The View against Arbitral Ex Parte Interim Relief
Derains, Yves, Dispute Resolution Journal
A confirmation that the best may be the enemy of the good
The current work of the United Nations Commission on International Trade Law (UNCITRAL) on the revision of Article 17 of the UNCITRAL Model Law on International Commercial Arbitration (Model Law), in so far as it contemplates giving arbitrators the power to grant ex parte interim relief, has raised a huge concern within the international community of arbitrators. This concern was expressed by the Milan "Club of Arbitrators" both at its XIII colloquium on "interim measures and international arbitration" held on Oct. 11,2002, and at the London Court of International Arbitration in May 2003. Many international arbitrators, including myself, believe that receiving such power would be a poisonous gift. The reasons for this reaction are discussed below.
Those opposed to granting arbitrators the power to order ex parte interim relief believe that expressly conveying this power to the arbitrator would make bad policy.
There are many forms of interim relief, but generally they serve two purposes: either to maintain the status quo between the parties until there is a decision on the merits of their dispute, or to prevent a party from disposing of assets against which the award might be enforced. Sometimes, these two purposes arc combined. There is no serious discussion today that arbitral tribunals may grant such relief as between the parties, as indicated by existing Article 17 of the UNCITRAL Model Law and various institutional arbitration rules, such as Article 23 of the Arbitration Rules of the International Chamber of Commerce (ICC), Article 25 of the Arbitration Rules of the London Court of International Arbitration, and Article 21 of the International Arbitration Rules of the International Centre for Dispute Resolution. But this authority does not extend to relief against a third party who is not involved in the arbitration. For instance, arbitral tribunals in construction disputes may order the owner, on a request for interim relief by the contractor, not to demand a performance bond before an award on the merits has been rendered. The tribunal may issue an injunction directed to the company because it is a party to the arbitration; but it is powerless with regard to the bank, which is not a party to the arbitration.
In general, parties have no need to ask arbitral tribunals to order interim measures ex parte. The reason for seeking ex parte interim relief is so that the respondent has no ability to take immediate action to circumvent the order and make the relief sought useless, such as by lodging a call under a performance bond that the respondent intended to stop. Yet an ex parte order issued by an arbitrator would not have this effect because it is not immediately enforceable. The intervention of a court having jurisdiction is necessary. For the system to work, the judge would have to accept an ex parte motion to enforce the ex parte order of the arbitral tribunal. Even if the court were prepared to do this, it would be faster and more efficient to file the request for ex parte interim relief directly with the court.
On the other hand, if ex parte interim relief is not available in the court, it would be preferable for the petitioner to file a request for interim relief with the arbitral tribunal, with notice to the respondent, asking for an order directing the respondent to refrain from modifying the status quo until after the tribunal has made its decision on the interim relief sought. Most arbitrators will immediately issue such an order and will organize short proceedings so that the parties can be heard on the issue. The arbitrators' powers of persuasion generally are sufficient to "freeze" the situation until the tribunal has reached a decision on the request for interim relief. In this situation, any interim relief granted after the parties had an opportunity to present their case should be respected because of the parties' respect for the tribunal and its persuasive powers. …