BORRADOR DE ARTÍCULO POR PUBLICARSE EN EL … Liber Amicorum LOB _final 2 con... · BORRADOR DE ARTÍCULO POR PUBLICARSE EN EL LIBER AMICORUM A LUIZ OLAVO BAPTISTA – ... almost

BORRADOR DE ARTÍCULO POR PUBLICARSE EN EL LIBER AMICORUM A LUIZ OLAVO BAPTISTA – NO REPRODUCIR POR FAVOR

Enforcement in Latin America of Provisional Measures ordered by Arbitral Tribunals. Where we are. Where we can go.

Dyalá Jiménez Figueres1

I. Introduction

To submit that the success of the New York Convention is the main reason why the

international arbitration system works is not an overstatement. Lacking a Damocles sword,

the incentives for a debtor of an arbitral award to pay its creditor would depend solely on

values such as good faith or the reputation gained from a principled conduct. Though not

absent in the international commercial community, these values tend to dissipate when

parties are in dispute. Thus it is the “teeth” of our generally friendly system that makes it

effective.2

In many cases, pressure is needed long before the arbitral award is rendered lest the process

becomes a mere performance of legal aptitudes. This pressure against a recalcitrant party

often takes the form of an order for provisional measures. The working group of the

revision of the UNCITRAL Model Law on International Commercial Arbitration (“Model

Law”) deemed provisional measures a pillar of arbitration as a mechanism for resolving

international commercial disputes.3 Since it is usually more convenient and appropriate to

request provisional measures from the arbitrators who are dealing with the dispute, the

international commercial arbitration system has “borrowed” from the civil procedural

systems the regime on provisional measures. The terms of such “loan” vary according to

each jurisdiction, depending on how much autonomy is given to arbitration. There exist,

1 Arbitrator and Consultant, DJ Arbitraje. Based in Santiago, Chile. The author is grateful to Professor Luiz Olavo Baptista for inviting her to participate in the Liber Amicorum in his honor. The opportunities of working with Professor Luiz Olavo have been precious to me. The author wishes to give special thanks to Mr. Sébastien Besson for his generous sharing of information regarding a subject on which he has been so prolific [although I disagree with him!]. Also, thanks should go to Francisco González de Cossío, Juan Manuel Marchán, Xavier Andrade, Carlos Soto, Rodrigo Urzúa, Eduardo Zuleta, and Michael Pryles and Robert Kovacs for their support in the gathering of part of the material used for the preparation of this article. 2 In Latin America, all countries are parties to the New York Convention. 3 A/CN9/468, 10 April 2000, No. 60, p. 15. Given the concurrent jurisdiction with State courts, this statement may go too far, but it does depict the current significance of provisional measures in the international commercial arbitration community.


thus, concurrent jurisdictions for provisional measures, an exception to the exclusivity of

the arbitral jurisdiction.

Since there is no international treaty equivalent to the New York Convention for the

enforcement of provisional measures, the question that is begged is, how effective are

provisional measures ordered by arbitral tribunals? This commentary concerns the status of

the enforcement in Latin America of provisional measures ordered by arbitral tribunals.

The premise of this article is that effectiveness is measured only by the possibility of court

enforcement of the decisions ordering provisional measures. As things stand today, the

Dionysius holding the sword can only be the State courts since only they have imperium.4

This issue is a current one in the design of international commercial arbitration regimes in

the region, and it reflects a general concern of the international arbitration community,

given the increasing consolidation of arbitration as an effective means to solve commercial

disputes. As was explained with insight by a renowned British arbitrator:

“Traditionally, only national courts were empowered to grant interim or conservatory measures. The power to grant such measures was thought to be a prerogative of the courts because of public policy considerations. The national courts' power was supported by the perceived problems of enforcing provisional measures issued by an arbitral tribunal, and the fact that an arbitral tribunal did not have any coercive power to enforce its orders or award for these measures. However, in recent years, increasingly, national courts have come to see their role as supportive of the international arbitration process. This role owes much to the fact that arbitration as a dispute resolution mechanism has demonstrated its reliability. This role is reflected both in national legislation and in case law.”5

In this context, the role of the courts is naturally determined by the laws that they are called

to apply, as well as the underlying public policy towards international arbitration in their

respective countries. Both of these elements are surely influenced, in turn, by the reliability

of arbitration mentioned above, as sensed by the pertinent State.

4 An exception is Article 9 Ecuador’s Law on Arbitration and Mediation, whereby arbitrators can reach out to public authorities without going through the judge. The Ecuadorian case will be analyzed below. 5 Julian D.M. Lew, Commentary on Interim and Conservatory Measures in ICC Arbitration Cases, ICC International Court of Arbitration Bulletin Vol. 11 No. 1ICC International Court of Arbitration Bulletin Vol. 11 No. 1 (2000), pp 23-30, at 24.


The purpose of these lines is twofold. First, it measures the grade of reliability sensed by

certain Latin American jurisdictions by describing the status quo regarding enforcement of

provisional measures ordered by arbitral tribunals. Secondly, it aspires to contribute to the

evolution of this fascinating issue by proposing language de lege ferenda for countries that

have yet to legislate thereon. In doing so, it will also look into the applicability of the New

York Convention to decisions by arbitrators on provisional measures.

The first section of this article will assess the laws of Costa Rica, Ecuador, Mexico, and

Peru, which include provisions for the enforcement of provisional measures ordered by the

arbitrators (II). The subsequent section will provide an account of case law regarding the

possibility of applying the New York Convention to arbitral decisions on provisional

measures (III). A fourth section will raise aspects de lege ferenda that may be helpful for

countries in the region –and elsewhere—that have not yet accounted for this issue in their

respective commercial arbitration legislations, such as Brazil and Venezuela (IV).

Logically, conclusions will be drawn at the end.

This article will not describe or define provisional measures. There has been much written

on the subject, and the target goes beyond such considerations.6

II. Laws regulating provisional measures ordered by arbitral tribunals

A. Costa Rica and Mexico

Costa Rica passed the long-awaited International Commercial Arbitration Act on 25 May

2011. The text is, with the exception of two additional provisions (on arbitrability and

confidentiality), almost identical to the 2006 version of the UNCITRAL Model Law on

6 The 2006 version of the UNCITRAL Model Law on International Commercial Arbitration includes a description of the types of provisional measures in Article 17. For an exhaustive article on provisional measures, see Francisco González de Cossío, “Medidas precautorias en arbitraje”, Editorial Themis, Foro 14, XIII Congreso Nacional de Abogados, Barra Mexicana, Colegio de Abogados, A.C., 2011. See also by the same author, “Las medidas precautorias como garantía de efectividad en el arbitraje”, “Estudios sobre Garantías Reales y Personales, Libro Homenaje al Profesor Manuel Somarriva Undurraga, Editorial Jurídica de Chile, Santiago de Chile, tomo-II, 2009, p. 961. In the present article, the terms “provisional measures” and “interim measures” are equivalent.


International Commercial Arbitration (the “Model Law 2006”).7 For domestic arbitration

Costa Rica maintains its regime of 1997.

