What is an interim measure?
Interim measure covers a wide variety of orders, and most are granted at an early stage of the proceedings to preserve the status quo or prevent the dissipation of assets before an award in made in the arbitration by the arbitral tribunal.
They are often awarded without notice and on a provisional basis to preserve evidence and can be granted by an arbitral tribunal or by a court.
Which measure to use and when?
There are a range of interim measures that are available to parties in international arbitration, and each are appropriate depending upon the circumstances of the case.
There are various factors that must be considered when deciding whether or not to make an application for an interim measure, for example:
(i) Is there a risk that, having successfully defended a claim, you are unable to recover your costs from the opponent?
(ii) Is there a risk that your opponent may damage, destroy or hide evidence or property that is relevant to the subject matter of dispute?
(iii) Is an interim payment order required because it would be unfair to deprive you of
your money pending the outcome of the arbitration?
(iv) Is there a risk that your opponent may hide or dissipate its assets?
(v) Is there a risk of your opponent’s conduct causing irreparable harm?
In the above circumstances, an interim measure can potentially remedy the situation. By way of example, in the last example (v), in a trademark infringement claim, a claimant’s commercial reputation may be irreparably harmed by the infringement and if the defendant is allowed to continue with its conduct during the arbitration, it may not be possible to compensate the claimant for the harm caused and therefore an interim injunction may be able to remedy the situation.
In the other examples mentioned above, the tribunal may have the power to make provisional awards or to order interim measures to assist either of the parties.
Interim and conservatory measures
Interim and Conservatory Measures or interim remedies are the interim and precautionary measures that are granted by the Arbitration Tribunal before the merits of any dispute are considered. Under the UAE Arbitration Law the interim and conservatory measures are granted by an Arbitration Tribunal in order to (a) preserve evidence that is material for resolution of the dispute; (b) for preserving the goods which constitute part of the subject-matter of the dispute.
This includes making an order to deposit goods with a third party or to sale of perishable goods; (c) for preserving both fixed and movable assets out of which a subsequent award may be satisfied; (d) for maintaining the status quo pending determination of the dispute; (e) in order to prevent an action that may cause prejudice to the arbitration process itself.
Additionally, under the provision of the UAE Arbitration Law, a party seeking an interim and precautionary measure can file an application directly before chief justice of the Court of seat and seek an interim or conservatory measures in relation to an existing or potential arbitral proceeding. In the event, the court of seat awards the interim and precautionary measure it must be followed by filing of a substantive arbitration case of merits, for determination of the disputes between the Parties.
From our practice we note that generally, the parties seek interim and precautionary measure to save the assets of the Respondent from the risk of dissipation.
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