INTERIM RELIEF IN AID OF INTERNATIONAL COMMERCIAL ARBITRATION
| Citation | (2012) 24 SAcLJ 499 |
| Author | Ronald WONG LLB (Hons) (National University of Singapore). |
| Date | 01 December 2012 |
| Published date | 01 December 2012 |
A Critique on the International Arbitration Act
This essay seeks to explore the underlying issues regarding interim measures in aid of international commercial arbitration by surveying the development of the law on this area in Singapore. The normative theoretical perspectives on the issue shall be considered before a critique on the legal status quo in Singapore would be offered. It will be shown that the recent legislative amendments on the law of interim measures do not go far enough. Instead, Singapore should adopt the 2006 UNCITRAL Model Law on this crucial aspect of international commercial arbitration law.
1 International commercial arbitration is a complex legal phenomenon that involves parties and institutions deriving from different jurisdictions and juridical bases. Much attention has been given to international arbitration in Singapore lately. This has been the result of a deliberate effort on the part of the Singapore government to promote Singapore as an international arbitration hub. In January 2010, Maxwell Chambers, the world's first integrated dispute resolution centre, was officially opened in Singapore. The number of cases handled by the Singapore International Arbitration Centre has significantly increased from 58 cases in 2000 to 188 in 2011.1 In June this year, Singapore hosted the Congress of the International Council for Commercial Arbitration, during which Prime Minister Lee Hsien Loong alluded to the objective of such promotion of Singapore as an international arbitration hub, being that of creating economic opportunities in legal services.2 Other economic benefits of increased arbitration cases being conducted in Singapore would include the consumption of other services, for example, in the hospitality industry.3
2 While physical infrastructure and academic conferences are important to place Singapore on the world map for international arbitration, it is important to consider the bottom lines which potential arbitrating parties examine before selecting their seats of arbitration. One of the most crucial considerations would be the legislative framework for international arbitration in the jurisdiction. This essay, therefore, focuses on a particular area of the Singapore legislative framework which is lacking and outdated.
3 One significant issue that often arises in international commercial arbitration is the relationship between national courts and arbitral tribunals with regard to the power to issue and enforce interim measures, which is often necessary to preserve the subject matter of the dispute. In practice, that issue might determine whether one of the parties would ultimately obtain what it had sought.
4 This essay seeks to explore the underlying issues regarding interim measures in aid of international commercial arbitration by surveying the development of the law on this area in Singapore. The normative theoretical perspectives on the issue shall be considered before a critique on the legal status quo in Singapore would be made, together with proposals for reforming the law. It will be shown that the recent legislative amendments to the law of interim measures do not go far enough. Instead, Singapore should adopt the 2006 UNCITRAL Model Law on this crucial aspect of international commercial arbitration law.
5 International commercial arbitration can be a long-drawn process. Thus, evidence or property may dissipate before (even before an arbitral tribunal has been constituted), during or after arbitral proceedings but before enforcement of the final arbitral award. A party facing immanent and irreparable harm must be able to prevent it. Hence, interim measures are important because they preserve the sanctity of arbitral proceedings.4 They may go towards facilitating conduct of arbitral proceedings (for example, obtaining or preserving evidence), or towards avoiding loss or damage or to preserve a state of
affairs, or towards facilitating later enforcement of the award (for example, preserving the property or value that are the subject of the proceedings).5 Without them, the arbitral tribunal might be unable to make meaningful decisions, or the final award might ultimately be practically meaningless.6 This begs the question of which authority should be conferred power to grant interim measures in aid of international commercial arbitration. Three issues surface:6
(a) Should arbitral tribunals have the authority to grant interim measures; if so, how and by what standards should issuance be governed?
(b) Should courts enforce arbitral tribunal-ordered interim measures; if so, how and by what standards should enforcement be governed?
(c) Should courts issue interim measures in aid of international commercial arbitration; if so, how should the allocation of authority between the court and the arbitral tribunal be structured?