On its part, Mexico modified sections of its arbitration law on 27 January 2011, with a

reform of the Code of Commerce, which included several provisions of the section on

commercial arbitration. Mexico’s legislation is monist, so it applies to both, domestic and

international arbitration. Among other modifications8, special provisions for the

enforcement of arbitral tribunal decisions on provisional measures were included. The text

of such reform is the same as the text of Article 17H and 17I of the Model Law 2006,

which is also the text in the Costa Rican law. The first provision of both reads as follows:

“Article 17H. Recognition and Enforcement9 (1) An interim measure issued by an arbitral tribunal shall be recognized as binding and, unless otherwise provided by the arbitral tribunal, enforced upon application to the competent court, irrespective of the country in which it was issued, subject to the provisions of article 17 I. (2) The party who is seeking or has obtained recognition or enforcement of an interim measure shall promptly inform the court of any termination, suspension or modification of that interim measure. (3) The court of the State where recognition or enforcement is sought may, if it considers it proper, order the requesting party to provide appropriate security if the arbitral tribunal has not already made a determination with respect to security or where such a decision is necessary to protect the rights of third parties.”

The first paragraph establishes that the arbitral tribunal’s decision shall be deemed binding

and enforceable unless the arbitral tribunal has stated otherwise. The provision does not

refer to the form of the decision, so it is to be understood that the form is irrelevant, since

Article 17 of the Costa Rican law mentions “under a reasoned form.” In this particular

7 For a comprehensive assessment (and excellent critique) of the Model Law 2006 regime concerning the enforcement of provisional measures, see Jean-Baptiste Racine, « L’exécution des mesures provisoires ordonnées par un arbitre. L’éclairage du projet de la nouvelle loi type de la CNUDCI. », in « Les mesures provisoires dans l’arbitrage commercial international. Evolutions et Innovations », COLLOQUES ET DÉBATS (LexisNexis, LITEC), June 2006. 8 The reform includes what is in effect the adoption of the “éffet negatif” of the principle of compétence-compétence, as well as the elimination of “exequatur”, or recognition of arbitral awards before the enforcement stage. The reform also includes changes to provisions regarding procedure before ordinary courts unrelated to arbitration. 9 Taken from the official English version of Model Law 2006. In Mexico, Article 1479 of the Code of Commerce.


aspect, the Costa Rican law departs from the Model Law 2006, since Article 17(2) does not

qualify the arbitral tribunal’s decision on provisional measures. Law 8937 of Costa Rica

states that the decision must be reasoned, but it omitted the reference to “whether in the

form of an award or in another form”. In a similar way, the Mexican version of Article

17(2), Article 1433, does not describe the form the decision may take, which may also be

interpreted as giving freedom to the arbitral tribunal in that respect.10

It is important to point out is that the enforceability of provisional measures does not extend

to “preliminary orders” as established in the Costa Rican law, following the Model Law

2006.11 The preliminary orders under Articles 17B and 17C are granted on an ex parte

basis, for an initial period of 20 days. This part of the Model Law 2006 was not included in

the Mexican legislative reform.

The party requesting enforcement of the provisional measure must inform the judge

“without delay” of any revocation, stay or modification of such measure by the arbitral

tribunal. This provision should appease concerns of those who oppose enforcing awards

granting provisional measures because of their lack of finality, or their provisional nature.

However, it is striking that the burden is placed on the claimant and not on the defendant of

the measure, contrary to the logic of the New York Convention. As will be shown below,

should the measure be revoked or stayed, the enforcement judge may deny enforcement.

Finally, the judge may order the requesting party to deposit “an adequate security”. Here, a

second burden is placed –or may be placed-- on the requesting party. In a certain way, the

judge may second-guess the arbitral tribunal’s decision.

10 It is noteworthy that both laws departed from the Model Law’s language “whether in the form of an award or in another form”. 11 It is hard to understand why these orders, whose effectiveness is essential per se, are not enforceable according to the Model Law 2006. It is said by most authors and practitioners –as well as the UNCITRAL working group—that this would be going too far, essentially since arbitration is a consensual process (see Jean-Baptiste Racine, « L’exécution des mesures provisoires ordonnées par un arbiter. L’éclairage du projet de la nouvelle loi type de la CNUDCI. », in « Les mesures provisoires dans l’arbitrage commercial international. Evolutions et Innovations », COLLOQUES ET DEBATS (LexisNexis, LITEC), June 2006, p. 10). Although this subject goes beyond the scope of the present article, I must state that I disagree with this view. Consent is required to take the dispute to arbitration, but the dispute exists, and the parties are litigating. Indeed, oftentimes the parties do not even agree on the language of the arbitration!


The second provision relates to the grounds for refusing enforcement of the decisions

granting provisional measures. It establishes the following:

“Article 17 I. Grounds for refusing recognition or enforcement12 (1) Recognition or enforcement of an interim measure may be refused only: (a) At the request of the party against whom it is invoked if the court is satisfied that: (i) Such refusal is warranted on the grounds set forth in article 36(1)(a)(i), (ii), (iii) or (iv); or (ii) The arbitral tribunal’s decision with respect to the provision of security in connection with the interim measure issued by the arbitral tribunal has not been complied with; or (iii) The interim measure has been terminated or suspended by the arbitral tribunal or, where so empowered, by the court of the State in which the arbitration takes place or under the law of which that interim measure was granted; or (b) If the court finds that: (i) The interim measure is incompatible with the powers conferred upon the court unless the court decides to reformulate the interim measure to the extent necessary to adapt it to its own powers and procedures for the purposes of enforcing that interim measure and without modifying its substance; or (ii) Any of the grounds set forth in article 36(1)(b)(i) or (ii), apply to the recognition and enforcement of the interim measure. (2) Any determination made by the court on any ground in paragraph (1) of this article shall be effective only for the purposes of the application to recognize and enforce the interim measure. The court where recognition or enforcement is sought shall not, in making that determination, undertake a review of the substance of the interim measure.”

This provision follows a similar approach to that of Article V(1) of the New York

Convention and Article 36 of the Model Law, which in Mexico is transcribed in Article

1462(I) of the Commercial Code. In the first section, the enforcing judge may deny

“recognition or enforcement” if, from the submissions of the requesting party, it transpires

that one of the four grounds for denying enforcement of foreign awards is present (in short,

that the arbitration agreement is invalid or the parties do not have the capacity to enter into

such an agreement, that there is a violation of due process, that the arbitration proceeded

without conforming to the parties’ agreement, or that the decision deals with matters that go

beyond the scope of what was requested). 12 Taken from the official English version of Model Law 2006. In Mexico, Article 1480 of the Commercial Code.


Should any of these grounds be raised by the defendant, it means that the enforcing judge

will have to determine issues that go way beyond the scope and purpose of enforcing

provisional measures. Whether the arbitral tribunal was constituted in accordance with the

parties’ agreement or whether one of the parties alleges lack of legal capacity, for example,

are issues are to be left to other judges, whether it be the annulment judge, the enforcing

judge of the award, or even the arbitral tribunal. Otherwise, the purpose of providing for the

enforcement of provisional measures is defeated.

Additionally, and similar to the fifth ground in Article V(1) of the New York Convention,

the enforcing judge may deny enforcement if the order has been revoked or stayed by either

the arbitral tribunal or a judge from the state where it was rendered or the state of the law

according to which it was rendered. It is interesting to note that the provision ignores other

states where the enforcement of the measure could be sought because of the location of

additional goods of the debtor. A sign that over-regulation is sometimes dangerous. Finally,

the first section allows the enforcing judge to deny enforcement if the security that has been

requested by the arbitral tribunal has not been deposited. This, on the contrary, is clever

regulation.

