Columbia SP 23 Vol 2 Weeks 5-8

COLUMBIA LAW SCHOOL
L9061 Practicum in International

Commercial Arbitration
Spring 2023
Professors
George Bermann
Viren Mascarenhas
Rahim Moloo
VOLUME 2:
WEEK 5: Applicable Law; Conditions Precedent and Preliminary Issues
WEEK 6: Interim Measures
WEEK 7: Confidentiality and Participation by AMICUS
WEEK 8: Multi-Party and Class Arbitration

WEEK 5: APPLICABLE LAW; CONDITIONS PRECEDENT AND PRELIMINARY
ISSUES
February 14, 2023
Relevant Rules
1. ICC Rules, Art. 21
2. ICDR Arbitration Rules, Art. 28
3. ICSID Convention, Art. 42

4. HKIAC Rules, Art. 35
5. SCC Rules, Art. 22
6. SIAC Rules, Rules, 25, 27
7. LCIA Rules, Art. 23
8. UNCITRAL Model Law, Art. 16
9. UNCITRAL Rules, Art. 23
Required Readings
Applicable Law
1.
Chapter 13: Choice of Substantive Law in International Arbitration in Gary B. Born,
International Arbitration: Law and Practice, Volume (Kluwer Law International
2012) pg. 233 – 259
Applicable Law
2. Chapter 1: The Law Applicable to Procedural Issues in Jeffrey Commission and Rahim
Moloo, Procedural Issues in International Investment Arbitration (OUP 2018).
Applicable Law
Gabrielle Kaufmann-Kohler, “The Governing Law: Fact or Law?” – A Transnational Rule
3.
on Establishing its Contents, in Best Practices in International Arbitration (Markus With
ed. ASA 2006)
Applicable Law
4.
Emmanuel Gaillard, Thirty Years of Lex Mercatoria: Towards the Discriminating
Application of Transnational Rules in Albert Jan van den Berg (ed), Planning Efficient
Arbitration Proceedings: The Law Applicable in International Arbitration, ICCA Congress
Series, 1994 Vienna Volume 7 (Kluwer Law International 1996) pg. 582 – 590
5. Conditions Precedent
Lumbermens Mut. Cas. Co. v. Broadspire Mgmt. Servs., 623 F.3f.476, 477 (7th Cir., 2010)
6. BG v. Argentina __ U.S. __ (2014).
Available at http://www.supremecourt.gov/opinions/13pdf/12-138_97be.pdf
Print preview Page 1 of 30
Chapter 13: Choice of Substantive Law in

International Arbitration
Author
Gary B. Born, Gary B. Born
Key words
Parties often choose international arbitration to resolve their
disputes because they desire enhanced certainty concerning their Source
legal rights. Among other things, parties want a stable substantive
Chapter 13: Choice of
legal regime and neutral procedural framework. These objectives
are particularly important in international contexts, where differences Substantive Law in
between national laws and procedures can be great and where the International
needs for predictability are particularly acute. Arbitration in Gary B.
Born , International
International arbitration seeks to provide predictability with respect to
Arbitration: Law and
both substantive and procedural law, often by combining a choice-of
-law clause with an arbitration agreement. As explained by the U.S. Practice, Volume (Kluwer
Supreme Court in Scherk v. Alberto-Culver Company: Law International 2012)
pp. 233 - 259
[U]ncertainty will almost inevitably exist with respect to
any contract touching two or more countries, each with
its own substantive laws and conflict-of-laws rules. A
contractual provision specifying in advance the forum
in which disputes shall be litigated and the law to be
applied is, therefore, an almost indispensable
precondition to achievement of the orderliness and
predictability essential to any international business
transaction. [Absent such agreements, one enters] the
dicey atmosphere of … a legal no-man's-land [which]
would surely damage the fabric of international
commerce and trade, and imperil the willingness and
ability of businessmen to enter into international
commercial agreements. (1)
As discussed above, it is important to distinguish several different

applicable laws which are relevant in international arbitration: (1) the
substantive law applicable to the merits of the parties' dispute,
including the underlying contract and non-contractual claims; (2) the
substantive law applicable to the parties' arbitration agreement,
including its existence, validity and interpretation; (3) the law
applicable to the arbitral proceeding (i.e., the “procedural law”); and
(4) the conflict of laws rules for selecting each of the foregoing laws.
(2)
As also discussed above, it is possible for each of these laws to
be that of a different state. This Chapter concerns only the
substantive law applicable in international arbitration to the merits of
the parties' dispute (and not the law applicable to the arbitration
agreement or the procedural law of the arbitration).
In considering the choice of substantive law it is essential to

distinguish two circumstances: (1) situations where there is no
265
http://www.kluwerarbitration.com/CommonUI/print.aspx?ids=KLI-KA-1246017-n 12/2/2013
choice-of-law agreement and the tribunal must select the

substantive law solely by applying conflict of laws rules or directly
choosing an applicable substantive law; page "233" and (2)
situations where the parties have agreed upon the applicable
substantive law. Virtually all legal systems and all arbitral tribunals
give effect to choice-of-law agreements in accordance with their
terms; the approach to the choice of law in the absence of a choice-
of-law agreement is less uniform, with different courts and tribunals
taking different approaches.
§13.01. Arbitral Tribunal's Authority to Select Applicable

Substantive Law
Absent contrary agreement, arbitrators generally possess broad

power – comparable to that which exists for arbitrators' decisions
regarding application of substantive law rules – to select and apply
choice-of-law rules for selecting the applicable substantive law in an
arbitration.
[A]. National Arbitration Legislation
National arbitration legislation generally provides that arbitral

tribunals have the authority to select the law governing the
substance of the parties' dispute. As detailed below, most arbitration
statutes distinguish between situations where the parties have
agreed to a choice-of-law clause, selecting a specified law, and
cases where they have not; in both situations, however, arbitrators
are empowered to select the substantive law governing the parties'
dispute. (3) For example, Article 28 of the UNCITRAL Model Law
provides for the arbitrators to apply either the law chosen by the
parties (in Article 28(1)) or, absent a choice-of-law agreement, the
law chosen by the tribunal (in Article 28(2)). Virtually all other
arbitration legislation is similar; even absent statutory provisions,
case law in most states recognizes the arbitrators' authority to select
the law governing the substance of the parties' dispute. (4)
In most jurisdictions, the arbitrators' choice of substantive law is

subject to only limited judicial review in annulment proceedings. As
discussed below, judicial review of arbitral awards in many states
does not involve any scrutiny of the merits of the arbitrators'
substantive decisions; this generally extends to arbitrators' decisions
regarding the selection and application of choice-of-law rules. (5)
[B]. Institutional Arbitration Rules
Institutional rules generally parallel national arbitration legislation in

recognizing the authority of arbitral tribunals to select the law
governing the merits of the parties' dispute. Again, most institutional
rules distinguish between cases involving choice-of-law agreements
and cases involving the application of conflict of laws rules in the
absence of agreement. In both instances, however, most
institutional rules grant the arbitrators broad authority to choose the
applicable law page "234" (e.g., Article 35 of the UNCITRAL
Rules; Article 21 of the 2012 ICC Rules). These provisions further
limit the extent of any judicial review of arbitrators' choice-of-law
decisions, by affirming the parties' acceptance of the tribunal's broad
authority.
266
§13.02. Choice of Substantive Law in Absence of Agreement on

Applicable Law
In some cases, the parties to an international dispute will not have

agreed, either in their underlying contract or otherwise, upon the
substantive law governing their relations. In these circumstances,
the arbitral tribunal will be required to select the applicable
substantive law, either applying some set of conflict of laws rules or
“directly” applying a substantive law.
[A]. Choice of Substantive Law under National Arbitration

Legislation in Absence of Choice-of-Law Agreement
Arbitration statutes take differing approaches to selection of the

applicable substantive law in the absence of a choice-of-law
agreement. Many statutes grant arbitrators substantial discretion to
select an appropriate set of conflict of laws rules and, applying these
rules, to choose a substantive law. In contrast, other statutes take a
different approach, prescribing a specific choice-of-law rule for all
arbitrations seated in national territory. In principle, five basic choice-
of-law approaches can be identified.
Basic Choice-of-Law Approaches

1. Mandatory Application of Generally-Applicable Conflict of Laws
Rules of Arbitral Seat
2. Mandatory Application of Specialized Conflict of Laws Rules of
Arbitral Seat
3. “Applicable” or “Appropriate” Conflict of Laws Rules Chosen by
Arbitral Tribunal
4. “Direct” Application of Substantive Law by Arbitral Tribunal
5. Mandatory Law Rules
First, although long regarded as archaic, the law of the arbitral seat
may mandatorily require arbitrators to apply generally-applicable
local conflict of laws rules or local substantive law. For example, in
England, prior to the 1996 Arbitration Act, arbitrators were said to be
required to apply the conflicts rules applicable in English courts. (6)
Alternatively, in some states, either law or practice require the
application of local substantive law by arbitrators; this approach has
largely been abandoned in contemporary legislation and practice. (7)
Second, some legislation imposes specialized choice-of-law rules on

arbitral tribunals seated within national territory (albeit ordinarily via
general formulae that leave tribunals with broad freedom to select
an applicable law). For example, Article 187(1) of the Swiss Law on
Private page "235" International Law provides that “[t]he arbitral
tribunal shall decide the dispute according to the rules of law chosen
by the parties or, in the absence of such a choice, according to the
rules of law with which the case has the closest connection.” Other
states have adopted comparable statutory provisions, including
Germany, Italy and Japan. (8)
Third, some statutes authorize arbitrators to apply the choice-of-law

rules they consider “applicable” or “appropriate.” Thus, Article 28(2)
of the UNCITRAL Model Law provides: “failing any designation by
the parties, the arbitral tribunal shall apply the law determined by the
conflict of laws rules which it considers applicable.” The English
267
Arbitration Act, 1996, is similar, providing in §46(3) that: “[i]f or to the

extent that there is no … choice or agreement [on the applicable
substantive law,] the tribunal shall apply the law determined by the
conflict of laws rules which it considers applicable.” To comparable
effect, U.S. courts almost uniformly hold that arbitral tribunals
possess broad freedom to select the applicable choice-of-law rules
and applicable substantive law. (9)
By its terms, this approach does not require the tribunal to apply the
conflict of laws rules of the seat (nor any other specified jurisdiction);
nor does this approach impose any specific choice-of-law rules on
the arbitrators. Instead, this approach grants the tribunal broad
power to apply those conflicts rules that it concludes are most
appropriate to the case.
Fourth, some legislation grants tribunals the power “directly” to apply

whatever substantive rules of law they consider appropriate, without
applying conflict of laws rules. For example, Article 1511 of the
French Code of Civil Procedure provides that in the absence of party
-chosen rules of law, the tribunal may resolve the dispute “in
accordance with the rules of law it considers appropriate.” Other
legislation, in Europe and elsewhere, is similar. (10) These statutory
regimes putatively require no conflict of law analysis at all and
permit the “direct” application of substantive rules of law.
Finally, and exceptionally, a nation's law may dictate that particular

claims or defenses must be heard by the arbitrator under mandatory
national law. For example, where certain statutory protections – like
antitrust, securities, or labor protection laws – are involved, national
courts have held that arbitrators are required to consider claims
based on those laws. (11) This can be regarded as a type of
specialized choice-of-law rule, mandating application of a specific
substantive rule in particular cases.
[B]. Choice of Substantive Law under Institutional Arbitration

Rules in Absence of Choice-of-Law Agreement
Institutional rules generally grant the arbitrators broad freedom in

selecting an applicable substantive law (in the absence of
agreement by the parties). For example, Article 35(1) of the
UNCITRAL page "236" Rules provides that, failing agreement
by the parties, “the arbitral tribunal shall apply the law which it
determines to be appropriate.” A few other institutional rules are
essentially identical. (12)
In contrast, most institutional rules permit the tribunal to apply

directly the substantive law it considers “appropriate,” without
requiring express reference to any conflict of laws principles. For
example, Article 21(1) of the 2012 ICC Rules provides “[t]he parties
shall be free to agree upon the rules of law to be applied by the
Arbitral Tribunal to the merits of the dispute. In the absence of any
such agreement, the Arbitral Tribunal shall apply the rules of law
which it determines to be appropriate.” Other institutional rules are
similar. (13)
Finally, a few sets of institutional rules require the arbitrators to

apply the law of the state with the “closest connection” to the parties'
dispute. (14) These rules not only require a choice-of-law analysis, but
prescribe the particular conflict of laws rule that must be applied.
268
[C]. Relationship between Institutional Arbitration Rules and

National Law
As discussed above, some arbitration legislation provides a

specialized conflict of laws rule for international arbitrations seated
within national territory (e.g., Switzerland, Germany). This gives rise
to questions as to whether the provisions of institutional rules (such
as Article 33(1) of the UNCITRAL Rules), granting arbitrators
authority to select the “appropriate” conflicts rule or substantive law,
permit a tribunal to apply a conflict of laws system other than that
which is statutorily specified. For example, can an ICC arbitrator in
an arbitration seated in Switzerland (without an express choice-of-
law clause) apply a conflicts rule other than the “closest connection”
formula in Article 187(1) of the Swiss Law on Private International
Law (excerpted above)?
The resolution of this issue is in the first instance a question of

national law. In most instances, national law should be interpreted
as providing that the parties' agreement to the ICC Rules' choice-of-
law formula supersedes the statutory formula (in light of the strong
deference to party autonomy, discussed below). That is confirmed
by the fact that each of these statutory regimes permits the parties
to select the law applicable to their relations directly, and there is no
reason that an indirect choice of law, through the choice of a conflict
of laws rule, is not equally valid. Nonetheless, authorities in some
jurisdictions with statutory choice-of-law formulae reach contrary
conclusions, holding that such formulae are mandatorily applicable
in arbitrations conducted on local territory. (15)
[D]. Choice-of-Law Rules Applied by Arbitral Tribunals in

