In most of the commercial dispute cases, parties require to obtain an interim order before the starting of the arbitration proceedings to avoid an irreparable loss and injury which may happen due to an aggressive act of the opposite party or for any other reason. The common legal requirements for seeking an interim protection from an adjudicating forum, are the existence of urgency and possibility of an irreparable loss and injury. Even in the international arbitration cases, many parties require to get interim protection either from the courts or from arbitral tribunals. One of the issues which remains unsettled in the field of international arbitration is obtaining an enforceable and timely interim orders. Enforcement of an interim order becomes unenforceable since the court orders passed by the National courts of one country are not recognised by other countries, excluding a few. Even though arbitral awards are enforceable in many countries because of the New York convention, many countries did not have a mechanism provided in their arbitration act to recognise interim awards. In such a situation the parties should analyse various factors before seeking an interim order. The endeavour of the author is to deal with the aspects which govern the interim orders in the field of international arbitration.
The legal requirements for a court or an arbitral tribunal to grant an interim order from a court or an arbitral tribunal are the urgency in the matter, possibility of an irreparable loss and injury, impossible to compensate financially, the issue is covered by the arbitration clause, the legality of the nature of the order/ award in that country etc., The applications for interim relief should identify a. the right(s)to be protected b. the nature of measures that the party is seeking c. the circumstances that require such a measure. The court or an arbitral tribunal should not grant an interim order when the granting of the interim order as prayed for will amount to granting of final relief in the main arbitration proceedings. The interim orders can be issued only against a party to the arbitral agreement in arbitration related matters and not against non- parties.
The best possible situation is where the arbitration law of the country where subject matter of the interim protection application is situated provides for an interim order in support of a foreign seated arbitration. This is because the party expecting a potential irreparable loss can approach the court of law in the country where the subject matter of the interim application is situated and get a very effective interim order without any difficulty in enforcing it. Many leading popular commercial countries provide for interim orders in support of a foreign seated arbitrations. India also have recently joined the list of pro-arbitration countries which provide for interim orders in support of foreign seated arbitrations, by adopting Arbitration 2015 (Amendment) Act.
The other option available to the arbitrating parties, prior to appointment of the arbitral tribunal is to approach the court having jurisdiction over the arbitration seat. The major difficulty arises in enforcement of the said order because the court orders are not covered in the New York Convention. Such orders granting interim relief will have the power to get enforced only when there is a bilateral contract between the said countries.
Most of the arbitral legislations do not encourage the national courts to grant interim orders after the formation of the arbitral tribunals. Hence the powers of the National courts are minimum after the formation of the arbitral tribunal. The applicable law with regard to interim orders by the tribunals is the procedural law of the seat of Arbitration. That means for an Arbitration seated in Singapore IAA will be the applicable law. The arbitral tribunals get all the power to decide the interim orders to issue interim awards or to reject the applications seeking interim orders. But the requirement of getting an interim order arise mostly before the appointment of arbitrators. Hence the international arbitration community invented a new mechanism in the name of emergency arbitrator to handle the applications seeking interim orders before the formation of the arbitral tribunals.
Prior to formation of the arbitral tribunal if a party is in an urgency to protect something by way of an interim order, it can approach the arbitral institution chosen by the parties, as per the arbitration clause and file an application seeking appointment of Emergency arbitrator. All the major Arbitral institutions including ICC, SIAC, SCC, JAA,KLRACA, LCIA, AAA, IDAC India, ICA, DIAC provide for emergency arbitrator provisions. The emergency arbitrators are appointed within 24 hours and final order is passed within 15 days. It is important to keep in mind that the work of emergency arbitrator comes to an end once the regular arbitral tribunal is formed. Unless specifically consented by parties the emergency arbitrator will not be the part of the regular arbitral tribunal. The orders passed by the emergency arbitrator can be reviewed by the regular tribunal later. The interim award passed by the emergency arbitrator enjoys all the privileges of an award under New York Convention and hence can be enforced in the convention countries like a final international arbitral award. There are some countries which do not recognise interim awards under New York Convention, since they do not finally decide the rights of the parties.
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