Section two includes grounds that the judge may raise ex officio, which are a) if the

measure is incompatible with the measures it is entitled to take under its own legislation,

unless it can adapt them, b) the grounds under Article V(2) of the New York Convention,

namely that the subject of the arbitration is not “arbitrable” according to the respective

legislation and that the decision violates public policy. These grounds are found in Article

1462(II) of the Mexican law.

The subsequent paragraph establishes that the decisions of the enforcement judge are only

applicable to the enforcement of the provisional measures. This appears to be a “without

prejudice” statement. It also provides that the judge’s assessment cannot go into the merits

of the decision, which is also a welcome statement.

One aspect of both provisions is worth mentioning. While the first paragraph of Article

17H establishes the notion that decisions on provisional measures should be recognized as

valid, thereby giving the idea that there is no need for an exequatur-type decision, or


homologation, the subsequent paragraphs in both Articles 17H and 17I, speak of

“recognition”. This same approach is taken by Articles 35 and 36 of the Model Law. The

need to use that notion is questionable, since “enforcement” should have sufficed.13

Another aspect of the Model Law 2006 that the Mexican statute imported was the

equivalent of Article 17G, which the Costa Rican statute also included. It provides that any

damages caused by the provisional measures shall be compensated by the requesting

party.14 In Mexico, it was slightly modified to include liability by the arbitral tribunal:

“The party requesting an interim measure, as well as the arbitral tribunal granting it, are liable for any costs and damages caused by the measure.”15 (Emphasis added.)

This has been acutely described as “the fly in the ointment”.16

Although optimists should expect that the Achilles’ heel of the Mexican reform does not

dissuade parties from requesting interim measures against their Mexican opponents, at the

very least they can expect that the criteria for granting them will be rather stringent.

B. Ecuador

Ecuador’s law on arbitration dates from 1997 and it regulates both, domestic and

international arbitrations. On provisional measures, the Ecuadorian law goes as far as

13 This same point was raised in the drafting sessions. See UNCITRAL Working Group session A/CN.9/WG.II/WP.125: “As a matter of drafting, it was suggested that paragraph (2) of the revised draft could omit the words “recognized and” since recognition was implied in enforcement. However, concern was expressed that both these terms should be included for the sake of consistency with other draft provisions as well as articles 34 and 35 of the UNCITRAL Model Law (A/CN.9/524, para. 34). The revised text appears to make this concern redundant.” 14 “Article 17 G. Costs and damages. The party requesting an interim measure or applying for a preliminary order shall be liable for any costs and damages caused by the measure or the order to any party if the arbitral tribunal later determines that, in the circumstances, the measure or the order should not have been granted. The arbitral tribunal may award such costs and damages at any point during the proceedings.” Numerous legislations provide liability against the requesting party for damages caused to the party against whom the measure is ordered. See UNCITRAL Working session A/CN.9/WG.II/WP.127 for a description of the legislations of 10 jurisdictions. 15 Original in Spanish: “De toda medida cautelar queda responsable el que la pide, así como el Tribunal Arbitral que la dicta, por consiguiente son de su cargo los daños y perjuicios que se causen.” Free translation. 16 Translation from “el pelo en la sopa”, in Francisco González de Cossío, “La Modificación a Derecho Comercial Mexicano – Un Comentario”, www.gdca.com.mx, p. 6.


allowing arbitral tribunals to enforce their own decisions, subject to the agreement of the

parties. Article 9 of the statute establishes the following:

“Interim Measures Art. 9.- Arbitrators may order interim measures, in conformity with the provisions of the Code of Civil Procedures or provisions considered necessary for each case, in order to either ensure the material goods of the proceedings or to guarantee the result thereof. Arbitrators may require a security to the party requesting the measure, with the purpose of covering both the cost of such measure and damages to the opposing party should the claim be dismissed in the award. The party against whom the interim measure is ordered may request a stay of the measure if it provides a sufficient security to the arbitral tribunal. Upon agreement of the parties in the arbitration agreement, for the enforcement of interim measure arbitrators shall require the necessary assistance of public, judicial, police and administrative officers, without having to turn to the judge of the place of the goods or the place where the measures are required to be carried out. If the arbitration agreement is silent on the enforcement of interim measures, either party may request ordinary judges to order the enforcement of such measures, subject to paragraphs two (2) and three (3) of this article, without this being deemed a waiver to the arbitration agreement.”17

The Ecuadorian ingenious solution probably finds its origin in the Colombian statue on

arbitration, which is currently under reform.18 The arbitral tribunal’s authority to directly

call on the ordre public however, relies on the arbitration agreement. Should there be no

specific agreement by the parties on confirming such authority, enforcement must be

sought before the state courts. Not a word on how the courts should deal with such requests

or on the form the arbitral tribunal’s decisions may take. In addition, it is not clear whether

arbitrators sitting abroad may exercise that power (subject to the agreement of the parties).

This starkness contrasts with the overly-detailed of Model Law 2006 (and, as we will see

below, the Peruvian case). The reference in the first paragraph of Article 9 refers to the

Code of Civil Procedures, which reflects a very direct “loan” from the civil procedure

regime for provisional measures. This probably means that, in enforcing arbitral tribunal

17 Free translation. 18 Article 159 of Colombian Decreto 1818 provides that an arbitrator may inter alia order the property registrar directly to register the claim when the case concerns a dispute regarding chattel. Given the very limited scope this provision has in practice, it will not be discussed in the article.


decisions, the judges will simply apply their own rules and criteria. With such little room

for imagination and, therefore, error, this simple yet original regime should function

effectively. There are no reported judicial decisions of enforcement of provisional measures

ordered by arbitral tribunals in international commercial arbitration cases19, although

parties to domestic agreements generally include a standard clause whereby they grant the

arbitrators such power to enforce their own decisions on provisional measures.20

C. Peru

The latest law on arbitration in Peru is from 2008. Since its predecessor of 1996, Peruvian

legislation on arbitration has drawn attention in the region because of its attempt to

establish an autonomous system, independent from the Peruvian judiciary.21 Following that

purpose, Article 48 of the General Arbitration Act establishes that arbitrators may enforce

provisional measures themselves, with or without support from the force public. Parties,

however, are also free to seek enforcement from a competent judge.