Absence of Choice-of-Law Agreement
Within the foregoing legal framework, arbitral tribunals must make

decisions in individual cases regarding the selection of the
applicable substantive law (absent a choice-of-law agreement).
Those page "237" decisions require the application of relevant
international conventions, arbitration legislation and institutional
rules, as well as general conflict of laws principles.
In some cases, those sources may provide relatively clear guidance

for the tribunal – as, for example, in an arbitration where the parties
have agreed to institutional rules prescribing a choice-of-law rule (16)
or seated the arbitration in a jurisdiction with a mandatory conflicts
rule for international arbitrations. (17) In most cases, however,
arbitrators are either expressly or impliedly granted broad powers
with regard to choosing the applicable substantive law (absent a
choice-of-law agreement) – including authority to apply the conflicts
rules that they deem “applicable” (18) or the substantive rules that
they deem “appropriate.” (19) The resulting latitude has produced a
considerable range of choice-of-law decisions by arbitral tribunals.
[1]. Choice-of-Law Rules of Arbitral Seat
The historic view in many states was that arbitral tribunals were
mandatorily required to apply the arbitral seat's choice-of-law rules.
A variation (discussed below) was the view that the seat's
substantive laws were mandatorily applicable to the merits of the
parties' dispute.
269
This approach derives from historic views of international arbitration,

which regarded a tribunal as bound by the “procedural” law of the
arbitral seat, generally regarded as including the seat's choice-of-law
rules. Resolutions adopted by the Institute of International Law in
1957 reflected this approach, providing that “[t]he rules of choice of
law in the state of the seat of the arbitral tribunal must be followed to
settle the law applicable to the substance of the difference.” (20)
Consistent with this, a leading English authority (written prior to the
English Arbitration Act, 1996), observed “[n]or can an English
arbitrator apply any conflict of laws rules other than English
rules.” (21) A number of judicial decisions and arbitral awards
(particularly older ones) from civil law jurisdictions reached similar
results, directly applying the conflict of laws rules of the seat. (22)
A comparable, but distinct, view was taken in the United States,

where the traditional position was that, in the absence of a choice-of
-law agreement, the arbitrators should apply the substantive law of
the state in which the arbitration was seated to the merits of the
parties' dispute. In the words of one commentator, it was “widely
held that the parties who have chosen a place of arbitration have
thus impliedly agreed on the applicability of both the procedural and
substantive law of that place.” (23) Little reference was made to what
conflict of laws rules dictated this result, or were to be applied by the
arbitrator. Rather, the parties' selection of the seat was deemed to
be an implied choice of the seat's substantive law.
page "238"
The traditional view that the seat's choice-of-law or substantive law

rules must be applied by arbitrators has been eroded substantially in
recent decades. Commentators, courts and other authorities have
rejected the “arbitral seat” rule for less mechanical approaches.
According to one commentator, there has been an “almost total
abandonment of the application of the rules of conflict of the so-
called arbitral forum.” (24) The same skepticism was exhibited towards
authorities treating agreement on the seat as an implied choice of
substantive law. As a frequently-cited award put it: “[i]t is appropriate
to eliminate forthwith the law of the forum, whose connection with
the case is purely fortuitous.” (25)
[2]. Choice-of-Law Rules that Arbitral Tribunal Considers

“Appropriate”
As discussed above, Article 28(2) of the UNCITRAL Model Law and

similar legislation, as well as some leading institutional rules, provide
that the tribunal shall “apply the law determined by the conflict of
laws rules which it considers appropriate.” A number of awards,
including awards not subject to the Model Law, also adopt this
standard. (26)
The arbitrators' freedom to select the “appropriate” conflicts rule

should not be understood to permit unfettered discretion. On the
contrary, the arbitrators remain obligated to select the conflicts rules
that are “appropriate” in light of the procedural law of the arbitration
and the arbitration agreement; this is a selection with right answers
and wrong answers, and not a purely discretionary matter. For
example, an arbitrator cannot select the conflicts rules of his home
jurisdiction, if it has no connection to the dispute, merely because it
is familiar.
270
In many cases, for reasons discussed elsewhere, the law of the

arbitral seat or the parties' implied choice-of-law agreement will
require application of the conflicts rules of the seat. Consistent with
this, a number of contemporary awards have applied the choice-of-
law rules of the seat; other awards have looked to the various other
choice-of-law rules outlined below (e.g., cumulative, international
standards). (27)
[3]. “Cumulative” Application of Choice-of-Law Rules
Arbitrators sometimes apply the conflicts rules of each of the states

with a connection to the dispute. As a practical matter, this
“cumulative” approach virtually always concludes that all potentially
relevant conflicts rules select the same law. Alternatively, some
awards apply a variation of this analysis that considers application of
all potentially applicable national (or other) substantive laws. (28)
When either of these results occurs, it demonstrates a particular
type of “false page "239" conflict.” Proponents of the analysis
cite its “internationalizing” effects, which are seen (rightly) as well-
suited for application in international contexts. (29)
[4]. Application of Substantive Law of State with Closest

Connection to Dispute
As discussed above, some arbitration legislation prescribes a

“closest connection” standard for tribunals seated on national
territory; (30) where such legislation is applicable, tribunals typically
have applied the closest connection standard. Indeed, even where
no such statutory rule applies, some awards have applied a “closest
connection” choice-of-law rule. (31) This approach draws support, as
to the choice-of-law analysis applicable to contracts, from the related
approaches of the Rome I Regulation on the Law Applicable to
Contractual Obligations and its predecessor, Rome Convention,
both adopting a “closest connection” standard, and the Restatement
(Second) Conflict of Laws adopting a “most significant relationship”
standard. (32)
[5]. Choice-of-Law Rules of the State Most Closely Connected

to Underlying Dispute
Another approach applied by arbitral tribunals is selecting the

conflict of laws rules of the state that is most closely connected to
the parties' dispute. This approach suffers important difficulties. In
particular, it requires identifying what state is most “closely
connected” to a dispute – itself a potentially complex matter; then
identifying what that state's conflicts rules are – again, not
necessarily straightforward; and finally applying those conflicts rules
to select a substantive law – requiring a further, sometimes complex
analysis.
[6]. “International” Choice-of-Law Rules
Some arbitral decisions derive choice-of-law rules from non-national

sources – either “international” conflict of laws rules or perceived
“general” principles of law. If a predictable body of international
choice-of-law rules could be identified or developed, it would
271
comport well with the objectives that lead parties to agree to

international arbitration as a means of resolving their disputes –
neutrality, predictability and effective international enforcement. One
recent award explained these rationales well:
[M]uch [is] to be said in favour of adopting generally

accepted principles of international conflict of laws.
The fact that the dispute arises out of dealings
between one government and an instrumentality of
another government gives them a unique international
flavour. Hence, the parties could reasonably have
contemplated that arbitrators would apply page
"240" generally accepted international conflicts-of-law
rules in arriving at the applicable law by which their
dispute would be resolved…. In the circumstances of
the present arbitration, which is truly international in
character, the Arbitral Tribunal is of the opinion that it
should adopt generally accepted international conflict
of laws rules. (33)
Regrettably, however, there is as yet no such body of international

conflict of laws rules. Indeed, there are very different approaches to
conflict of laws in different legal systems. This may change over
time, as common choice-of-law principles are articulated in
international conventions, awards and elsewhere, but for the time
being this is an aspiration, rather than a reality.
In practice, tribunals that have applied “international” conflicts

principles have generally looked to international treaties addressing
choice-of-law issues, even when those agreements are not, by their
terms, directly applicable. In particular, tribunals have relied on the
U.N. International Sale of Goods Convention, the 1955 Hague Sales
Convention and the Rome Regulation on the Law Applicable to
Contractual Obligations and the Rome Convention. (34) Alternatively,
some tribunals have relied on general principles that they have
discerned in earlier awards considering conflict of laws matters. (35)
[7]. Application of Non-National Legal System in Absence of

Parties' Choice-of-Law Agreement
Application of either a choice-of-law system or “direct” application of

the appropriate substantive law results in application of some set of
legal rules. In most cases, this will be the national law of a particular
state, selected through the application of a conflict of laws system.
Nonetheless, a few international tribunals have applied so-called
non-national legal systems or rules of law – including lex mercatoria,
general principles of law, the UNIDROIT Principles of International
Commercial Contracts, or the Principles of European Contract Law
(“PECL”). The content of these various non-national systems is
discussed below. (36)
It is unclear whether the selection of a non-national legal system will

result in a valid award (at least absent a choice-of-law agreement
selecting such a system). As discussed below, Article 28(1) of the
Model Law (as well as some other arbitration statutes (37) ) provides
for the tribunal to apply the “rules of law” selected by the parties.
The reference to “rules of law,” rather than merely “law,” has been
interpreted as permitting parties to select non-national legal systems
in their choice-of-law agreements. In contrast, Article 28(2) of the
Model Law provides for the arbitrators to apply the “law” determined
272
by applicable conflicts rules. That difference in the text of Articles

page "241" 28(1) and 28(2) suggests that arbitrators may not –
absent a choice-of-law agreement selecting such a legal system –
apply non-national rules of law. (38)
A few jurisdictions, including Switzerland and Canada, have

modified Article 28(2) of the Model Law to refer to “rules of law.” (39)
This change is intended to authorize arbitrators to select a set of non
-national rules to govern a dispute, even absent an agreement to
this effect. Nonetheless, several influential jurisdictions have
declined to follow this approach when adopting versions of the
Model Law, including England, Germany and Japan.
Assuming that arbitrators may select a non-national legal system, as

a practical matter, they have nonetheless refused to do so in most
commercial cases. Non-national legal systems generally fail to
provide predictable results, particularly insofar as complex
commercial affairs are concerned. (40) That is confirmed by the
reluctance of commercial parties to agree to choice-of-law clauses
selecting non-national legal systems. Given this reluctance, tribunals
are generally very hesitant to impose non-national legal systems on
commercial parties.
[E]. “Direct” Application of Substantive Law
Some authorities conclude that international arbitrators are free to

“directly” apply substantive law rules, supposedly without first
engaging in any choice-of-law analysis. As discussed above, Article
1511 of the French Code of Civil Procedure authorizes arbitrators in
an international arbitration to “directly” apply the substantive law that
they consider appropriate. Similar legislation has been adopted in a
few other states (as discussed above). (41) Similarly, many
institutional rules also permit “direct” application of substantive laws,
putatively without any conflict of laws analysis. Article 21(1) of the
2012 ICC Rules is representative: “[i]n the absence of any such
agreement [by the parties as to applicable law], the Arbitral Tribunal
shall apply the rules of law which it determines to be appropriate.”
Although frustration with contemporary choice-of-law rules is

understandable, “direct” application of national law is not an
appropriate response. The purpose of conflict of laws rules includes
structuring the decision-maker's discretion and providing parties with
a measure of certainty about the substantive law governing their
conduct. “Directly” applying a substantive law, putatively without
conflict of laws analysis, leaves the parties' substantive rights to turn
on subjective, unarticulated instincts of individual arbitrators and
does little to further interests of predictability and fairness.
[F]. Distinction between Matters of Substance and Procedure
A recurrent issue in conflict of laws analysis is identifying what

issues are subject to (a) the “substantive” law selected by the
arbitrators' choice-of-law analysis, and (b) the “procedural” law
governing the arbitration. Among other things, this question of
characterization applies to page "242" issues such as burden of
proof, evidentiary matters, statutes of limitations and remedies. (42)
The distinction between substantive and procedural issues is elusive
even within national legal systems. In the international context,
where multiple differing characterizations may exist, the distinction is
even more complex.
273
[1]. Burden of Proof
A recurrent question in international arbitration is what party bears

the burden of proving a particular issue. In general, the better view is
that questions of burden of proof should not be assimilated solely
with either the substantive law governing the merits of the dispute or
the procedural law of the arbitration, but instead selected in light of
both.
[2]. Statutes of Limitations
Most nations impose limitations periods within which civil claims

must be brought. Choosing between various potentially applicable
statutes of limitations in international arbitration raises significant
choice-of-law questions.
In some (particularly U.S.) jurisdictions, statutes of limitations are

regarded as “procedural,” and therefore governed by the law of the
forum. (43) In contrast, civil law states generally regard statutes of
limitations as “substantive,” and hold that limitations issues are
governed by the law applicable to the merits of the parties' claims.
(44)
Although the historic (U.S.) common law position has eroded
somewhat in recent years, the potential for inconsistent results
remains substantial. In general, the better and, in practice, more
common approach is to assimilate limitations issues to the
substantive law governing the dispute, rather than to look to the law
of the arbitral seat.
[3]. Damages and Remedies
Issues of characterization and choice of law also arise with regard to

the law governing damages and other remedies. Again, the historic
position in many common law jurisdictions was that questions of
remedy (including damages) were governed by the law of the forum.
The civil law position was generally that issues of remedy were
assimilated to the substance. As with limitations issues, the more
common approach is to treat damages as an aspect of the
substantive law governing the parties' dispute.
[G]. Trade Usages
Many national arbitration statutes and institutional rules provide that

international arbitral tribunals either may or must consider “trade
usages” in reaching their decision. Article 28(4) of the UNCITRAL
Model Law is representative, providing that “in all cases, the arbitral
tribunal shall decide in accordance with the terms of the contract
and shall take into account the usages page "243" of the trade
applicable to the transaction.” Other legislation is similar, as are
institutional rules. (45) These provisions underscore arbitration's
historic roots in, and objective of, providing resolutions of
international business disputes in a manner that accords with
commercial expectations and practices.
§13.03. Choice of Law Governing the Merits of the Parties'

