Answer By law4u team
In arbitration, parties may need urgent protection before the final award is issued. This is where interim measures come into play. These are temporary, binding orders granted by an arbitral tribunal or court to protect a party’s rights, assets, or evidence during ongoing proceedings. Interim measures maintain the status quo, prevent irreparable harm, and ensure that the final award is effective and not undermined during the process.
Understanding Interim Measures in Arbitration
1. Definition of Interim Measures
Interim measures are temporary reliefs granted to a party during an arbitration proceeding to:
Preserve assets or property
Prevent actions that may cause harm or prejudice
Maintain evidence
Ensure that the final award can be enforced effectively
2. Legal Basis and Recognition
Many jurisdictions and arbitration frameworks (e.g., UNCITRAL Model Law, ICC, LCIA, SIAC) recognize and enforce interim measures. Some national laws also allow courts to issue such measures in support of arbitration.
3. When Are They Granted?
Interim measures may be granted when:
There is a risk of irreparable harm if the relief is not given
A party is likely to dissipate assets
One party attempts to transfer or destroy evidence
Immediate action is required to protect the arbitral process
4. Types of Interim Measures
Asset Freezing Orders: Prevent a party from moving or selling property
Injunctions: Restrain a party from acting in a harmful way
Security for Costs: Require a party to deposit money to cover the other’s legal costs
Preservation of Evidence: Prevent destruction or tampering of critical evidence
Orders to Maintain Status Quo: Keep conditions unchanged until the final award
5. Emergency Arbitrator
In urgent cases, parties may approach an emergency arbitrator even before the full tribunal is formed. Many institutional rules (e.g., ICC, SIAC) provide for this mechanism for rapid interim relief.
6. Court Involvement
Courts may assist in:
Granting interim relief before arbitration begins
Enforcing arbitral interim measures
Overriding or supplementing tribunal authority in special situations
7. Ex Parte Interim Measures
In extremely urgent situations, interim relief may be sought without notifying the other party (ex parte). However, this is rare and usually requires strong justification.
8. Enforceability of Interim Measures
Under the New York Convention, final awards are enforceable globally, but interim measures may not always be recognized, depending on local law.
However, many modern legal systems have adopted laws to enforce such measures as binding.
Example
Scenario:
Company A enters into a supply contract with Company B. During arbitration over breach of contract, Company A learns that B is transferring funds to offshore accounts to avoid a potential future award.
Steps Taken:
Company A requests the arbitral tribunal to issue an interim order to freeze B’s assets.
The tribunal finds sufficient risk of asset dissipation and issues the order.
Company A applies to a national court to enforce the freeze order.
The court recognizes and enforces the interim measure based on national arbitration law.
This prevents B from transferring the funds until the final award is given, ensuring the enforceability of any financial remedy.
Key Takeaway:
Interim measures serve as protective shields during arbitration, helping ensure justice is not defeated by delay or bad faith actions.