The first part of Article 48 presumably deals with measures ordered by arbitral tribunals

sitting in Peru22:

“Article 48º.- Enforcement of provisional measures ordered by the arbitral tribunal 1. The arbitral tribunal is empowered to enforce, upon a party’s request, its own provisional measures, unless at its sole discretion it deems necessary or convenient to require assistance from the force public. 2. When the party against whom the measure is ordered does not comply, or when judicial enforcement is required, the interested party shall make an application to the competent judicial authority, who, with the sole verification

19 Although there are no cases in international commercial arbitration, the local courts’ deference to an arbitral tribunal’s decision on provisional measures was tested in ICSID case No. ARB/06/21 City Oriente Limited vs. República del Ecuador and Empresa Estatal de Petróleos del Ecuador Petroecuador. In that case, the arbitral tribunal issued a “recommendation” on 19 November 2007 for the State to abstain from or cease to initiate proceedings against claimant in Ecuador. Concurrently, the Ecuadorian prosecutor’s office initiated certain criminal proceedings against some of the company’s officers. The “Corte Nacional de Justicia” declared such actions null and void in view of the ICSID tribunal’s decision. 20 Ecuadorian practitioners Xavier Andrade and Juan Manuel Marchán informed the author that this practice has proven to be effective. 21 See, e.g., José Carlos Fernández Rozas, “La nueva Ley de arbitraje peruana de 2008”, in Arbitraje: Revista de Arbitraje Comercial y de Inversiones, 2008, pp. 783-788. 22 Article 47 provides that the decision may or may not take the form of an award.


of a document revealing the existence of the arbitration and the provisional measure, shall enforce the measure without allowing any appeal or objection. 3. The judicial authority is not competent to interpret the content or the scope of the provisional measure. Any request for clarification or correction of the measure or the enforcement thereof shall be made by the judicial authority or the parties to the arbitral tribunal. Once the measure is enforced, the judicial authority shall notify the arbitral tribunal and provide a certified copy of the file.”23

Paragraph 1 seems firsthand quite potent; however, paragraphs 2 and 3 weaken it, since

they virtually establish a second step to arrive at a final enforcement of a measure. Indeed,

if application to the judicial authority is foreseen for cases when the party “does not

comply” or “when judicial enforcement is required”, the utility of the first paragraph is

difficult to see. In fact, in practice, when the arbitral tribunal orders a provisional measure,

it is enforcing it by virtue of its own authority. This provision therefore does not add

anything. Rather, it might be confusing, since it seems that access to the competent judge is

available only after the arbitral tribunal has made an attempt to “enforce” its measures,

upon a submission from the requesting party.

The second part of the same provision seems to apply to measures ordered by arbitral

tribunals sitting outside of Peru:

“4. Any interim measure ordered by an arbitral tribunal which place is located outside the Peruvian territory shall be recognized and enforced in the national territory, in application of the provisions of Articles 75, 76 and 77, with the following qualifications: a. A request for recognition may be denied only for grounds a, b. c and d of

paragraph 2 of Article 75 or when point d of the present paragraph is not complied with.

b. The party requesting recognition of the interim measure shall submit an original or copy of the decision of the arbitral tribunal, having due regard to Article 9.

c. The terms provided for in paragraphs 2 and 3 of Article 76 shall be ten (10) days.

d. The judicial authority may order the requesting party to post an adequate security, if the arbitral tribunal has not decided on such security or when the security is necessary to protect the rights of third parties. Failure to comply will allow the judicial authority to deny the request for recognition.

23 Free translation.


e. The judicial authority charged with the enforcement of the interim measure may deny the request in cases where the interim measure is incompatible with its capacity, unless it decides to reformulate the measure in order to adjust it to its own capacity and procedures so as to ensure enforcement, without modifying its content and its nature.”24

Article 75(2) of the Peruvian Arbitration Law is the equivalent of Article 36 of the Model

Law and V of the New York Convention, which means that the grounds are the same as the

Costa Rican and Mexican laws. Therefore, the issues raised in the respective subsection

above apply. Article 76 establishes the procedural rules for recognition of awards, while

Article 77 refers to the rules of civil procedure for enforcement before the competent court.

Otherwise, Article 48(4)(d) begs the same comment as expressed above, and 48(4)(e) is a

provision that allows the judge to adapt a ruling of an arbitrator that would otherwise be

incompatible with its competences. This provision shows a regime truly supportive of

international arbitration.

Unfortunately, the analyses just made are constrained to the language of the provisions

since there are no reported cases in Costa Rica, Mexico, Peru or Ecuador that have put to a

test the different provisions of those jurisdictions. It will certainly be interesting to read the

interpretation of the courts of these novel articles, which will depend more on the parties’

attorneys’ mastery than the plain words of the laws, as is usually the case.

For parties seeking enforcement of provisional measures ordered by arbitral tribunals in

countries that do not have specific legislation on the subject, an obvious approach is to

invoke the New York Convention. This will be addressed at present.

III. Application of the New York Convention to decisions ordering interim measures

In countries lacking a specific mechanism for the enforcement of provisional measures

dictated by arbitral tribunals, a solution is to enforce them using the same rules that are

applied for the enforcement of awards. Several questions arise in this regard.

24 Free translation.


In international arbitrations involving parties of nationalities different from that of the place

of arbitration there are two possibilities: a) the provisional measure must be enforced in the

place of arbitration, or b) the provisional measure must be enforced in a place outside the

place of arbitration. This section will focus on the second hypothesis, which means that the

discussion will regard enforcement of foreign decisions applying the New York

Convention.

A note, however, about the first hypothesis is useful before proceeding. Some State laws

governing international commercial arbitration include the provision in Article 35(1) of the

Model Law, which reads as follows:

“Article 35. Recognition and enforcement

(1) An arbitral award, irrespective of the country in which it was made, shall be recognized as binding and, upon application in writing to the competent court, shall be enforced subject to the provisions of this article and of article 36.” (Emphasis added).

Since Article 36 of the Model Law is identical to Article V of the New York Convention,

the analysis in this section will be applicable to both, decisions made in the place of

arbitration and decisions made outside the place of arbitration.

The key issue that will be discussed is essentially whether decisions on provisional

measures may be qualified as “arbitral awards” under the New York Convention (and

Article 36 of the Model Law). First, a description of the case law and prevailing views in

Latin America will be made (A), followed by an overview of three international cases and

European scholarly opinions (B).

A. Are decisions ordering provisional measures considered “arbitral awards” in the terms of

the New York Convention in Latin America?

One could think that the simplest approach to answer that question is the formalistic

approach, according to which if the arbitral tribunal chooses to order a provisional measure

in the form of an award the decision should be enforced according to the New York

Convention. This would be particularly pertinent if the arbitration is governed by any of the


rules or laws that allow the arbitral tribunal to decide what form the award should take.25

Indeed, one would think that the option should be of consequence.

Arbitrators may consider that the circumstances of a particular case call for one form over

another. One can think of the difference between affecting the parties’ procedural rights

(for example, ordering a party to protect evidence) and affecting the parties’ contractual or

substantive rights (for example, ordering a party not to call on a bank guarantee). For

concerns of speediness and effectiveness, arbitrators may prefer deciding the first type of

measures in the form of procedural orders and the second type by awards. Otherwise, why

would rules and laws offer a choice to arbitrators?

However, it seems that in Latin America the form chosen by the arbitrators is of little or no

relevance in the determination of whether a decision should or should not be enforced.

There is only one reported court decision regarding the enforcement of a decision on

provisional measures in Latin America, and it is evident from it that the court was oblivious

to the arbitrators’ choice of form.

In that case26, Western Technological Services International Inc. sought to enforce in Chile

the decision of an arbitral tribunal sitting in Dallas, Texas under the auspices of the

American Arbitration Association that ordered Cauchos Industriales S.A. to refrain from

competing against it. The order was to remain in force as long as the arbitral tribunal did

not render a different decision or the parties did not agree otherwise. The Chilean Supreme

Court of Justice denied enforcing the decision. Although the arbitral tribunal’s order was

not rendered in the form of an award, this was apparently not a factor in the court’s

analysis.