Dispute Pursuant to Choice-of-Law Agreements
274
International arbitration agreements typically include, or accompany,

a choice-of-law provision addressing the substantive law applicable
to the parties' contract (or, more broadly, their entire relationship). (46)
As noted above, a choice-of-law clause provides enhanced
predictability regarding the parties' contractual obligations and is
ordinarily a critical aspect of any international transaction. (47) Prior
agreement on the substantive law may also provide important
advantages to one party (for example, by securing a foreign investor
against a state's unilateral changes in its own local law or providing
a lender with greater security). (48)
Where a choice-of-law clause exists, three significant issues arise:

(a) is the choice-of-law agreement enforceable; (b) if so, subject to
what exceptions; and (c) how is the choice-of-law clause
interpreted? These issues all require application of conflicts rules to
determine what effect to give to and how to interpret the parties'
choice-of-law agreement. Each of the foregoing questions can arise
both in the course of the arbitration and in any related judicial
enforcement proceedings. These issues will often be decided, in the
first instance, by the arbitrators (as opposed to a national court); the
principal exception is where challenges based on non-arbitrability of
particular types of claims or disputes are made in a court.
[A]. Presumptive Validity of Choice-of-Law Agreements
As a general proposition, international conventions, national laws

and institutional rules unequivocally affirm the parties' freedom to
select the substantive law applicable to their dispute. Decisions by
international arbitrators are to the same effect: as discussed below,
in most awards, a dominant feature is respect for party autonomy.
Indeed, it is fair to say that the parties' autonomy to select the
substantive law governing their commercial relations is a general
principle of international law, and, in practice, the almost invariable
rule.
page "244"
Preliminarily, the formation, validity, enforceability and interpretation

of a choice-of-law agreement are not solely matters of contract and
instead necessarily depend on the application of rules of law; to
enforce a choice-of-law agreement, there must be reference to
some legal system that gives validity (or, in some instances,
withholds validity) to the agreement. This, in turn, requires the
choice (explicit or implicit) and application of a set of conflicts rules.
As discussed below, virtually all developed legal systems adopt

similar approaches to choice-of-law agreements selecting the
substantive law, generally giving them full effect. Accordingly,
although the existence of a choice-of-law agreement does not
obviate the need for a conflict of laws analysis, it makes the results
largely uniform.
[1]. Presumptive Validity of Parties' Choice-of-Law Agreement

Selecting Substantive Law under International Conventions
Leading international conventions recognize the parties' autonomy

to select the substantive law governing their commercial relations.
Although the New York Convention does not expressly address the
choice of the substantive law governing the parties' commercial
275
relations, it acknowledges the parties' freedom to select the law

governing the arbitration agreement and the arbitral proceedings. (49)
More directly controlling, Article VII(1) of the European Convention
provides: “The parties shall be free to determine, by agreement, the
law to be applied by the arbitrators to the substance of the
dispute.” (50)
Other international treaties, not focused on arbitration, confirm the

parties' presumptive autonomy to select the law governing their
relations. The Rome Convention and Regulation both provide, in
Article 3(1) (titled “Freedom of Choice”), that “[a] contract shall be
governed by the law chosen by the parties.” As discussed below, the
presumptive validity of choice-of-law agreements under Article 3(1)
is subject to the mandatory law of the forum (in Article 7(2) of the
Rome Convention and Article 9(2) of the Rome Regulation) and
potentially other states with a closer connection to the matter (in
Article 7(1)). (51)
Similarly, the U.N. International Sale of Goods Convention contains

provisions recognizing the parties' freedom to select the governing
law. Article 6 of the Convention provides “[t]he parties may exclude
the application of this Convention or, subject to Article 12, derogate
from or vary the effect of any of its provisions.” As with the Rome
Convention, this provision is not a binding rule of law unless an
arbitral tribunal determines it to be applicable through a conflict of
laws analysis.
[2]. Presumptive Validity of Parties' Choice-of-Law Agreements

Selecting Substantive Law under Arbitration Legislation
The laws of most states recognize and enforce agreements as to the

choice of law applicable to the substance of parties' commercial
contracts. The presumptive validity of choice-of-law agreements is
subject only to limited exceptions under national law (which are
more clearly specified than under most international conventions).
page "245"
The UNCITRAL Model Law directly addresses the subject of choice-

of-law agreements selecting the substantive law in international
arbitrations. Article 28(1) provides that “the arbitral tribunal shall
decide the dispute in accordance with such rules of law as are
chosen by the parties as applicable to the substance of the
dispute.” (52) Similarly, Article 1511 of the French Code of Civil
Procedure provides: “The arbitral tribunal shall resolve the dispute in
accordance with the rules of law chosen by the parties.” Other
arbitration legislation is to the same effect. (53)
Some states do not (expressly) provide a specific conflicts rule

regarding choice-of-law agreements in international arbitrations, but
have adopted substantive rules of law applicable to choice-of-law
agreements generally. The United States is a prime example. The
FAA is silent with regard to the validity of choice-of-law agreements,
but, under the laws of most U.S. states, and under federal common
law rules applicable in matters subject to the New York Convention,
such agreements are presumptively valid. (54)
Despite this almost universal position, a few nations (typically those

without a history of market economies) will not enforce choice-of-law
agreements. Instead, they prescribe mandatorily applicable conflict
276
of laws rules, regardless of what the parties have agreed. (55) Finally,
some states take expansive views of the areas in which public policy
will not give effect to choice-of-law agreements. This is discussed
below.
[3]. Presumptive Validity of Parties' Choice-of-Law Agreement

Selecting Substantive Law under Institutional Arbitration Rules
Recognition of party autonomy in the choice of substantive law is the

unanimous approach of institutional rules. For example, the
UNCITRAL Rules provide, in Article 35(1), that “[t]he arbitral tribunal
shall apply the rules of law designated by the parties as applicable
to the substance of the dispute.” Similarly, Article 21(1) of the 2012
ICC Rules provides “[t]he parties shall be free to determine the rules
of law to be applied by the Arbitral Tribunal to the merits of the
dispute.” Most other institutional rules are similar. (56) These rules do
not override mandatory law limitations on the enforceability of choice
-of-law agreements, but they confirm the importance attached to
party autonomy in international arbitration.
[B]. Public Policy Limitations on Parties' Choice of Law in

Many national conflict of laws systems recognize that mandatory

rules or public policy will in some circumstances override an
otherwise valid choice-of-law agreement. The broad principles
page "246" of this public policy exception are similar in most
developed legal systems, but application of the exception differs
from jurisdiction to jurisdiction.
[1]. Mandatory Laws and Public Policy
Most legal systems recognize that choice-of-law agreements may be

rendered invalid or unenforceable by over-riding public policy or
mandatory law. Thus, while the Rome Convention and Rome
Regulation affirm the parties' autonomy to select the substantive law
governing their relations, both instruments also provide, in Article 7
(2) and Article 9(2), for exceptions to that autonomy. Thus Article 9
(2) of the Regulation (much like Article 7(2) of the Convention)
provides that “[n]othing in this regulation shall restrict the overriding
mandatory provisions of the law of the forum.” Similarly, Article 21 of
the Rome Regulation (like Article 16 of the Rome Convention)
provides “[t]he application of a provision of the law of any country
specified by this Regulation may be refused only if such application
is manifestly incompatible with the public policy (‘ordre public’) of the
forum.” These provisions permit a court to deny effect to a choice-of-
law clause, selecting a foreign law, on the grounds that the chosen
law violates the mandatory law or public policy of the forum.
U.S. choice-of-law rules are similar. Section 187 of the Restatement

(Second) Conflict of Laws provides that the parties' chosen law will
not be applied if it is “contrary to a fundamental policy” of the forum
(or, as discussed below, a foreign state in certain circumstances). (57)
Other states apply comparable rules. (58)
[2]. Content of “Public Policy” and “Mandatory Law”
277
There is considerable debate as to the content of “public policies”

and “mandatory laws” which are applicable under the foregoing
standards. As in other contexts, the public policy/mandatory law
exception is potentially unpredictable (“an unruly horse”). (59)
Partially in reaction to this, courts in many jurisdictions have taken

very restrictive and demanding views of public policy, limiting it to
the status of an exceptional escape device. The U.S. Supreme
Court has emphasized even in domestic matters that a public policy
cannot be derived from “general considerations of supposed public
interest,” but must be based upon explicit and clearly-defined “laws
and legal precedents” (60) ; equally, the public policy in question must,
for these purposes, be “fundamental” and “substantial.” (61)
Definitions of “mandatory laws” under most civil law systems are
similar. According to one authority: “[A] mandatory rule (loi de police
in French) is an imperative provision of law which must be applied to
an international relationship irrespective of the law that governs that
relationship.” (62) For the most part, national page "247" courts
have identified public policies, capable of overriding a choice-of-law
agreement, only in rare and narrowly-limited instances. (63)
[3]. “Foreign” Mandatory Laws and Public Policies
In addition, there are circumstances in which the mandatory law and

public policies of a state other than the forum state will be given
effect under leading conflict of laws systems. This is provided for in
a number of legal systems.
Thus, Article 7(1) of the Rome Convention permits the forum state to
disregard a contractual choice-of-law clause and instead apply a
foreign mandatory law. Article 7(1) provides that “effect may be
given to the mandatory rules of the law of another country with
which the situation has a close connection, if and in so far as, under
the law of the latter country, those rules must be applied whatever
the law applicable to the contract.” More recently, the Rome
Regulation has also permitted application of foreign mandatory laws,
albeit in narrower circumstances, providing in Article 9(3) that “[e]
ffect may be given to the overriding mandatory provisions of the law
of the country where the obligations arising out of the contract have
to be or have been performed, in so far as those overriding
mandatory provisions render the performance of the contract
unlawful.”
In the United States, state common law, reflected in §187(2) of the

Restatement (Second) Conflict of Laws, is broadly similar to the
Rome Convention, but more restrictive:
The law of the state chosen by the parties to govern

their contractual rights and duties will be applied, even
if the particular issue is one which the parties could
not have resolved by an explicit provision in their
agreement directed to that issue, unless … b)
application of the law of the chosen state would be
contrary to a fundamental policy of a state which has a
materially greater interest than the chosen state in the
determination of the particular issue and which, under
the [general choice-of-law] rule of §188, would be the
state of the applicable law in the absence of an
effective choice-of-law by the parties.
278
Like the Rome Convention, this provision permits a forum court to

disregard a choice-of-law agreement based on the public policies of
a state other than the forum. The Restatement (Second) is less
expansive than the Convention with regard to both the forum's and a
foreign state's mandatory laws, in that it requires that the relevant
state have a “materially greater interest” with respect to a particular
issue and that the foreign state's laws would be selected by
otherwise applicable conflicts rules in the absence of a choice-of-law
clause. Conversely, the Restatement (Second) approach appears
somewhat broader than the Rome Regulation, which is limited to
cases of illegality, in the place of performance.
[4]. Authority of Arbitrator to Consider Mandatory Law or Public

Policy
Issues of public policy have arisen with increasing frequency in

international arbitration in recent decades. In large part, this is due
to expanding notions of arbitrability, which have resulted in more
frequent consideration of statutory claims by arbitral tribunals.
page "248"
Public policy can play both a defensive and an offensive role in

international arbitration. First, mandatory law or public policy can
render part or all of the parties' underlying contract, whether
choosing an applicable law or otherwise, unenforceable. For
example, contractual restrictions can be void under competition
laws, contractual waivers can be unenforceable (for violations of
statutory protections), or choice-of-law provisions may be ineffective.
Second, mandatory laws or public policy can also be important in

international arbitration because it can provide the basis for an
affirmative claim. Examples include antitrust, securities and similar
“public law” claims based on statutory protections, which may be
available regardless of the terms of the parties' agreement.
As discussed elsewhere, arbitration is a creature of contract and the

arbitrators are, in very important respects, mandated to fulfill
contractual functions. Given this, questions arise as to the legal
basis for an arbitrator to resolve a dispute based on a “mandatory”
public policy or statutory right, not incorporated in (and instead, in
some cases, excluded by) the parties' arbitration and choice-of-law
agreement. In particular, queries are sometimes raised concerning
an arbitrator's power to override the substantive terms of the parties'
contract or the choice-of-law agreement (in both cases, based upon
the application of mandatory laws).
Despite these queries, almost all contemporary authorities have

concluded that, if the parties' arbitration agreement encompasses
statutory or public law claims, that agreement will ordinarily be a
sufficient justification for the arbitrators' power to resolve such
claims. Under this view, the parties will have granted the arbitrator
the authority to resolve all disputes, including mandatory law or
public policy disputes, and unless some specific legislative act
forbids that grant, it should be enforced. As the U.S. Supreme Court
reasoned in its classic Mitsubishi Motors Corp. v. Soler Chrysler-
Plymouth, Inc. decision:
[T]he international arbitral tribunal owes no prior

allegiance to the legal norms of particular states [and]
has no direct obligation to indicate their statutory
279
dictates. The tribunal, however, is bound to effectuate

the intentions of the parties. Where the parties have
agreed that the arbitral body is to decide a defined set
of claims which includes, as in these cases, those
arising from the application of American antitrust law,
the tribunal therefore should be bound to decide that
dispute in accord with the national law giving rise to
the claim. (64)
Following this reasoning, courts and tribunals have generally

concluded that, when arbitrable public law claims fall within an
arbitration clause, arbitrators not only can but must resolve them. (65)
[C]. Implied Choice-of-Law Agreements
Choice-of-law agreements may be implied or tacit, as well as

express. This has particular importance in the context of
international commercial arbitration.
As with most legal systems, Article 3(1) of the Rome Regulation

