitration laws and provide greater certainty to parties as to the approach to be taken by tribunals in applications for interim relief. In the meantime, however, there are encouraging signs of a greater acceptance within international arbitration tribunals of the Article 17A approach.

1. In a further nod to the policy of minimal curial intervention, the Singapore High Court has held that the court does not have the jurisdiction to set aside interim orders made by a tribunal: PT Pufuaku Indah and Ors v Newmont Indonesia Ltd [2012] 4 SLR 1157.

2. Born, International Commercial Arbitration (Wolters Kluwer, 2014), 2nd Ed., at §17.02[G][3].

3. The same approach has also been adopted in Article 26 of the UNCITRAL Rules (2010 Ed.).

4. Introductory recitals to UN General Assembly resolution 61/33 passed on 4 December 2006.

5. Lew, Mistelis and Kroll, Comparative International Commercial Arbitration (Kluwer Law International, 2003) at 23-62.

6. Although the New Zealand Courts have concluded that there is no real difference between the Article 17A approach and the traditional approach of assessing the "balance of convenience" and "serious question to be tried": Safe Kids in Daily Supervision Limited v. McNeill, [2010] NZHC 605; Green Acres Franchise Group Ltd v Reube [2014] NZHC 402.