The Chilean Supreme Court sought to determine whether, under Chilean law, the decision

was an “award” of the kind that could be enforced under the New York Convention, the

local international arbitration law, and the local procedural rules.27 The Supreme Court

25 Article 23(1) of the ICC Rules and Article 21(2) of the AAA International Arbitration Rules, for example. 26 Supreme Court, Rol N° 5.468-09. 27 Decisions in Chile on enforcement of arbitral awards are not solely taken on the basis of the New York Convention. They include references to the statute on international arbitration and to the Code of Civil Procedures. See Dyalá Jiménez Figueres and Gonzalo Fernández, "La evolución de las normas de exequátur


turned to Article 158 of the Code of Civil Procedures to determine whether the arbitral

decision was any of the following: a) a final decision, b) an interlocutory decision that

establishes a permanent right in favor of a party, or c) an interlocutory decision preparatory

of a final decision and that allows the proceedings to go forward.28

The Supreme Court found that the decision did not fit into the categories mentioned above,

since the arbitral tribunal itself had qualified the decision as a temporary one by

establishing that the order was valid as long as it did not decide otherwise, and also because

“precautionary measures are essentially provisional”. As a final consideration it added that,

should the measure be maintained “in time”, it would be equivalent to determining some of

the main claims sought by plaintiff in the case.

It appears that the concerns of the Supreme Court were contradictory: a) the fact that the

decision could be modified during the arbitration but, should it be maintained, b) the fact

that it virtually decided on the main claims sought in the arbitration.

What is also odd about the reasoning followed by the Supreme Court is that in Chile

provisional measures by judges are taken in the form of decisions of the type b) above, and

they are enforced as “provisionally final”, which means that they have the effects of “cosa

juzgada formal provisional”. This means that a decision from a foreign arbitral tribunal

ordering a provisional measure has a lesser rank than a local judge decision ordering a

provisional measure. Does this not go against the spirit of Article III of the New York

Convention?29

Although the only reported case in Latin America regarding specifically the enforcement of

a provisional measure is the Chilean case, a Colombian case sheds some light as to the

judicial stance in that country on the subject. In Merck et al v. Tecnoquímicas, the

de laudos extranjeros en Chile", in ARBITRAJE COMERCIAL Y ARBITRAJE DE INVERSIÓN, Vol. 2, Carlos A. Soto Coaguila (Director), (Instituto Peruano de Arbitraje, 2009). 28 These decisions are called “sentencias”. The other decisions are “autos”, or orders that decide on incidental matters not falling in the definition of interlocutory decisions, and “decretos” or resolutions that serve to prepare for the final decision and regard the organization of the proceedings. 29 According to UNCITRAL: “The Convention's principal aim is that foreign and non-domestic arbitral awards will not be discriminated against and it obliges Parties to ensure such awards are recognized and generally capable of enforcement in their jurisdiction in the same way as domestic awards.” See http://www.uncitral.org/pdf/english/texts/arbitration/NY-conv/XXII_1_e.pdf .


Colombian Supreme Court of Justice denied enforcing an Interim Award on Jurisdiction in

which the sole arbitrator determined inter alia that respondent should abstain from

continuing actions against the arbitration agreements. The Colombian Supreme Court found

that the award did not meet the requirements of an “arbitral award” under the New York

Convention because it did not finally determine questions of merit. To reach that

conclusion, it interpreted Article I(1) of the New York Convention as restricting the term

“award” to decisions originating in the (substantive) differences between persons. The so-

called Interim Award was, in the eyes of the Colombian Supreme Court, a mere order that

could be modified by the arbitrator at a later stage. This same line has been followed in

subsequent cases of enforcement of awards.

Colombian author Eduardo Zuleta agrees in that, in order to qualify for an “arbitral award”

in the terms of the New York Convention, a decision must be final on the matter that it

determines. Under this definition, only partial or final awards would qualify, and orders that

may be modified by the arbitral tribunal would be excluded from the category of “awards”,

as well as decisions that serve to advance the proceedings or that are mere

recommendations.30

A. The view on the subject by authorities abroad

The formalistic approach has not been used by courts abroad either. Thus, while on its face

“[t]he main distinction between an interim/partial award and an order is that the award can

be enforced under the New York Arbitration Convention 1958 whereas there is no such

enforcement regime for enforcement of the order”31, courts do not defer to the arbitrators’

choice. As Italian professor and arbitrator Piero Bernardini clearly exposed:

“When a decision regarding interim measures may be taken in the form of an arbitral award, such award may be recognized and enforced by virtue of the New York Convention of 1958 […] (subject to the acceptance by the courts

30 Eduardo Zuleta, “¿Qué es una sentencia o laudo arbitral? El laudo parcial, el aludo final y el laudo interino”, El Arbitraje Comercial Internacional. Estudio de la Convención de Nueva York con motivo de su 50° aniversario, Guido S. Tawil y Eduardo Zuleta (Directores), Abeledo-Perrot (2008), 50-68, at 58, 66. 31 Julian D.M. Lew, “Commentary on Interim and Conservatory Measures in ICC Arbitration Cases”, ICC International Court of Arbitration Bulletin Vol. 11 No. 1 (2000), 23-30, at 28.


of those jurisdictions that it concerns a true arbitral award despite its temporary and revocable nature).”32 (Emphasis added.)

Courts in the United States and Europe have been consistent with UNCITRAL itself. At its

session A/CN.9/WG.II/WP.138, the UNCITRAL Working Group on the 2006 revision of

the Model Law noted the following:

“Paragraph (2) Chapeau—‘whether in the form of an award or in another form’ 8. After discussing the form in which an interim measure might be issued by an arbitral tribunal, the Working Group reiterated its decision not to modify the chapeau of paragraph (2) (A/CN.9/547, paras. 70-72). The Working Group agreed that any explanatory material to be prepared at a later stage, possibly in the form of a guide to enactment of draft article 17, should make it clear that the wording used to describe the form in which an interim measure might be issued should not be misinterpreted as taking a stand in respect of the controversial issue as to whether or not an interim measure issued in the form of an award would qualify for enforcement under the New York Convention (A/CN.9/547, para. 72).” (Internal footnotes omitted. Emphasis added.)

Given the aforementioned, it is clear that enforceability (and/or “annulability”) of the

decision is the least of the factors that arbitral tribunals need to consider in deciding what

form the decision on provisional measures must take.

Disregarding the form, what conditions must decisions ordering provisional measures have

in order to be enforced under the New York Convention in countries outside Latin

America?

32 Free translation. Original in French: « Chaque fois qu’une décision relative a des mesures conservatoires peut être rendue en la forme d’une sentence arbitrale, cette sentence pourrait être reconnue et exécutée en vertu de la Convention de New York de 1958 [...] (sous réserve de l’ acceptation par les cours de ces pays qu’il s’agit d’une véritable sentence arbitrale à dépit du caractère temporaire et révocable de la décision). » Piero Bernardini, , « L’arbitre international et les mesures conservatoires », Revista de Arbitragem e Mediacao, Ano 2, No. 5 (2005), 116-122, at 121. Albert Jan van den Berg considers, however, that the standard should be set at the place of arbitration: “I maintain my opinion that an arbitral award providing for interim relief can be enforced under the Convention, provided that an arbitral decision providing for interim relief constitutes an arbitral award at the place of arbitration.” See, “The Application of the New York Convention by the Courts”, ICC Congress series 9 (2003), p. 29. I disagree, since the enforcing judge naturally applies its lex fori, and the award will produce effects precisely in that forum. Reference to the place of arbitration in Article V of the New York Convention is made regarding the validity or binding nature of the award. This approach was taken by the courts in Chile and Colombia in the cases discussed above.