(and, earlier, the Rome Convention) recognizes the possibility of
implied choice-of-law agreements, providing that a choice-of-law
agreement must be “expressed or demonstrated with reasonable
certainty by the page "249" terms of the contract or the
circumstances of the case.” (66) U.S. authority is even less
demanding, with the Restatement (Second) Conflict of Laws
providing:
[E]ven when the contract does not refer to any state,

the forum may nevertheless be able to conclude from
its provisions that the parties did wish to have the law
of a particular state applied. So the fact that the
contract contains legal expressions, or makes
reference to legal doctrines, that are peculiar to the
local law of a particular state may provide persuasive
evidence that the parties wished to have this law
applied. (67)
A recurrent question is whether the parties' selection of the arbitral

seat constitutes an implied choice of the seat's substantive law. As
discussed above, this was the historic approach in some legal
systems. More recent authority generally rejects this approach,
holding instead (as discussed above) that the selection of an arbitral
seat is not necessarily a choice of either the conflict of laws rules or
the substantive law of the seat. (68)
As also discussed above, however, a considerable body of authority

holds that the selection of the seat presumptively indicates the
choice-of-law rules that are applicable in the arbitration. (69) At the
same time, some contemporary authorities treat the parties'
selection of the seat as a simultaneous presumptive, albeit implied,
choice of the substantive law governing their contact. In the words of
one English decision:
An agreement to refer disputes to arbitration in a

particular country may carry with it, and is capable of
carrying with it, an implication of inference that the
parties have further agreed that the law governing the
contract (as well as the law governing the arbitral
procedure) is to be the law of that country. But I
280
cannot agree that this is a necessary or irresistible

inference or implication. (70)
Thus, in particular cases, the selection of the arbitral seat, together

with other factors (such as the nature of the transaction, language of
the contract and arbitral institution) may constitute an implied choice
of the law governing the parties' contract. Nonetheless, there are
often instances where selection of the seat is not held to be an
implied choice of substantive law. (71)
page "250"
[D]. Defects in Formation of Choice-of-Law Agreement
As with other contracts, the validity of choice-of-law agreements

may be challenged, including for defects in formation. Thus,
misrepresentation, duress, unconscionability, mistake and other
contract law defenses can be relied upon to challenge the existence
or validity of a choice-of-law clause. In principle, these defenses
should be applied to the choice-of-law clause as a separable
agreement (comparable to the arbitration agreement). (72)
[E]. Other Grounds for Challenging Choice-of-Law Agreements
In addition to objections based upon public policy or mandatory

laws, tribunals have rejected a wide variety of other arguments
(impressive in the ingenuity that they reflect) objecting to the validity
of choice-of-law agreements. Thus, tribunals have refused to
conclude that a choice-of-law agreement was invalid because it
selected a law that lacked a reasonable relation to the parties'
transaction, that the chosen law was not “complete,” that the chosen
law was not sufficiently explicit, that the parties had picked a law that
was “surprising,” or that the parties had chosen a law that was
unfair. (73) For the most part, arbitral practice and other authorities
reject these arguments.
§13.04. Choices of Substantive Law in Choice-of-Law

Agreements
The most vital element of almost any choice-of-law agreement is the

law that it selects. As a practical matter, there is no single answer to
the question of what substantive law a party should prefer in a
particular commercial relationship. The answer is influenced by a
variety of considerations concerning the parties' identities and
interests, the nature of the transaction and the potentially applicable
laws. Nonetheless, several general guidelines are useful.
[A]. Considerations Affecting Choice of Substantive Law
Parties to international transactions often instinctively desire their

own national law to apply, in part because it is familiar to them. This
view is, however, often uninformed by the consequences of the
application of local law to the types of disputes most likely to arise
between the parties. In some instances, a party's “home” state law
will provide it with no benefits and may actually be detrimental to it.
(74)
281
Failing selection of their home country's law, parties often prefer a

law that is developed, stable and well-adapted to commercial
dealings. In practice, parties pay particular attention to the existence
of a well-articulated body of commercial and corporate law.
Conversely, parties ordinarily avoid the law of states that are newly-
formed or that has limited authority on commercial issues. page
"251" Equally important, parties typically avoid jurisdictions which
are potentially subject to future sea changes in legal order.
It is important to select a law with which the parties are either

familiar or whose content they can ascertain with reasonable ease.
That typically means the law of a jurisdiction where a party conducts
business or where it can consult reliable counsel efficiently. Of
course, parties usually select the law of a state with published
statutes and judicial decisions, as well as commentaries, rather than
only expert opinion.
Parties sometimes attempt to bargain for application of a law that

will be “favorable” to them. This effort is often chimerical, because of
the difficulty of predicting what issues will arise in some future
dispute and on what side of these issues a party may be.
Nonetheless, in specialized fields, such an effort can be worthwhile.
For example, the laws of financial centers, such as New York and
London, frequently are desirable for lenders or insurers.
In dealings with foreign states, parties will generally insist, rightly, on

application of the laws of a different jurisdiction. This reduces risks
that the foreign state will enact legislative or other measures that are
designed to improve its position in a contractual dispute.
Finally, some issues may be subject to mandatory national law

applicable to local aspects of a transaction. Matters relating to real
estate, corporate organization and security interests are familiar
examples of matters which ordinarily cannot be contracted out of by
a choice-of-law clause. Particular care must be devoted to this issue
in joint venture or similar shareholder transactions, where the local
law of the place where the parties' corporate vehicle is incorporated
may mandatorily apply to certain matters relating to corporate
organization.
[B]. Choice of Multiple or Overlapping National Laws
Parties sometimes agree to choice-of-law agreements selecting the

laws of two or more states to govern the same contractual
provisions. These agreements can be either outright choices of two
laws (i.e., “this contract shall be governed by the laws of State A and
State B”) or overlapping choices (i.e., “this contract shall be
governed by the rules common to the laws of State A and State B”).
Choice-of-law provisions of this nature should not be confused with
“split” choice-of-law clauses, which select different laws to apply to
different sets of contractual provisions within a single contractual
relationship (discussed below).
The former types of provisions are likely valid in most developed

jurisdictions. (75) Despite that, overlapping choice-of-law provisions
are almost always ill-advised compromises that produce few of the
advantages of a choice-of-law clause (predictability, efficiency), and
are instead an invitation to unproductive disputes. A leading English
judge remarked, of a clause selecting “the principles in common to
both English and French law,” that “the hybrid system of law … has
a superficial attraction, but I suspect that it will lead to lengthy and
282
expensive dispute.” (76) His observation was correct, and also has
broader force: an overlapping choice-of-law clause invites disputes
over the contents of two legal systems, as well as introducing a
further, unpredictable question of how the two systems interact and
fails to address issues of public policy and mandatory laws.
page "252"
[C]. “Split” Choice-of-Law Clauses
Some choice-of-law agreements attempt to specify different

substantive laws for different aspects of the parties' relationship.
(This process is sometimes referred to as “depeçage.”) One law
may be applied to payment obligations, or intellectual property
rights, while another law applies to other matters. A leading example
of this approach is the so-called Bermuda Form insurance policy,
which contains a choice-of-law clause providing for the application of
New York law, save for specific issues which are governed by
English law. (77)
“Split” choice-of-law clauses generally give rise to no serious

questions as to validity. They are expressly permitted under most
legal systems, including the Rome I Regulation (and Rome
Convention) and the Restatement (Second) Conflict of Laws. (78) That
said, split choice-of-law agreements also involve significant risks:
inevitably, determining the interaction and “border” between the two
legal systems which are selected can give rise to disputes.
[D]. Choice of “Floating” National Law
Parties sometimes draft choice-of-law agreements to provide a

“floating” choice of law, which may vary with future developments. In
particular, choice-of-law clauses may provide that, in a claim brought
by Party A, the parties' dispute will be governed by the laws of Party
B's home jurisdiction. The notion underlying these provisions is one
of “rough justice,” that also seeks to discourage the bringing of
claims.
Whatever the merits of this objective, its implementation via a

“floating” choice-of-law clause is defective: the purpose of a choice-
of-law agreement is to provide predictability, efficiency and
neutrality. A “floating” choice-of-law clause contradicts these goals,
by producing a changing calculation that rewards gamesmanship
and creates uncertainty. Despite the broad deference to party
autonomy with regard to choices of substantive law generally, some
courts have viewed “floating” choice-of-law agreements with
disfavor. (79)
[E]. Non-National Choice-of-Law Agreements
Although it is unusual, parties occasionally agree to choice-of-law

clauses selecting rules not derived from a national legal system. A
wide array of alternatives are encountered, including general
principles of law; lex mercatoria or law merchant; the UNIDROIT
Principles of Contract Law; “principles common to the laws of states
A and B”; “principles of international law”; or “the laws of state A, to
the extent not inconsistent with international law.”
page "253"
283
“Non-national” choice-of-law formulae give rise to significant

questions of validity and interpretation, and, as a consequence, are
ordinarily used only in contracts with states or state-entities. Some
authorities take the view that a choice-of-law agreement can only
validly select a national legal system to provide the “law” governing
a contract. (80) In contrast, legislation enacted in a number of
jurisdictions in the past three decades provides for the validity of non
-national choice-of-law clauses in international arbitrations. This
approach was followed by Article 28(1) of the UNCITRAL Model
Law, which provides that an arbitral tribunal shall decide the parties'
dispute in accordance with the “rules of law” which they have
selected. (81) A number of other international and national instruments
have confirmed the validity, in international arbitrations, of choice-of-
law clauses selecting at least some non-national legal systems. (82)
[1]. General Principles of Law
Some non-national choice-of-law clauses provide for application of

“general principles of law,” particularly in contracts with states or
state entities. The meaning of this formula is controversial, but it is
generally intended to refer to principles of law common to leading
legal systems. There are inevitable difficulties in identifying the
contents of such principles, particularly with sufficient specificity to
provide meaningful guidance in commercial contexts. These
difficulties lead parties, in most cases, to avoid such provisions. (83)
[2]. Lex Mercatoria
Some academic commentators have been attracted to the concept

of a lex mercatoria, or “merchants' law,” that organically develops
out of commercial dealings and judicial or arbitral decisions
concerning such dealings. The concept of lex mercatoria is ill-
defined and has given rise to controversy regarding issues of validity
and interpretation.
Virtually no arbitral agreements select, and very few awards have

been based on, lex mercatoria. This paucity of authority is not
surprising: parties are well-advised not to select lex mercatoria as
the “law” governing their contractual relations. Whatever else may
be said, in its current form, lex mercatoria lacks the detail,
comprehensiveness and predictability that parties to most
commercial page "254" transactions require. There are also
doubts about the validity and enforceability of choice-of-law
agreements selecting lex mercatoria. (84)
[3]. UNIDROIT Principles of International Commercial Contracts
The International Institute for the Unification of Private Law

(“UNIDROIT”) first published a set of “UNIDROIT Principles of
International Commercial Contracts” in 1994, which were revised in
2004. (85) The UNIDROIT Principles were designed to establish a
neutral set of international rules of contract law, including
interpretation, validity, performance and negotiation of contracts.
The UNIDROIT Principles are optional: they do not purport to apply
generally, but are available for parties to select through their choice-
of-law agreements. Nonetheless, arbitral tribunals have looked to
the UNIDROIT Principles in some instances, for persuasive
284
guidance. (86) As one ICC award explained, “[r]ather than argue

principles or general guidelines, the UNIDROIT Principles are mostly
constituted by clearly enunciated and specific rules coherently
organized in a systematic way.” (87)
In general, commercial parties have been reluctant to adopt the

UNIDROIT Principles in choice-of-law agreements, notwithstanding
the efforts devoted to them. That is in part due to doubts about the
interaction between a non-national legal system and generally-
applicable national law. It is also in part due to the lack of detail and
judicial precedent, compared to legal systems in leading commercial
centers.
[F]. Stabilization Clauses
In some transactions, parties may seek protection against future

changes in the applicable law. This protection can take the form of
“freezing” or “stabilization” clauses, which fix the legal system
applicable to the parties' agreement as that system stands at a
specified date (without regard to subsequent legislative or other
developments) or that, alternatively, either forbid giving effect to
specified legislative changes or require compensation for such
changes. Such provisions are generally used only in agreements
between foreign investors and states or state-owned entities, where
the possibilities for legislative interference are most substantial.
Most authorities that address the issue conclude that stabilization
clauses are valid. (88)
[G]. Amiable Composition and Ex Aequo et Bono
A few dispute resolution clauses provide for arbitration “ex aequo et

bono” or for an arbitrator to act as “amiable compositeur.” The
essential meaning of each term is that arbitrators are not obliged
page "255" to decide the parties' dispute in accordance with
legal rules; rather, the arbitrators are to decide in light of general
notions of fairness, equity and justice. (89)
The enforceability of agreements calling for an arbitrator to act as

amiable compositeur, or ex aequo et bono, is largely settled. The
European Convention provides, in Article VII(2), that “the arbitrators
shall act as amiables compositeurs if the parties so decide and if
they may do so under the law applicable to the arbitration,”
recognizing both the use of agreements to arbitrate amiable
compositeur, as well as some doubts as to the validity of such
agreements. Most national laws also give effect to agreements
vesting arbitrators with powers as amiables compositeurs or ex
aequo et bono. The Model Law does so expressly, in Article 28(3),
as do other national laws. (90) There are a few exceptions to this
general acceptance, for example, where states have omitted Article
28(3) from their version of the Model Law. (91)
Neither national laws nor other sources of authority lightly presume

that parties have agreed to amiable composition or arbitration ex
aequo et bono. Both national laws and institutional rules generally
authorize arbitrators to act as amiable compositeurs, or to decide ex
aequo et bono, only if the parties expressly agree to such
provisions. (92)
285
§13.05. Interpretation of Choice-of-Law Agreements
Assuming that a choice-of-law clause is valid and enforceable, it

also must be interpreted. A number of interpretive issues arise with
regard to choice-of-law agreements.
[A]. “Stand-Alone” Character of Choice-of-Law Clause
In general, choice-of-law provisions are included in a separate

clause of the parties' contract, rather than as part of an arbitration or
choice-of-forum clause. Inclusion of a choice-of-law clause within
the arbitration agreement can, particularly if not drafted clearly, give
rise to arguments that the clause was intended to apply only to the
arbitration agreement itself or to the arbitral procedures, rather than
to select the applicable substantive law; a stand-alone choice-of-law
clause helps avoid these concerns.
page "256"
[B]. The Legal Rules Selected by Choice-of-Law Agreements
The existence of a choice-of-law clause, selecting the law of a

particular state, sometimes gives rise to questions about what legal
rules the parties have selected.
[1]. Renvoi versus “Whole Law”: Does the Choice-of-Law