7 The answers to all three questions are not mutually exclusive. Courts and arbitral tribunals could simultaneously have authority to issue interim measures. At the same time, courts could enforce interim measures issued by arbitral tribunals. The difficult question is how. Before turning to the “how”, the “should” questions shall be briefly discussed.
A. Should the relevant bodies have authority to order or enforce interim measures?
8 Regarding the above question, it should be noted that we are considering the normativity of whether arbitral tribunals and/or national courts should have the authority to issue interim measures, and/or whether courts should have authority to enforce tribunal-ordered measures. The issue of whether courts should refrain from doing so in a
particular context is considered under the issue of how the allocation of authority between courts and tribunals should be structured.(1) Should arbitral tribunals have the authority to grant interim measures?
9 It is submitted that arbitral tribunals should have the authority to grant interim measures.
10 Firstly, it could be argued that because disputing parties have consented to the arbitral proceedings and the arbitral tribunal's authority, it must necessarily be implied that they had also consented to the tribunals' authority to take measures that preserve the integrity of the proceedings.7 Following from this logic, if the parties had consented to arbitral proceedings and the tribunal's authority but explicitly stated that they did not consent to the tribunal's authority to issue interim measures, then that must be respected. Indeed, the juridical basis for international commercial arbitration is fundamentally the parties' agreement.8
11 Secondly, since arbitral tribunals are already technically familiar with the case and subject matter and may thus take a shorter time to make a decision than the courts, resources would be more effectively used if parties were able to make their requests for interim measures directly to the tribunal.9 Applying to the courts may be a lengthy process because they might solicit arguments on the issue or because the court judgment might be appealed.
12 Thirdly, since arbitrations are often conducted in a state that has little or nothing to do with the subject matter in dispute, the courts of the arbitral seat might not have jurisdiction over the parties or the assets
in question and a court in another state may have to be requested instead.1013 Fourthly, the law in some jurisdictions might take the position that because the parties had agreed to arbitrate, they should be deemed to have excluded the courts from intervening in the dispute.11 If so, then there would be no means other than tribunal-ordered measures to ensure the integrity of the arbitral proceedings.
14 Fifthly, an arbitral tribunal is entrusted by contracting parties with the power to resolve their dispute. The consensual nature of international commercial arbitration generally results in a high likelihood of the tribunal's orders being voluntarily complied with. For example, a survey done by the American Arbitration Association revealed that parties complied with the arbitral tribunal's decision on interim relief in 90% of the cases.12
(2) Should courts enforce arbitral tribunal-ordered interim measures?
15 It is argued that courts should enforce arbitral tribunal-ordered interim measures for several reasons.13
16 Firstly, although it is suggested above that there is generally a high likelihood for parties to comply with arbitral tribunal orders, there may be instances where that is false. Such orders, that “preserve the integrity of the arbitral process”,14 would become meaningless if it is not given effect by sanction of the state. The interim “relief must be enforceable at the time it is granted”.
17 Secondly, arbitrating parties would want increased predictability in regard to their rights and reduced hostility in regard to their relationship. The certainty that the tribunal-ordered interim measures would be given effect by a court of law ensures that.
18 Thirdly, there is today an increased ease of movement of assets from one jurisdiction to another. Interim measures generally go towards preventing such movement that might otherwise result in meaningless
awards. Without court enforcement, there remains the uncertainty that meaningless awards might occur.(3) Should courts issue interim measures in aid of international commercial arbitration?
19 It is further argued that courts should be authorised to issue interim measures as well.
20 Firstly, there might be particular instances where an arbitral tribunal is unable to order interim measures. For instance, interim measures might be required at the outset of a case even before an arbitral tribunal has been constituted. Also, in some states, only courts are authorised to make particular types of interim orders (for various rationales);15 for example, Mareva16 and Anton Piller17 i...
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