From the discussion that follows, there appears to be a consensus in that a decision must be

“final” in order for it to be enforced under the New York Convention. Three cases will be

discussed: a 1993 decision from the Supreme Court of Queensland Australia, a decision

from the Court of Appeals of the Seventh Circuit of the United States in 2000, and a recent

decision from the Swiss Federal Court.

1. Resort Condominiums International Inc. v. Bolwell & Anor. (Australia)

The first decision concerns a US company (“RCI”) that was in the business of providing

resort time sharing interests worldwide against its licensee in Australia (“RCIA”) and

RCIA’s managing director and principal (“Bolwell”).33 The parties entered into a License

Agreement in 1986, according to which among other commitments RCI provided

trademarks and expertise to RCIA and Bolwell to develop the business in Australia, New

Zealand, Fiji, and Tahiti. RCIA and Bolwell in turn paid certain royalties to RCI among

other obligations.

Disputes arose between the parties and, in February 1993, RCI requested and obtained

injunctive relief from the Indiana State Court, which issued a temporary restraining order

essentially requiring RCIA and Bolwell to provide information on financials and payments,

as well as ordering discovery. Four days later, RCI terminated the License Agreement. In

March, RCI filed a request for arbitration before the American Arbitration Association.

In March of that year respondents removed the matter to a Federal court, while in June the

arbitrator held a preliminary hearing. Respondents’ counsel appeared only to state that he

would no longer participate in the proceedings. In July, the Federal court issued an order

for preliminary injunctive relief against respondents and 14 related companies, requiring

them to basically comply with the License Agreement, including enjoining from entering

into agreements with companies other than RCI, as well as prohibiting them from

instituting any proceeding different from the arbitration proceedings. Two days later, the

33 For a complete account and commentary of the decision, see Michael Pryles, “Interlocutory Orders and Convention Awards: the Case of Resorts Condominiums v. Bolwell”, Arbitration International, (Kluwer Law International 1994 Volume 10 Issue 4), 385 - 394.


arbitrator issued an “Order and Award” only against RCIA and Bolwell similar to the order

issued by the judge, with additional discovery. Both orders are of an interlocutory nature.

RCI applied to the Supreme Court of Queensland for enforcement of the arbitrator’s “Order

and Award”, who denied the request. In the court’s view the New York Convention only

applies to arbitral awards that finally resolve one or more disputes in the arbitration. The

court stated:

“Article I(1) [of the New York Convention] provides that an ‘arbitral award’ must be an award ‘arising out of differences between persons whether legal or physical’. Article I(3) provides a further pointer to the fact that recognition and enforcement of awards applies only to awards with respect to ‘differences’ arising out of legal relationships, even though that sub-article allows a particular type of declaration to be made. ‘Differences’ within the meaning of cl. 15.1 of the License Agreement and within the meaning of the Convention clearly refer to the subject matter of the dispute referred by the parties to arbitration for resolution, rather than to some interlocutory or procedural direction or order which does not resolve the disputes referred.”

The Supreme Court of Queensland also indicated that awards that could enjoy the benefit of

the New York Convention were awards that “determine rights”. The court interpreted the

New York Convention in light of the laws of Queensland and also gave emphasis to the

“finality” of the award. Thus, according to the Supreme Court of Queensland an award

must deal with differences between the parties regarding the subject matter of the dispute,

must determine rights, and must do so in a final form, not in a temporary or interlocutory

fashion.34

This decision has been qualified as “thoroughly logic”35 and having “strong logic”36 by

international scholars. An otherwise cautious commentator did agree with the end result.37

There is an apparent consensus that an award having temporary effects is of a lesser value

34 The Supreme Court of Queensland found that it could delve into grounds and reasons for denying enforcement beyond those established in Article V of the New York Convention. This was met with strong criticism and led to a clarification in the Australian implementing legislation. 35 Jean-Francois Poudret and Sébastien Besson, COMPARATIVE LAW OF INTERNATIONAL ARBITRATION (Thomson, Sweet & Maxwell, Second Edition), para. 640. 36 W. Laurence Craig, William W. Park, Jan Paulsson, INTERNATIONAL CHAMBER OF COMMERCE ARBITRATION, Oceana Publications Inc. (Third Edition, 1998), p. 466. Qualified as such to (wisely) caution that “it would not be prudent to rely on the enforceability by national courts of such decisions as awards.” 37 Michael Pryles, “Interlocutory Orders and Convention Awards: the Case of Resorts Condominiums v. Bolwell”, Arbitration International, (Kluwer Law International 1994 Volume 10 Issue 4), 385 – 394, at 395.


than awards with final effects. International arbitrator Michael Pryles could not have said it

better:

“One might, of course, argue that the enforcement machinery of the New York Convention should be used as extensively as possible. Following this reasoning it could be contended that the New York Convention should be given a broad operation and should extend to awards of a procedural nature or interlocutory in character which can be subsequently varied by the arbitrator. This would certainly assist international arbitrations but it must be doubted whether the drafters of the New York Convention intended to cast their net thus far.”38

We will never know whether the drafters meant to include awards on provisional measures

within the scope of the New York Convention because it was not discussed in the sessions

that led to the 1958 convention. There are arguments that support such an interpretation, as

will be shown below.

However, as far as the Queensland decision, it is difficult to see how the arbitrator’s

decision a) does not concern the dispute between the parties, and b) does not determine

rights. Granted, it does not do so in a final form, but if the New York Convention gives the

enforcing courts discretion to enforce awards that are annulled or against which annulment

is pending, why cannot enforcing judges recognize an interim measure? Why should

enforcing judges second-guess arbitral tribunals, is that not against the purpose of the New

York Convention? Further, if an interim measure is revoked or modified, cannot the

decision that revokes or modifies it be in turn later enforced? Are not interim measures of

protection ordered by courts enforced in local jurisdictions?

2. Publicis Communication v. True North Communications, Inc. (United States)

The parties entered into a joint venture agreement in 1989, which they terminated in 1997.

The parties agreed to submit all the issues and disputes arising from the dissolution of the

joint venture (save one issue that is irrelevant to the dispute) to LCIA arbitration with seat

in England. In said arbitration, the US party True North Communications, Inc. (“True

North”) requested and obtained an order against French company Publicis Communication

38 Michael Pryles, “Interlocutory Orders and Convention Awards: the Case of Resorts Condominiums v. Bolwell”, Arbitration International, (Kluwer Law International 1994 Volume 10 Issue 4), 385 – 394, at 394.


(“Publicis”) to submit all tax information from 1994 to 1996. Publicis did not abide by the

order, so True North sought to enforce it. It first asked and obtained confirmation of the

arbitral award from the Northern District of Illinois.