Agreement Select Substantive Rules or Conflict of Laws Rules?
A recurrent question is whether the selection of a legal system (e.g.,

“laws of State X”) refers only to the substantive rules of the chosen
system, or also to that system's conflict of laws rules. If the latter,
then a separate conflicts analysis would be required,
notwithstanding the choice-of-law agreement, applying the conflicts
rules of the chosen state (in the above example, State X). This
renvoi would very seldom accord with the expectations of parties,
who specify the law governing their relations in significant part to
avoid any conflict of laws analysis and to procure the benefits of a
specifically-identified, predictable legal system.
Accordingly, authorities in most jurisdictions interpret choice-of-law

clauses as specifying the applicable substantive (and not conflict of
laws) rules, even if an anti-renvoi provision is not included in the text
of the clause. For example, Article 28(1) of the UNCITRAL Model
Law provides that “[a]ny designation of the law or legal system of a
given State shall be construed, unless otherwise expressed, as
directly referring to the substantive law of that State and not to its
conflict of laws rules.” Virtually all other international instruments and
national authorities are similar, as are awards on the subject. (93)
[2]. Procedural Law of the Arbitration
It is sometimes argued that a choice-of-law clause selects the

procedural law of the arbitration, but not the substantive law
governing the parties' underlying dispute. This raises questions of
interpretation that turn in part on the wording of the choice-of-law
clause. In general, however, authorities have properly concluded
that when parties choose a law, they intend to choose the
286
substantive law governing the merits of their dispute. (94) This

accords with the likely intentions of commercial parties, who will not
ordinarily appreciate conflict of laws complexities and who will be
most focused on the substance (not the procedure) of their dispute.
This is particularly true if the parties' chosen law is different from that
of the arbitral seat – and interpreting the choice-of-law clause as
selecting the procedural law of the arbitration would produce
undesirable and dangerous complexities.
[3]. “Procedural” Issues
Questions also arise as to the extent to which a choice-of-law

clause, that selects the substantive law governing the parties'
dispute, also applies to “procedural” issues (such as burdens of
page "257" proof, pleading requirements). Choice-of-law
clauses are often not interpreted as extending to “procedural”
issues, which are instead considered to be subject to the generally-
applicable rules of civil procedure of the parties' contractual forum.
Some national courts have held that a “contractual” choice-of-law

provision is “deemed to import only substantive law, … not
procedural law.” (95) For example, most choice-of-law clauses have
not been regarded as extending to burdens of proof, pleading
requirements, discovery mechanisms, or joinder of parties. Other
questions, such as statutes of limitations, rights to legal expenses
and interest raise more difficult issues; they are sometimes regarded
as substantive (and subject to commonly-used choice-of-law
provisions) and sometimes treated as procedural (and arguably
subject to the forum's rules). (96)
[4]. Non-Contractual Issues
It is also frequently argued that a chosen law applies only to issues

or claims based directly on the parties' contract, and not to “extra-
contractual” issues (like tort claims or unfair competition claims).
This parallels issues concerning the scope of arbitration clauses and
their application to extra-contractual claims (discussed above).
The scope of a choice-of-law clause is primarily a matter of the

parties' intent and the language of their agreement. In general,
international arbitrators tend to err on the side of expansiveness in
interpreting the scope of choice-of-law provisions. While nice points
concerning the precise meaning of particular choice-of-law clauses
can be diverting, most tribunals take the practical view that, in
selecting a particular law to govern their contract, the parties
intended that law to govern all of their dealings relating to the
contract. (97)
In practice, choice-of-law clauses are sometimes drafted in narrower

terms than arbitration clauses. As discussed above, arbitration
agreements often extend to all disputes “relating to” or “arising in
connection with” the parties' contract. These formulations usually
reach non-contractual claims, such as those sounding in tort, as well
as contractual ones. In contrast, choice-of-law clauses are often
drafted along the following lines: “This agreement shall be
interpreted in accordance with, and governed by, the laws of [State
X].” Formulations such as this can be interpreted as extending solely
to the parties' contractual rights and duties, and not to non-
contractual issues.
287
Alternatively, choice-of-law clauses can be drafted even more

narrowly, such as: “This agreement shall be construed in
accordance with the laws of [State Z].” This formulation arguably
applies only to questions of contract interpretation, and not to issues
of validity, enforceability, excuses for non-performance and capacity,
much less to questions of tort or other non-contractual rights. By
leaving unresolved the choice of law applicable to such issues, this
formulation fails to provide the predictability that motivates such
agreements.
page "258"
§13.06. Minimal Judicial Review of Arbitrators' Choice of Law

Decisions
Neither the New York Convention nor most arbitration statutes

expressly permit non-recognition of an award because the
arbitrators erred in their choice-of-law analysis. Rather, as noted
above, and in the absence of a choice-of-law agreement, the
arbitrators' choice-of-law decisions are subsumed within their rulings
on the merits of the parties' dispute, and thus subject to the general
presumption in favor of recognition under the Convention and most
arbitration legislation. Thus, except where statutory protections or
public policy issues are involved, judicial review of arbitrators' choice
-of-law decisions concerning the substantive law applicable to the
merits of the parties' dispute is usually minimal. (98)
There are grounds under the Convention and many arbitration

statutes for non-recognition of arbitral awards that could be invoked
to permit a national court to reject an arbitrator's choice of the
applicable substantive law. In particular, awards that either violate
applicable public policy by refusing to apply a mandatory law would
be subject to non-recognition under Article V(2) (b), while awards
that plainly misapply applicable conflicts rules may be liable to
setting aside in the seat where some form of merits review is
available (as discussed below). In practice, however, the arbitrators'
selection of the substantive law applicable to the parties' dispute is
virtually never invoked as grounds for annulling or denying
recognition of an award. (99)
page "259"
1
Scherk v. Alberto-Culver Co., 417 U.S. 506, 516 (U.S. S.Ct. 1974).
2
See supra pp. 55–58.
3
See infra pp. 235–36, 245–46.
4
See G. Born, International Commercial Arbitration 2113–16
(2009).
5
See infra pp. 311–15; see G. Born, International Commercial
Arbitration 2111–12 (2009). Articles II and V(1) (a) of the New York
Convention provide choice-of-law rules for the law governing the
arbitration agreement. In contrast, the Convention does not
expressly address the choice-of-law applicable to the substance of
the parties' dispute. Nonetheless, the Convention requires
Contracting States to recognize awards without engaging in any
substantive review of the merits of the award; that obligation applies
288
equally to the arbitrators' choice-of-law decisions concerning the

substantive law applicable to the merits of the parties' dispute.
6
L. Collins (ed.), Dicey, Morris & Collins on The Conflict of Laws
¶16-010 (14th ed. 2006).
7
See G. Born, International Commercial Arbitration 2113–14, 2121
–25 (2009).
8
See German ZPO, §1051(2) (“Failing any designation by the
parties, the arbitral tribunal shall apply the law of the State with
which the subject-matter of the proceedings is most closely
connected.”); Japanese Arbitration Law, Art. 36 (absent agreement,
arbitrators to apply “the substantive law of the State with which the
civil dispute subject to the arbitral proceedings is most closely
connected”); Italian Code of Civil Procedure, Art. 834.
9
–35 (2009). See also New Zealand Arbitration Act, 28(2) (“apply the
law determined by the conflict of laws rules which it considers
applicable”).
10
Indian Arbitration and Conciliation Act, Art. 28(1)(b)(iii) (“apply the
rules of law it considers to be appropriate given the circumstances
surrounding the dispute”); Netherlands Code of Civil Procedure, Art.
1054(2) (“in accordance with the rules of law it considers
appropriate”). See G. Born, International Commercial Arbitration
2116, 2135–36 (2009).
11
See supra pp. 83–84 & infra pp. 248–49.
12
See, e.g., IACAC Rules, Art. 30(1); PCA Rules, Art. 33(1); CIDRA
Rules, Art. 32(1) (“apply the law determined by the conflict of laws
rules which it considers applicable”).
13
See, e.g., ICDR Rules, Art. 28(1); LCIA Rules, Art. 22(3); SCC
Rules, Art. 24(1); WIPO Arbitration Rules, Art. 59(1).
14
See, e.g., DIS Rules, §23(2) (“the law of the State with which the
subject-matter of the proceedings is most closely connected”); Swiss
International Arbitration Rules, Art. 33(1) (“the law of the State with
which the subject matter of the proceedings is most closely
connected”).
15
(2009).
16
See, e.g., DIS Rules, §23(2); Swiss International Arbitration
Rules, Art. 33(1); supra p. 237.
17
See supra pp. 235–36; Swiss Law on Private International Law,
Art. 187; Japanese Arbitration Law, Art. 36.
18
See supra p. 234. As discussed above, this is what the
UNCITRAL Model Law and most institutional rules provide. See
supra p. 236.
19
French New Code of Civil Procedure, Art. 1496; supra p. 236.
20
Institute of International Law, Resolution on Arbitration in Private
International Law 1957 (Amsterdam), Tableau des Résolutions
Adoptées (1957–1991) 237, at Art. 11(1) (1992) (emphasis added).
21
L. Collins (ed.), Dicey, & Morris on The Conflict of Laws 543 (11th
ed. 1987). See also Mann, Lex Facit Arbitrum, reprinted in, 2 Arb.
Int'l 241, 251 (1986).
22
–25 (2009).
23
A. Ehrenzweig, Conflict of Laws 540 (1962) (emphasis added).
24
Goldman, La lex mercatoria dans les contrats et l'arbitrage
internationaux: réalité et perspectives, 106 J.D.I. (Clunet) 475, 492
(1979).
25
Award in ICC Case No. 1422, 101 J.D.I. (Clunet) 884 (1974).
289
26
See, e.g., Partial Award on Jurisdiction and Admissibility in ICC
Case No. 6474, XXV Y.B. Comm. Arb. 279, 291 (2000) (“Having no
‘lex fori’ as such, the Arbitral Tribunal appears thus to enjoy a wide
discretion with regard to both the characterizations of the question
and of the choice of the applicable law.”). See G. Born, International
Commercial Arbitration 2133–35 (2009).
27
See G. Born, International Commercial Arbitration 2135 (2009).
28
(2009).
29
Grigera Naón, Choice-of-Law Problems in International
Commercial Arbitration, 289 Recueil des Cours 9, 191 (2001)
(“Arbitral Tribunals normally make special efforts to show that the
substantive solution found for the dispute is either one pointed out
by the private international law systems of the national jurisdictions
reasonably connected with the dispute (false ‘conflit de systèmes’)
or by a generally accepted conflict-of-laws rule.”). On a practical
level, the cumulative approach also provides some insulation
against a challenge for failure to apply the proper conflict of laws or
substantive rules.
30
See supra pp. 237–38.
31
32
See supra pp. 237–39 for a discussion of these standards in
selecting the law applicable to the arbitration agreement.
33
Award in ICC Case No. 7071, in Grigera Naón, Choice-of-Law
Problems in International Commercial Arbitration, 289 Recueil des
Cours 9, 236 n. 249 (2001).
34
–31 (2009).
35
See, e.g., Award in ICC Case No. 4237, X Y.B. Comm. Arb. 52
(1985) (“The decided international awards published so far show a
preference for the conflict rule according to which the contract is
governed by the law of the country with which it has the closest
connection.”); Harnischfeger Corp. v. Ministry of Roads & Trans.,
Partial Award No. 144-180-3 (13 July 1984), 7 Iran-US C.T.R. 90, 99
(1984) (applying “under general choice of law principles, the law of
the United States, the jurisdiction with the most significant
connection with the transaction and the parties”).
36
See infra pp. 242–43.
37
–29 (2009); infra pp. 245–46, 254.
38
(2009); infra pp. 254–83.
39
Swiss Law on Private International Law, Art. 187(1) (emphasis
added); Indian Arbitration and Conciliation Act, Art. 28(b)(iii); Ontario
Arbitration Act, §32(1).
40
See G. Born, International Commercial Arbitration 2142–44,
2230, 2235–36 (2009).
41
See supra pp. 235–36, 239.
42
(2009).
43
Restatement (Second) Conflict of Laws §142 e, §143 comment c
(1971).
44
See Schwenzer & Manner, The Claim is Time-Barred: The Proper
Limitation Regime for International Sales Contracts in International
Commercial Arbitration, 23 Arb. Int'l 293 (2007).
45
See European Convention, Art. VII(1); UNCITRAL Rules, Art. 35
(3); G. Born, International Commercial Arbitration 2146–48 (2009).
290
46
In ICC arbitrations, the parties' contract reportedly contained
choice-of-law clauses in 88% of all cases in 2009 (81% in 2005). In
99% of cases filed in 2010, parties chose state law. Other choices
were the United Nations Convention on Contracts for the
International Sale of Goods (7 contracts), ICC's Incoterms rules (2
contracts) and amiable composition (1 contract). ICC, 2005
Statistical Report, ICC Ct. Bull. 16(1); ICC, 2010 Statistical Report,
ICC Ct. Bull. 22(1).
47
See supra p. 233.
48
For discussion of the drafting of choice-of-law clauses, see G.
Born, International Arbitration and Forum Selection Agreements:
Drafting and Enforcing 119 et seq. (3d ed. 2009); J. Paulsson et al.,
The Freshfields Guide to Arbitration and ADR Clauses in
International Contracts (1999).
49
New York Convention, Arts. V(1)(a) & V(1)(d). See supra pp. 147
–50.
50
European Convention, Art. VII(1). The ICSID Convention also
expressly recognizes the parties' general freedom to agree upon the
substantive law governing their dispute. Article 42 of the Convention
provides that “[t]he Tribunal shall decide a dispute in accordance
with such rules of law as may be agreed by the parties.”
51
See infra p. 247.
52
As with the European Convention, Article 28(1) applies not
merely to contractual matters, but also to non-contractual claims or
defenses.
53
(2009).
54
G. Born & P. Rutledge, International Civil Litigation in United
States Courts 468–78, 758–60 (5th ed. 2011).
55
Saleh, The Recognition and Enforcement of Foreign Arbitral
Awards in the States of the Arab Middle East, in J. Lew (ed.),
Contemporary Problems in International Arbitration 340, 341–42
(1986); A. El-Ahdab, Arbitration with the Arab Countries 111, 307,
382, 763 (2d ed. 1999).
56
See, e.g., LCIA Rules, Art. 22(3); ICDR Rules, Art. 28(1); WIPO
Arbitration Rules, Art. 59(1); JCAA Rules, Art. 41(1).
57
See G. Born & P. Rutledge, International Civil Litigation in United
States Courts 760–61 (5th ed. 2011).
58
(2009).
59
Richardson v. Mellish [1823–34] All E.R. Rep. 258 (Common
Pleas) (“a very unruly horse, and when once you get astride it you
never know where it will carry you”).
60
W.R. Grace & Co. v. Local Union 749, 461 U.S. 757 (U.S. S.Ct.
1983).
61
Restatement (Second) Conflict of Laws §187 comment g (1971).
62
Mayer, Mandatory Rules of Law in International Arbitration, 2 Arb.
Int'l 274 (1986) (“Mandatory rules of law are a matter of public policy
(ordre public), and moreover reflect a public policy so commanding
that they must be applied even if the general body of law to which
they belong is not competent by application of the relevant rule of
conflict of laws.”).
63
(2009).
64
Mitsubishi Motors, 473 U.S. at 636–37 & n.19.
65
(2009).
291
66
See also Hague Convention of 15 June 1955 on the Law
Applicable to International Sales of Goods, Art. 2(2)
(“unambiguously result from the provision of the contract”).
67
Restatement (Second) Conflict of Laws §187 comment a (1971).
Authority in other jurisdictions is to the same effect. See G. Born,
International Commercial Arbitration 2206–07 (2009).
68
See supra p. 239.
69
See supra p. 238.
70
Compagnie d'Armement Maritime SA v. Compagnie Tunisienne
de Nav. [1971] A.C. 572, 588 (House of Lords).
71
See, e.g., Mitsubishi Corp. v. Castletown Nav. Ltd [1989] 2
Lloyd's Rep. 383 (Q.B.) (where all other connections pointed
towards Japanese substantive law, selection of London as arbitral
seat did not constitute choice of English substantive law: “This is
one of those exceptional cases where the other indications of choice
-of-law are so strong that they displace the inference to be drawn
from the printed arbitration clause [specifying an English arbitral
seat].”).
72
–85, 2205–06 (2009).
73
74
Conversely, parties often wish to avoid the law of the place where
their counter-party has its principal place of operations. That
predisposition rests on the assumption that this law will be favorable
to that party. In reality, this often is not the case, although a party
can be presumed to be reasonably well informed about “its” law and
to have advantages in the future in ascertaining its content (by
reason of established relations with counsel).
75
(2009).
76
Channel Tunnel Group Ltd v. Balfour Beatty Constr. Ltd [1992] 1
Q.B. 656, 675 (English Court of Appeal).
77
R. Jacobs, L. Masters & P. Stanley, Liability Insurance in
International Arbitration – The Bermuda Form ¶¶3.19 et seq. (2004).
78
Rome Convention, Art. 3(1) (“By their choice the parties can
select the law applicable to the whole or a part only of the
contract.”); Rome I Regulation, Art. 3(1) (same); Restatement
(Second) Conflict of Laws §187 (1971); G. Born, International
Commercial Arbitration 2222–23 (2009).
79
See, e.g., Amin Rasheed Shipping Corp. v. Kuwait Ins. Co [1983]
2 All E.R. 884, 890–91, 895 (House of Lords); Astro Vencedor
Compania Naviera SA of Panama v. Mabanaft GmbH, The
Damianos [1971] 2 All E.R. 1301 (English Court of Appeal). Contra
Black Clawson Int'l Ltd v. Papierwerke Waldhof Aschaffenburg AG
[1981] 2 Lloyd's Rep. 446 (Q.B.).
80
(2009). Outside the arbitration context, some courts have held that
the contract.”); Rome I Regulation, Art. 3(1) (same); Restatement
from agreeing to a non-national legal system. Shamil Bank of
Bahrain v. Beximco Pharm. Ltd [2004] EWCA Civ. 19 (English Court
of Appeal) (Arts. 1(1) and 3(1) refer to “a choice between the laws of
different countries”).
81
UNCITRAL Model Law, Art. 28(1). In contrast, Article 28(2)
provides that, in the absence of agreement by the parties, the
tribunal shall “apply the law determined by the conflict of laws rules
which it considers applicable.” The latter formulation refers
specifically to “the law,” selected by “conflict of laws rules,” in
contrast to the “rules of law” permitted by Article 28(1). See also
292
supra pp. 234, 241, 242. The validity of non-national choice-of-law

clauses was first addressed by Article 1511 of the former French
Code of Civil Procedure, which provided that parties are free to
agree upon the “rules of law” governing their contract. This formula
was designed specifically to permit parties to contract for the
application of non-national legal systems, rather than only national
“laws.” See G. Born, International Commercial Arbitration 2227
(2009).
82
(2009).
83
(2009).
84
(2009).
85
UNIDROIT, UNIDROIT Principles of International Commercial
Contracts (2004).
86
(2009).
87
Partial Awards in ICC Case No. 7110, 10(2) ICC Ct. Bull. 39
(1999).
88
(2009); Texaco Overseas Petroleum Co. v. Libyan Arab Republic,
Ad Hoc Award (19 January 1977), IV Y.B. Comm. Arb. 177, 183
(1979) (“The recognition by international law of the right to
nationalize is not sufficient ground to empower a State to disregard
its commitments because the same law also recognizes the power
of a State to commit itself internationally, especially by accepting the
inclusion of stabilization clauses in a contract entered into with a
foreign private party.”).
89
(2009). There is debate about what precisely the arbitrators'
mandate is under such provisions. Some authorities suggest that
arbitrators are freed entirely from legal rules and left to decide
according to their own sense of fairness, while other authorities
suggest that the arbitrators should first apply national law and then
adjust its results if they consider that appropriate and fair.
90
Swiss Law on Private International Law, Art. 187(2) (“The parties
may authorize the arbitral tribunal to decide ex aequo et bono.);
French New Code of Civil Procedure, Art. 1497 (“The arbitrator shall
rule as amiable compositeur if the agreement of the parties
conferred this mission upon him or her.”).
91
(2009).
92
See G. Born, International Commercial Arbitration 2239 (2009);
UNCITRAL Rules, Art. 33(2) (“The arbitral tribunal shall decide as
‘amiable compositeur’ or ‘ex aequo et bono’ only if the parties have
expressly authorized the arbitral tribunal to do so and if the law
applicable to the arbitral procedure permits such arbitration.”); 2012
ICC Rules, Art. 21(3) (“The arbitral tribunal shall decide as amiable
compositeur or ex aequo et bono only if the parties have expressly
authorized the arbitral tribunal to do so.”); LCIA Rules, Art. 22(4).
93
(2009). Nonetheless, many choice-of-law clauses contain exclusions
for the conflicts rules of the chosen state, providing, for example,
“This Agreement is governed by the law of New York, to the
exclusion of its conflict of laws rules.”
94
(2009).
293
95
Woodling v. Garrett Corp., 813 F.2d 543, 551 (2d Cir. 1987).
96
(2009).
97
(2009).
98
(2009); supra p. 247 & infra pp. 325–26.
99
(2009).
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294
295
1 The Law Applicable to Procedural Issues
From: Procedural Issues in International Investment Arbitration

Jeffery Commission, Rahim Moloo
Content type: Book content

Product: Investment Claims [IC]
Series: Oxford International Arbitration Series
Published in print: 22 March 2018
ISBN: 9780198729037
Subject(s):
Precedent — Applicable law
From: Investment Claims (http://oxia.ouplaw.com). (c) Oxford University Press, 2015. All Rights Reserved. Subscriber:
Columbia University; date: 10 January 2020
296
(p. 1) 1 The Law Applicable to Procedural Issues
1. Introduction 1.01
2. Rules of the Arbitration Selected by the Parties 1.03
(a) Mandatory procedural rules 1.05

(b) Non-mandatory procedural rules agreed to by the parties 1.12
3. Gap Filling 1.16
(a) The context of the applicable procedural rules 1.19

(b) Soft-law protocols 1.23
(c) Precedent 1.28
4. Conclusion 1.31
1. Introduction
1.01 International arbitration, as a discipline, is concerned primarily with the body of law
that governs procedure. The source of that law is often a combination of international law,
domestic law, and customary practice. So it is with investment arbitration. Yet, few studies
have sought to place the various sources of arbitral procedural law, let alone in the
investment arbitration context, in a comprehensive normative framework. It is true that
many studies identify the procedural rules chosen by the parties as the applicable
procedural law to the extent that it does not violate any mandatory procedural laws at the
seat of the arbitration (at least in the non-ICSID context); however, such studies rarely
identify a role for other sources of procedural rules, such as customary practice and
precedent.1 (p. 2) The question of the applicable procedural law in investment arbitration is
further complicated in the ICSID context where there is no legal seat of the arbitration. This
chapter’s goal is to identify the various sources of procedural law in investment arbitration,
and to articulate a hierarchy among those sources.
1.02 Thus, we proceed to discuss the various sources of law hierarchically. First, we will
begin by discussing the procedural law selected by the parties to the arbitration. Some of
the laws selected by the parties impose mandatory rules that cannot then be deviated from,
while others are binding, unless the parties later decide on a separate course. Second, we
discuss how to determine the appropriate governing rules when the rules selected by the
parties are silent. Here, we discuss the tribunal’s role to fill ‘gaps’ in the rules, and suggest
that, in doing so, the tribunal and the parties look to the context of the applicable
procedural rules, certain soft law protocols, and prior arbitral practice for guidance.
2. Rules of the Arbitration Selected by the Parties

1.03 International arbitration derives its legitimacy from party consent. The rules
governing the procedure of the arbitration—including the mandatory rules—are derived
from the choices made by the parties. Thus, when considering the law applicable to
procedure in an investment arbitration (like any arbitration), an arbitral tribunal must begin
with the parties’ arbitration agreement.
1.04 As discussed in the Introduction, in the context of investment treaty arbitration,
consent to arbitration is generally perfected when the investor chooses one of the
procedural options offered in an investment treaty. These treaties often provide the choice
to arbitrate under the ICSID system or under the UNCITRAL Rules (or some other non-
ICSID arbitral institution). A choice for ICSID arbitration means that the arbitral tribunal
297
will be guided by the ICSID Convention and the ICSID Arbitration Rules.2 On the other
hand, choosing UNCITRAL arbitration requires an important supplemental choice—the lex
arbitri, or the seat of the arbitration—which governs procedural matters. In this section, we
discuss the implication of the procedural choices made by parties.
(a) Mandatory procedural rules