Publicis appealed, and the Court of Appeals for the Seventh Circuit39 was requested to

review the lower court’s order to determine essentially whether the arbitral tribunal’s order

was final: “resolving this case actually requires determining only whether or not this

particular order by this particular arbitration tribunal regarding these particular tax records

was final.” Along the lines of other tribunals, the Court first stated that “it is the content of

a decision-not its nomenclature-determines finality.” But what is “finality”?

The Court found that the order was final grounded on the decision's “substantive intent to

create immediate action”, especially since there was a deadline within which Publicis had

to hand in the documents. The fact that the matter decided in the order was separate,

discrete and self-contained, severable from the other issues in dispute was also taken into

account by the court in granting the request. One could wonder whether an order similar to

the Chilean case (not to compete) or to sections of the order in the Australian case would be

considered “discrete” or “severable from the issues in dispute” by US courts, since the

orders entail actions (or inactions) that are intimately related to the claims in dispute.

Since this year 2000 decision was not that court’s first case, it is worth looking at Yasuda

Fire & Marine Insurance Company of Europe v. Continental Casualty Company four years

earlier.40 That case revolved around a dispute between an insurance company and a reinsurance

company and concerned in particular an order against plaintiff to post a letter of credit in an amount

that exceeded USD 2,500,000. Since the claim was essentially for payment of monies, it is

difficult to state that posting a money guarantee is entirely “discrete” or “severable”. In that

case, the court relied on Pacific Reinsurance v. Ohio Reinsurance, from a different court41:

“[T]he court reasoned that ‘[g]iven the potential importance of temporary equitable awards in making the arbitration proceedings meaningful, court enforcement of them, when appropriate, is ... essential to preserve the integrity

39 206 F.3d 725 (7th Cir. 2000). Publicis in the meantime had turned in the tax information, but the court decided to rule on the matter to preempt any future disputes between the parties regarding arbitral orders. 40 37 F.3d 345 (7th Cir.1994). 41 935 F.2d 1019, 1023 (9th Cir.1991).


of ... [the arbitration] process.’ Id. More precisely, the court held that ‘temporary equitable orders calculated to preserve assets or performance needed to make a potential final award more meaningful ... are final orders that can be reviewed for confirmation and enforcement by district courts under the FAA.’ (Citations omitted).”

Clearly, the notion of “finality” in the United States federal cases is quite different than in

Australia or, for that matter, in Chile and Colombia. It entails certain “independence” of the

issues decided, the binding nature of the decision, and the qualification hinges also on

considerations of pure effectiveness. While the outcome is commendable, the logic behind

these decisions is far from pure. It seems rather forced to have the determination grounded

on “finality” if “finality” is defined in terms which meaning is far from the common

meaning of the word “final”.

3. Company X, SA v. Company Y, BV (Switzerland)

In 2008, Dutch company Y (“Y”), owner of brand A, and Swiss company X (“X”) entered

into a License Agreement whereby the latter was to sell clothing of A brand in select stores

in Europe. Disputes arose between the parties early on, and in 2009, upon disagreements

between the parties as to certain stock of brand A clothing in the hands of X, X filed for

arbitration according to the Rules of the WIPO, who appointed a sole arbitrator to

determine the matter.

Y filed counter-claims and requested an interim measure ordering X to either transfer the

goods or put them in consignment, until the rendering of the final award. Shortly after the

hearing on provisional measures, the arbitrator rendered an interim award in which it

ordered X to transfer the goods of brand A to Y, fixed the modalities of such transfer, and

ordered Y to pay X certain sums of money (equivalent to what X had asked Y to pay for the

stock).

X filed for essentially the annulment of the interim award, alleging that the arbitrator had

decided extra petita, in violation of due process, and against public policy. The First

Chamber of the Tribunal Federal Suisse determined that it could not annul the decision

because it did not constitute an award in terms of Swiss law on international arbitration

(Articles 190-192 of the Private International Law Statute). Since this was a first case


concerning an arbitral tribunal’s decision on provisional measures, the Swiss court relied

entirely on scholarly opinions from Swiss scholars. It concluded that, according to such

authorities, a decision on provisional measures is not a final decision, a partial decision, or

an “incidental” or “pre-judicial” decision and, therefore, cannot be annulled or reviewed by

courts. For that reason, it dismissed the annulment and upheld the decision.

Though not exactly on point, this decision is telling of a strong Swiss position regarding

decisions on provisional measures. There is consensus among Swiss scholars –now

validated by the Federal Court—that a decision on provisional measures is not an award, at

least not of the kind enforceable under the New York Convention.

Does this mean that all hope is lost if one were to seek provisional measures against a

Swiss opponent? The strong opposition to equating arbitral decisions on provisional

measures to awards is compensated with Article 183 of the Private International Law Act,

which allows that arbitral tribunal to be “assisted” by local courts should there be a

recalcitrant party. Article 183(2) of the Private International Law Statute provides that the

arbitral tribunal may request the competent court for assistance in the enforcement of the

measure. According to Swiss scholars Poudret and Besson, the predominant opinion is that

Swiss courts are able to entertain requests from arbitral tribunals sitting outside of

Switzerland, provided “[…]that the foreign arbitration law also allows the arbitrators

themselves to request the intervention of the courts[…]”.

Before moving to the next section, a word or two must be noted regarding the Swiss

position. According to Poudret and Besson, the New York Convention was not meant for

awards ordering provisional measures, for two main reasons. The first is that the “binding”

nature of the award as expressed in Article V(1)(e) “indicates that whatever interpretation is

given to this term, the authors did not envisage that the decision of an arbitrators [sic] could

be questioned by a subsequent decision, and that is precisely an essential characteristic of

provisional measures.”42 The second is that an interpretation to the contrary would be

inconsistent with the system of the New York Convention, since Article II(3) of the New

42 Jean-Francois Poudret and Sébastien Besson, COMPARATIVE LAW OF INTERNATIONAL ARBITRATION (Thomson, Sweet & Maxwell, Second Edition), para. 639.


York Convention does not cover applications for provisional measures. In other words,

how can Article V have a different scope than Article II?

It is important to keep in mind that discussions regarding the enforcement of provisional

measures emerged after the New York Convention came into being.43 Even during the

preparatory debates of the Model Law in 1985, almost 30 years after the New York

Convention, the issue seemed premature, and enforcement of provisional measures was

something left to national laws.44 Thus, to state that to include them in the scope of the

convention would be incoherent goes beyond the intention of the drafters.

On the contrary, an interpretation according to Article 31 of the Vienna Convention on the

Law of Treaties would lead to including them, for two reasons. The first has been

mentioned above, in that the purpose of the New York Convention was to strengthen the

international arbitration system, in particular, by having States treat foreign awards in the

same way they treat local awards. Further, Article VII of the New York Convention goes as

far as containing a “self-destructive” provision in the interest of this very purpose. The

second is that the common sense of the word “binding” is contrary to “voluntary” and not

to “interim”. A binding award means that it is meant to be complied with by the party

against whom it is ordered. The word “final” was not chosen by the drafters.