1.05 No matter the governing international arbitration framework, the procedural law
chosen to apply by the parties will normally contain certain rules that are (p. 3) of primary
importance, from which the tribunal and the parties cannot later deviate. These mandatory
rules can normally be identified by referencing the grounds on which the arbitral award can
be annulled.
1.06 In the ICSID system, the place of the arbitration has no impact on the governing
procedural rules.3 Instead, the ICSID Convention provides for the overarching governing
framework. Article 52 of the ICSID Convention sets out the procedure for the annulment of
ICSID arbitration awards. It provides for an internal mechanism, whereby, on the
application of one of the parties, the chairman of the ICSID Administrative Council will
appoint an ad hoc committee of three persons to preside over the annulment proceedings.4
One of the grounds for annulment relates to the procedure employed by the tribunal over
the course of the proceedings. That ground allows the ad hoc committee to annul the award
where ‘there has been a serious departure from a fundamental rule of procedure’.5 Thus,
certain rules of procedure are important enough to be considered ‘fundamental’, and any
deviation therefrom renders the resulting award susceptible to annulment. Given that a
tribunal’s failure to follow fundamental rules of procedure may render an award annullable,
we suggest that these ‘fundamental’ rules are mandatory.
1.07 Similarly, in the non-ICSID context, where the law at the seat of the arbitration
generally provides the grounds for annulling an award, one (or more) of the grounds for
annulment normally considers the procedure followed by the tribunal. Specifically, Article
34(2)(a)(ii) of the UNCITRAL Model Law (which forms the basis for the arbitration laws in
many countries) allows a court at the seat of the arbitration to annul an award if it was not
given ‘proper notice of the appointment of an arbitrator or of the arbitral proceedings or
was otherwise unable to present his case.’6 Article 34(2)(a)(iv) allows for annulment where:
‘the composition of the arbitral tribunal or the arbitral procedure was not in accordance
with the agreement of the parties, unless such agreement was in conflict with a provision of
this Law from which the parties cannot derogate, or, failing such agreement, was not in
accordance with this Law.’7 Here, the law contemplates (p. 4) certain procedural norms
‘from which the parties cannot derogate’. Like the ‘fundamental’ rules contemplated by
Article 52(1)(d) of the ICSID Convention, the procedural rights that form the basis for the
annulment of an award at the seat of the arbitration ought to be considered mandatory on
an arbitral tribunal.8
1.08 The reference to ‘fundamental’ rules of procedure, and laws ‘from which the parties
cannot derogate’, begs the question: how does one identify the rules that achieve this
higher status, such that they become mandatory? In the non-ICSID context, the
identification of such rules is relatively straightforward. The lex arbitri will normally
identify which rules are derogable, and which are not. For the most part, non-derogable
procedural rules fall into two categories: (a) the right to be heard and to participate fully in
the proceedings, and (b) the right to be treated equally.9 As such, Article 18 of the
UNCITRAL Model Law provides that ‘[t]he parties shall be treated with equality and each
party shall be given a full opportunity of presenting his case’.10 Article 34(2)(a)(ii) itself
contemplates the inability of a party to properly participate in the proceedings—either by
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the failure of being properly notified of the appointment of an arbitrator or of the arbitral
proceedings, or being unable to present his case—as a ground for annulment.11
(p. 5) 1.09 In the ICSID context, however, one must look to international law to understand
what is meant by a ‘fundamental rule of procedure’.12 As explained by the ad hoc committee
in Wena Hotels v. Egypt, such ‘fundamental’ rules are only those ‘set of minimal standards
of procedure to be respected as a matter of international law’.13 Accordingly, ‘only
procedural principles of special importance would qualify as ‘fundamental rules; and … a
mere violation of one of the arbitration rules would not necessarily suffice’.14
1.10 Though a determination of the mandatory rules in the ICSID context requires one to
look at international law, the content of the law is unsurprisingly the same as one normally
finds in domestic laws around the world. Indeed, when several nations adopt a similar legal
principle, it is elevated to a general principle of law.15 Thus, the tribunal in MINE v. Guinea
found that ‘a clear example of such a fundamental rule is to be found in Article 18 of the
UNCITRAL Model Law on International Commercial Arbitration which provides: The parties
shall be treated with equality and each party shall be given a full opportunity of presenting
his case.’16 Similarly, the ad hoc committee in Fraport v. Philippines confirmed that ‘[t]he
requirement that the parties be heard is undoubtedly accepted as a fundamental rule of
procedure, a serious failure of which could merit annulment’.17 The committee went on to
note that:
[t]he right to present one’s case is also accepted as an essential element of the
requirement to afford a fair hearing accorded in the principal human rights
instruments. This principle requires both equality of arms and the proper
participation of the (p. 6) contending parties in the procedure, these being separate
but related fundamental elements of a fair trial.18
1.11 The ad hoc committee in Klockner v. Cameroon also suggested that a tribunal’s lack
of impartiality,19 or the failure of a tribunal to deliberate,20 ought to be considered
violations of fundamental rules of procedure. However, both of those violations could
equally be cast in terms of the failure of a tribunal to treat each party equally, or to properly
consider a particular party’s arguments (thus, ultimately violating the right to be heard).
(b) Non-mandatory procedural rules agreed to by the parties
1.12 Aside from the mandatory rules contained in the applicable procedural law, the
parties are generally free to agree to the rules that will govern the arbitral procedure.
Article 19 of the UNCITRAL Model Law provides as much when it states that ‘[s]ubject to
the provisions of this Law, the parties are free to agree on the procedure to be followed by
the arbitral tribunal in conducting the proceedings.’21 Occasionally, the parties will agree to
certain procedural issues in the arbitration agreement itself,22 though, often, the parties
will merely designate a set of arbitration rules to govern the proceedings. In the investment
arbitration context, the most commonly utilized rules are those of ICSID and UNCITRAL.
Indeed, most investment treaties provide the investor the choice between ICSID arbitration
and ad hoc arbitration under the UNCITRAL Rules.23 In the ICSID (p. 7) context, the
applicable rules include those contained in the ICSID Convention, the ICSID Arbitration
Rules, the Administrative and Financial Regulations, and the Rules of Procedure for the
Institution of Conciliation and Arbitration Proceedings.24 In an UNCITRAL arbitration, the
governing rules are found in the UNCITRAL Arbitration Rules and the law at the seat of the
arbitration.
1.13 Decisions about the applicable arbitration rules can also be made once a dispute
arises. Indeed, arbitration rules are relatively short when compared to domestic legislation
governing civil litigation procedure, so it is not uncommon for the tribunal to consult with
the parties on additional procedural rules to supplement the rules selected by the parties in
the arbitration agreement. Indeed, ICSID Arbitration Rule 20 directs the president of the
299
tribunal to ‘ascertain the views of the parties regarding questions of procedure’, ‘[a]s early
as possible after the constitution of a Tribunal’. Similarly, the UNCITRAL Arbitration Rules
guide the tribunal to make certain procedural determinations—such as the procedural
timetable and the language of the arbitration, subject to agreement by the parties—as soon
as practicable after its constitution.25
1.14 The selection of these supplemental rules is often reflected in the first procedural
order of the tribunal. For instance, the arbitration agreement and the arbitration rules may
not provide guidance on the fees for arbitrators, the place where the hearing will take
place, the language of the arbitration, the number and timing of pleadings, and details
about discovery and other evidentiary matters.26 Several of these matters, among others,
can often be agreed by the parties, and, accordingly, can be reflected in the tribunal’s first
procedural order.27 Indeed, many such procedural orders are beginning to look similar in
form and content.28
(p. 8) 1.15 Once the parties have agreed to a set of arbitral rules, the tribunal must
generally follow them, unless, as discussed above, the parties’ choices derogate from
mandatory rules. A tribunal’s failure to follow the rules selected by the parties may lead to
annulment, especially in the non-ICSID context.29 There are, however, instances where the
parties cannot agree on the rules to apply with respect to a particular procedural issue. It is
in these circumstances that identifying the applicable procedural rule becomes most
challenging but, at the same time, most important. The next section addresses how best to
select the applicable procedural rule where there appears to be a gap in the rules selected
by the parties.
3. Gap Filling

1.16 Arbitral tribunals, like other international tribunals, generally have the authority and
discretion to fill gaps in the procedural rules selected by the parties.30 In this regard,
Article 44 of the ICSID Convention provides that ‘[i]f any question of procedure arises
which is not covered by this Section or the Arbitration Rules or any rules agreed by the
parties, the Tribunal shall decide the question.’31 As explained in the explanatory notes to
the 1968 version of the ICSID Arbitration Rules,
whenever the parties do not agree on some procedural point that is also not, or is
only inadequately covered by these Rules, then the Tribunal has a residual power to
decide the question (Article 44 of the Convention); that provision is, in fact, only
declaratory of the inherent power of any arbitral tribunal to formulate its own rules
of procedure in the event of a lacuna.32
1.17 Article 44 of the ICSID Convention is ‘complemented by Rule 19 ICSID Arbitration

Rules, according to which “the Tribunal shall make the orders required for the
proceeding” ’.33 Likewise, Rule 17(1) of the UNCITRAL (p. 9) Arbitration Rules grants
tribunals the ‘discretion’ to ‘conduct the arbitration in such manner as it considers
appropriate’, but cabins this discretion by binding tribunals to several normative principles.
In accordance with the mandatory rules discussed above, each party must be ‘treated with
equality’ and ‘given a reasonable opportunity of presenting its case’.34 An UNCITRAL
tribunal shall also ‘conduct the proceedings so as to avoid unnecessary delay and expense
and to provide a fair and efficient process for resolving the parties’ dispute’.35 Even in the
absence of express authority, ‘all international courts have the power to make rules of
procedure and procedural orders as a necessary incident of their judicial functions’.36
300
1.18 In filling gaps in the applicable procedural rules, a tribunal is not without guidance.
There are certain important factors to which tribunals can, and should, refer in order to fill
rule gaps. These factors include: (a) considering the context of the applicable procedural
rules, (b) soft law protocols that articulate customary practice in international arbitration,
and (c) relevant international arbitration decisions. We address each of these factors below.
(a) The context of the applicable procedural rules

1.19 It should go without saying that rules of procedure created to fill a particular gap
must not contradict the procedural rules adopted by the parties.37 NAFTA and ICSID
tribunals have expressly recognized this limitation on their gap-filling powers.38 In this
regard, one of the more difficult aspects to the gap-filling exercise is to identify that a gap
in the procedural rules in fact exists.
(p. 10) 1.20 As explained by the tribunal in Abaclat v. Argentina, silence on a particular
procedural issue does not necessarily mean that the rules contain a gap.39 There, in
considering whether or not the mass proceeding with which it was confronted ought to be
conducted in the form of a collective proceeding, the tribunal considered that it was tasked
with the assessment of whether the silence in the ICSID framework with respect to
collective proceedings ‘should be considered a “qualified silence,” meaning an intended
silence indicating that it does not allow for something that is not provided, or whether it
should be considered a “gap,” which was unintended and which the Tribunal has the power
to fill.’40 It is only where a true ‘gap’ is present that a tribunal is tasked with assessing
‘whether the adaptations which would be needed to fill th[e] gap … fall within the scope of
its power as deriving from Article 44 ICSID Convention and/or Rule 19 ICSID Arbitration
Rules’.41 Based on its consideration of the types of investments covered by the applicable
BIT, and the travau préparatoire of the ICSID Convention, the tribunal in the Abaclat case
ultimately decided that ‘the silence of the ICSID framework regarding collective
proceedings is to be interpreted as a “gap” and not as “qualified silence”.’42
1.21 Other ICSID tribunals have refused to gap-fill in instances where no ‘gap’ was found
to exist. For example, in ConocoPhillips v. Venezuela, the tribunal found that it did not have
the discretion to order the reconsideration of an interim decision. Although the Convention
and the Arbitration Rules did not explicitly address the topic, the ‘overall structure and the
detailed provisions of the ICSID Convention were plainly designed to provide for review or
actions in respect of (p. 11) decisions of a tribunal only once the Award was rendered’.43
Thus, the tribunal concluded: ‘[t]here is no gap to be filled by the power proposed here.’44
1.22 Where a gap does exist, a tribunal filling that gap ought to do so within the context of
the overall structure of the applicable rules. As explained by the Abaclat tribunal, ‘a
tribunal’s role is not to complete or improve the ICSID framework in general. As such, a
tribunal’s power to fill gaps will usually be limited to the design of specific rules to deal
with specific problems arising in the proceedings at hand.’45 The tribunal made clear that
‘the filling of the gap does not consist of an amendment of the written rule itself, but rather
of an adaptation of its application in a specific case’,46 and that ‘adaptations made to the
standard procedure must be done in consideration of the general principle of due process
and must seek a balance between procedural rights and interests of each party.’47
(b) Soft-law protocols