Finally, Poudret and Besson state that scholars who opine that awards deciding on

provisional measures should benefit from the New York Convention do so “probably in the

interest of efficiency”. The views expressed above do not arise solely from the search of

efficiency but rather from the need to fulfill the “tandem objectives of fairness and

effectiveness”, a fitting expression of former Vice President of the ICC International Court

43 “At the time of the drafting of the [New York] Convention, the possibility of including the interim measures in the mechanism of the treaty was not addressed”. Francois Knopfler, “Award or Order? What works best?”, in “New Developments in International Commercial Arbitration 2007” (Christoph Müller. Ed), pp. 21-32, at 28. 44 Jean-Baptiste Racine, “L’exécution des mesures provisoires ordonnés par un arbitre. L’éclairage du projet de nouvelle loi type de la CNUDCI », in « L’exécution des mesures provisoires ordonnées par un arbitre. L’éclairage du projet de la nouvelle loi type de la CNUDCI. », in « Les mesures provisoires dans l’arbitrage commercial international. Evolutions et Innovations », COLLOQUES ET DEBATS (LexisNexis, LITEC), June 200, p. 5.


of Arbitration Francis Donald Donovan.45 It is interesting to note that UNCITRAL included

the notion of “interim awards” in Article 26 of its 1976 Arbitration Rules, establishing that

arbitral tribunals could issue orders on interim measures in the form of interim awards.46

To have the New York Convention and not apply it to provisional measures, in the interest

of international trade and for the protection of a litigating party, is simply a shame. As the

Swiss scholars recognize themselves, “A provisional measure ordered by an arbitral

tribunal is not really effective unless the interested party can obtain its enforcement.”47

IV. A proposal de lege ferenda

Latin American countries that do not have specific legal provisions on enforcement of

provisional measures ordered by arbitral tribunals may decide to apply the New York

Convention to such decisions. However, given the Chilean and Colombian qualification of

“award” –and since the applicability of the New York Convention to decisions on

provisional measures is not unanimous--, it is not improbable that countries will decide to

add special language in their respective legislations to govern the subject, whether by

adopting the Model Law 2006 relevant texts or otherwise.

The weaknesses of the existing various legislations have been described in Section II

above. The text of Article 17 et seq of Model Law 2006 is detailed in excess and replicates

the grounds for denying enforcement of awards where unnecessary, among other defects.

The Peruvian law also uses the parameter of the grounds of Article V of the New York

Convention, and the otherwise effective Ecuadorian law depends on the will of the parties

entirely.

Taking into account the mentioned defects of the novel attempts to regulate the

enforcement of arbitral provisional measures, and in the hope of contributing to the

45 Francis Donald Donovan, “Powers of the Arbitrators to Issue Procedural Orders, including Interim Measures of Protection, and the Obligation of Parties to Abide by Such Orders”, ICC International Court of Arbitration Bulletin Vol. 10 No. 1 (1999), p. 57. 46 This notion was eliminated in the 2010 reform of the Rules. 47 Jean-Francois Poudret and Sébastien Besson, COMPARATIVE LAW OF INTERNATIONAL ARBITRATION (Thomson, Sweet & Maxwell, Second Edition), para. 630.


development of a more effective and tailor-made mechanism that supports further

autonomy of arbitral proceedings, the following language is proposed.

“Decisions on provisional measures rendered by an arbitral tribunal, whether in the territory of this country or abroad, shall be enforced by the competent court under applicable procedural laws [alternatively, select a single court]. Said court may deny enforcement of the decision only if: a) The decision is directed at a third party, not party to the arbitration; b) The decision includes orders that exceed the applicant’s request. Provided

the ultra or extra petita orders are separable from the rest, the court shall enforce the rest of the orders and declare the ultra or extra petita order null and void;

c) The measure is not within the competence of the court. Should the court be able to adapt the measure to one of the measures it can adopt according to its laws, it may order such an alternative measure; or

d) The applicant has not afforded the security ordered by the arbitral tribunal; e) The measure has been subsequently revoked or modified by the arbitral

tribunal. The decision of the court is final and not subject to appeal. The applicant shall keep the arbitral tribunal informed of the enforcement proceedings.”

Language along these lines should satisfy the concerns of parties seeking to ensure the

outcome of a future award, the needs of arbitral tribunals to find support in local courts, as

well as the interests of the judicial policy of the country where the decisions will be

enforced.

V. Concluding remarks

It is obvious that the enforcement of provisional measures has been in the mire of scholars

and legislators for some time. The difficulty of provisional measures decided by arbitral

tribunals is that perjury, or an equivalent, does not exist in international arbitration.

Although there is the generally recognized power of arbitral tribunals to decide on costs and

ultimately order a misbehaved party to pay the entire costs of the arbitration, depending on

the case, this measure may either go too far or be inappropriate. Thus, beyond the inherent

authority of arbitral tribunals, decisions emanated from them need legal frameworks that

recognize that authority and that enable the enforcement of those decisions.


Often times, parties take advantage of the concurrent jurisdiction and apply for measures

directly to the state courts, in order to bypass the problems discussed in this article.48

However, both out of deference to the arbitrators as well as for practical purposes (parties

should not need to disperse their efforts when dealing with a dispute), parties may

legitimately prefer to request the measures to the arbitrators, who ultimately know the

intricacies of their case.

In my view, awards on provisional measures are a type of award that is incidental, or

supplemental, to the arbitral proceeding and the eventual final award. I do not see why the

New York Convention cannot be applied to them. However, whether it is an effective

mechanism it is doubtful given the time it takes for recognition and enforcement of

decisions.49 In any case –unfortunately-- there is no consensus on its applicability to those

decisions, so it cannot be considered a uniform, global mechanism to enforce provisional

measures of arbitral tribunals.

For that reason, it is expected that countries will revise or adopt the language regarding

enforcement of provisional measures decided by arbitral tribunals in the near future.

Indeed, “…if arbitrators are granted the competence to order the measures, we must take

that logic to the end and provide for a mechanism that gives them a real and concrete

effectiveness.”50

48 See Eduardo Silva Romero’s dissertation “Adopción de medidas cautelares por el juez y por el árbitro”, for the II Congreso Internacional del Club Español del Arbitraje –El Arbitraje y la Jurisdicción, Madrid, 17-19 June 2007, found in http://es.scribd.com/doc/57936885/Adopcion-de-Medidas-Cautelares-por-el-Juez-y-por-el-Arbitro-Eduardo-Silva. 49 In Chile, for example, the average term for recognition before the Supreme Court is two years. The decision then must be enforced by an lower court. 50 Original in French: «…si les arbitres reçoivent les pouvoirs d’ordonner les mesures, il faut pousser jusqu’au bout la logique et prévoir un mécanisme conférant a celles-ci efficacité réelle et concrète. » Free translation. Jean-Baptiste Racine, « L’exécution des mesures provisoires ordonnées par un arbitre. L’éclairage du projet de la nouvelle loi type de la CNUDCI. », in « Les mesures provisoires dans l’arbitrage commercial international. Evolutions et Innovations », COLLOQUES ET DEBATS (LexisNexis, LITEC), June 2006, p. 6.

Documents

BORRADOR DE ARTÍCULO POR PUBLICARSE EN EL … Liber Amicorum LOB _final 2 con... · BORRADOR DE ARTÍCULO POR PUBLICARSE EN EL LIBER AMICORUM A LUIZ OLAVO BAPTISTA – ... almost