1.23 A number of projects—often spearheaded by a senior and diverse group of
international arbitration practitioners—have sought to codify customary international
arbitral practices that are otherwise unaddressed in most arbitration rules. To the extent
301
that such protocols are successful in this pursuit, they can be useful sources for parties and
tribunals in seeking to define a mutually acceptable process where none is defined.
1.24 The most well-known protocol in this regard is the International Bar Association
Rules on the Taking of Evidence in International Arbitration (‘IBA Rules on Evidence’),
which ‘reflect procedures in use in many different legal systems’, and thus ‘may be
particularly useful when the parties come from different legal cultures.’48 Indeed, the IBA
Rules on Evidence are often expressly adopted by the parties, in whole or in part, to apply
to matters of evidence.49 However, even where they are not expressly chosen, both counsel
and tribunals often look to them for guidance. For instance, in Churchill Mining v. Republic
of Indonesia, the (p. 12) tribunal decided that it would ‘seek guidance, where appropriate,
from Articles 3 and 9 of the 2010 International Bar Association Rules on the Taking of
Evidence in International Arbitration’.50 The tribunal explained that the IBA Rules ‘reflect
the current general practice in international arbitration …’.51 Similarly, in Glamis Gold v.
the United States of America, despite the fact that the IBA Rules of Evidence were ‘not
directly applicable to th[e] proceeding’, as part of ‘its authority under Article 15(1) [of the
1976 UNCITRAL Arbitration Rules] the Tribunal may look to the IBA Rules on Evidence for
guidance’.52
1.25 Other protocols that have been referenced in investment arbitrations include:
53
• IBA Guidelines on Conflicts of Interest;
54
• IBA Rules of Ethics for International Arbitrators;
55
• UNCITRAL Notes on Organizing Arbitral Proceedings.
1.26 Oftentimes, it will be the parties themselves who pepper their pleadings with
references to the IBA Rules on Evidence, or other similar protocols, in support of their
position on a particular matter not addressed by the applicable arbitration rules. In
situations where both parties rely on a particular protocol for a procedural issue, it
becomes much easier for the tribunal to accept that protocol as instructive to its decision.56
Indeed, the reference to such protocols is an attempt to meet the parties’ expectations of
how the arbitral procedure will unfold. Following customary practice, especially when
determined by an objective and reliable third party, is more likely to avoid objections from
the parties than charting a novel path to which the parties have not consented.
(p. 13) 1.27 The various soft-law protocols mentioned above, among others, are discussed
in further detail in later chapters dealing with the issues addressed by those protocols.
(c) Precedent
1.28 Relying on a line of prior investment arbitration decisions has many of the same
benefits to relying on soft law protocols. Where a similar procedure has been adopted in a
series of prior investment arbitration cases, it becomes easier to adopt those practices
without objection from the parties. Indeed, especially with respect to procedural matters,
parties and their counsel come to expect that one arbitration will not look materially
different in its form than the next. When a particular procedure has been shown to work
effectively, it makes little sense to try and reinvent the wheel. A fortiori, procedural
decisions taken earlier in the same case should most certainly be followed—barring good
reason—when similar situations arise later in the same proceeding.
1.29 There are, however, two important caveats to adopting the procedural practices of
prior investment arbitration tribunals. First, and most obviously, there is no formal system
of precedent or stare decisis in investment arbitration.57 However, some tribunals have
found themselves to have a ‘duty to adopt solutions established in a series of consistent
cases’.58 And the new Permanent Court of Arbitration Rules includes ‘judicial and arbitral
decisions’ ‘as a subsidiary means for the determination of rules of [international] law’.59 On
the other hand, some tribunals have rejected the proposition that investment tribunals set
302
precedent. For instance, the tribunal in Methanex v. the United States suggested that
investment-treaty tribunals ‘can set no legal precedent, in general or at all’.60 But even the
Methanex tribunal saw value in referring to prior decisions by NAFTA tribunals in deciding
the case.61 Indeed, most tribunals purporting to oppose the (p. 14) idea that investment
tribunals cannot make ‘precedent’, are likely referring to the concept in the formal,
common-law, context. Accordingly, as a practical matter, most investment tribunals would
likely agree that, while prior decisions are not binding, they are persuasive.
1.30 Second, not all prior decisions should be given the same weight. As one of the authors
has detailed elsewhere, careful attention must be given to: (a) differences in the applicable
rules in the precedent being considered (e.g., one should identify if the prior case involved a
procedural rule where a gap may exist in the case at hand), (b) the regime from which the
precedent arises (e.g., given the different contexts, the treatment of a case involving the
Energy Charter Treaty may require a different approach than a case involving NAFTA), (c)
the factual matrix at issue, (d) the quality of the reasoning in the prior decision, and (e) the
identity and reputation of the arbitrators in the prior case.62
4. Conclusion
1.31 Parties and arbitral tribunals ought to proceed through the hierarchy of rules that
govern the conduct of an investment arbitration whenever a procedural question arises.
That hierarchy begins with the mandatory rules governing the arbitration. In most cases,
those mandatory norms ensure that the parties have (a) the right to be heard and to
participate fully in the proceedings, and (b) the right to be treated equally. Assuming those
criteria are fulfilled, the parties are generally free to choose procedural rules that they see
fit. The rules that the parties choose will, within reason, govern the tribunal’s conduct.63
1.32 Where the parties do not agree to the applicable procedural rule, it is for the tribunal
to fill the gap with reference to a variety of factors, which must all be considered together.
Those factors include: (a) the context of the applicable rules, (p. 15) (b) soft law protocols
that reflect customary investment arbitration practice, and (c) prior investment arbitration
decisions.
1.33 One final but important note bears mentioning. The parties should be permitted to
make submissions to the tribunal with respect to important procedural decisions on which
the parties disagree. It is through this adversarial process that the merits of different
procedural options, including those that have been adopted in a series of prior decisions,
can be assessed by the tribunal.64 This does not mean that the tribunal ought to require two
rounds of written pleadings and a hearing to decide every procedural matter. For instance,
some procedural decisions may be taken with both sides exchanging letters over the course
of a week, or giving their views on a procedural conference call. While an arbitral tribunal
is unlikely to be able to satisfy all of the parties all of the time, its consideration of the
parties’ positions, and its application of the correct procedural law, will help it to chart a
procedural course that most accurately reflects the parties’ expectations and protects the
final arbitral award from annulment.
Footnotes:
1 Certain recent studies have, however, focused exclusively on the application of soft law or
precedent in investment arbitration. With respect to studies on soft law in investment
arbitration, see Andrea K. Bjorklund and August Reinisch, eds., International Investment
Law and Soft Law (Massachusetts, Edward Elgar Publishing, Inc., 2012); Lawrence W.
Newman and Michael J. Radine, eds., Soft Law in International Arbitration (New York,
JurisNet, 2014). With respect to studies on precedent in investment arbitration, see Jeffery
P. Commission, ‘Precedent in Investment Treaty Arbitration: A Citation Analysis of a
Developing Jurisprudence’, 24 Journal of International Arbitration, no. 2 (2007), p. 129;
303
Stephan W. Schill, ‘System-Building in Investment Treaty Arbitration and Lawmaking’, 12
German Law Journal (2011), p. 1083; W. Michael Reisman, ‘ “Case Specific Mandates”
versus “Systemic Implications”: How Should Investment Tribunals Decide?’, 29 Arbitration
International (2013), p. 131; Irene M. Ten Cate, ‘The Costs of Consistency: Precedent in
Investment Treaty Arbitration’, 51 Columbia Journal of Transnational Law (2013), p. 418.
2
ICSID also administers disputes under the ICSID Additional Facility, where the ICSID
Convention does not apply. For purposes of determining the applicable procedural law,
ICSID Additional Facility arbitrations ought to be treated like any other non-ICSID
institutional arbitration.
3
ICSID Convention, Art. 44.
4
ibid. Art. 52(3).
5
ibid. Art. 52(1)(d).
6
UNCITRAL Model Law, Art. 34(2)(a)(ii). See also Belgian Code of Civil Procedure, Art.
1721 (2013); English Arbitration Act Sec. 103(2)(c) (1996); Thailand Arbitration Act Sec.
40(3) (2002).
7
UNCITRAL Model Law, Art. 34(2)(a)(iv). See also Malaysia Arbitration Act 2005, Sec.
37(1)(a)(iv); English Arbitration Act 1996, Sec. 36(1)(a)(iv); Canada Commercial Arbitration
Act 1985, Art. 34(2)(a)(iv); Swedish Arbitration Act of 1999, Sec. 34(iv). The grounds for
non-enforcement of arbitral awards under the New York Convention parallel the grounds
for annulment under the UNCITRAL Model Law. See Convention on the Recognition and
Enforcement of Foreign Arbitral Awards, signed at New York on 10 June 1958, entered into
force on 7 June 1959, Arts. V(1)(b) and V(1)(d).
8
The grounds for annulment in the UNCITRAL Model Law mirror the grounds for non-
recognition of arbitral awards under the New York Convention, Art. V. This reinforces the
mandatory nature of the procedural rules referenced as failure to follow them may result in
an unenforceable award, regardless of whether it is set-aside at the seat.
9
There are, of course, other mandatory norms normally imposed by the lex arbitri, such as
whether a particular dispute is capable of being settled by arbitration in the first place, but
those matters go beyond the scope of the law applicable to the procedure of the arbitration,
and are thus not addressed here.
10
UNCITRAL Model Law, Art. 18. See also Swedish Arbitration Act 1999, Sec. 21;
Singapore Arbitration Act 1994 (Revised 2002), Art. 18; English Arbitration Act 1996, Sec.
33(1)(a). The UNCITRAL Arbitration Rules similarly require that ‘the parties are treated
with equality’ and that ‘each party is given a reasonable opportunity of presenting its case’.
UNCITRAL Arbitration Rules, Art. 17(1). See also Pope & Talbot Inc. v. the Government of
Canada, NAFTA, UNCITRAL Arbitration, Award of the Merits of Phase 2 (10 April 2001),
para. 193. (Noting that the ‘ “overriding principle” found in Art. 15 of the UNCITRAL
Arbitration Rules [Now Art. 17 of the revised Rules]’ is that ‘all Parties should be treated
with equality’.); Frontier Petroleum Services Ltd. v. The Czech Republic, UNCITRAL
Arbitration, Final Award (12 November 2010), para. 205. (‘Under Art. 15(1) of the
UNCITRAL Rules [which is now Art. 17(1) of the 2010 revised Rules] the Tribunal enjoys a
broad discretion to conduct the arbitration in such a manner as it considers appropriate,
provided that the Parties are treated with equality and that at any stage of the proceedings
each Party is given a full opportunity of presenting its case.’)
11
See also UNCITRAL Model Law, Arts. 24(2) and (3), which both relate to the parties’
ability to fully participate in the arbitral proceedings. (‘(2) The parties shall be given
sufficient advance notice of any hearing and of any meeting of the arbitral tribunal for the
purposes of inspection of goods, other property or documents. (3) All statements,
documents or other information supplied to the arbitral tribunal by one party shall be
304
communicated to the other party. Also any expert report or evidentiary document on which
the arbitral tribunal may rely in making its decision shall be communicated to the parties.’)
For examples of cases in which courts have annulled arbitration awards due to procedural
defects, see Turkish Supreme Court 13th Civil Circuit, Decision, No. 8777/4493, 25 April
1991 (in which the Supreme Court decided that an arbitration agreement providing the
right to appoint the arbitrator to only one party was null and void); Superior Court of
Justice, Canada, CLOUT Case No. 391, 22 September 1999 (annulling an award where the
tribunal deliberately concealed documents from the party, or failed to disclose evidence it
obtained to one or both parties).
12
The ICSID Convention, like any treaty, must be interpreted in accordance with the rules
of interpretation laid out in Art. 31 of the Vienna Convention on the Law of the Treaties. In
interpreting Art. 52(1)(d), the ad hoc committee in Fraport v. Philippines explained that ‘a
fundamental rule of procedure is intended to denote procedural rules which may properly
be said to constitute “general principles of law”, insofar as such rules concern international
arbitral procedure.’ Fraport AG Frankfurt Airport Services Worldwide v. Republic of the
Philippines, ICSID Case No. ARB/03/25, Decision on the Application for Annulment of
Fraport AG Frankfurt Airport Services Worldwide (23 December 2010), para. 187.
13
Wena Hotels v. Egypt, ICSID Case No. ARB/98/4, Decision on Annulment (5 February
2002), para. 58.
14
Christoph H. Schreuer with Loretta Malintoppi, August Reinisch, and Anthony Sinclair,
The ICSID Convention: A Commentary (2nd edn, Cambridge University Press, 2009), p. 980
.
15
ICJ Statute, Art. 38(1)(c); Inceysa Vallisoletana, S.L. v. Republic of El Salvador, ICSID
Case No. ARB/03/26, Award (2 August 2006), para. 227. (Finding that general principles of
law ‘have been understood as general rules on which there is international consensus to
consider them as universal standards and rules of conduct that must always be applied and
which, in the opinion of important commentators, are rules of law on which the legal
systems of the States are based’.) See Bin Cheng, General Principles of Law as Applied by
International Courts and Tribunals (Cambridge, Cambridge University Press, 1953).
16
Maritime International Nominees Establishment (MINE) v. Guinea, ICSID Case No. ARB/
84/4, Decision on Annulment (22 December 1989) 4 ICSID Reports, para. 5.06.
17
Fraport AG Frankfurt Airport Services Worldwide v. Republic of the Philippines, ICSID
Case No. ARB/03/25, Decision on the Application for Annulment of Fraport AG Frankfurt
Airport Services Worldwide (23 December 2010), para. 197.
18
ibid. para. 202. See also Wena Hotels v. Egypt, 56–7. (‘It is fundamental, as a matter of
procedure, that each party is given the right to be heard before an independent and
impartial tribunal. This includes the right to state its claim or its defence and to produce all
arguments and evidence in support of it. This fundamental right has to be ensured on an
equal level, in a way that allows each party to respond adequately to the arguments and
evidence presented by the other … ’.); Amco v. Indonesia, ICSID Case No. ARB/81/1,
Resubmitted Case, Decision on Annulment (3 December 1992) paras. 9.05–9.10. (Annulling
the Decision on Rectification because the tribunal rendered its decision on the request of
one of the parties without allowing the other party the opportunity to submit its
observations); Biwater Gauff (Tanzania) Ltd. v. United Republic of Tanzania, ICSID Case No.
ARB/05/22, Procedural Order No. 2 (24 May 2006), para. 13. (‘It is indeed one of the most
fundamental principles of international arbitration that the parties should be treated with
equality.’)
305
19
Klockner v. Cameroon, ICSID Case No. ARB/81/2, Decision on Annulment (3 December
1992), para. 91. (‘Impartiality of an arbitrator is a fundamental and essential requirement.
Any shortcoming in this regard, that is any sign of partiality, must be considered to
constitute, within the meaning of Art. 52(1)(d), a “serious departure from a fundamental
rule of procedure”.’)
20
ibid. para. 84. (‘[I]t is possible to hold that the requirement of deliberation among the
arbitrators is a “basic rule of procedure.” It is also possible to hold that such deliberation
must be real and not merely apparent.’)
21
UNCITRAL Model Law, Art. 19(1).
22
For instance, the number of arbitrators and the process for selecting arbitrators is often
outlined in the arbitration agreement itself. See 2012 U.S. Model BIT, Art. 27.
23
See Agreement on encouragement and reciprocal protection of investments between the
Kingdom of the Netherlands and the Argentine Republic, signed on 20 October 1992,
entered into force on 1 October 1994, Art. 10(5). (Allowing an investor to submit a dispute
to arbitration by ICSID or an ad hoc tribunal established under the UNCITRAL Arbitration
Rules); ibid. Art. 24(3). (Allowing an investor to submit its claims to arbitration under the
ICSID Convention, the ICSID Additional Facility, UNCITRAL Arbitration Rules, or ‘if the
claimant and respondent agree, to any other arbitration institution or any other arbitration
rules’.)
24
ICSID Convention, Regulation and Rules, as amended and effective 10 April 2006. The
Institution Rules govern the preliminary proceedings between the filing of a request and the
dispatch of the notice of registration. The procedures contained in the Institution Rules
cannot be modified by the parties. The Administrative and Financial Regulations, which
proscribe rules for such procedural issues as costs and means of communication, are also
mandatory to the extent that the Arbitration Rules do not allow for modification of specific
provisions. Schreuer, The ICSID Convention: A Commentary (2009), pp. 667, 685.
25
UNCITRAL Arbitration Rules, Rules 17(2) and 19(1).
26
Rule 20 of the ICSID Arbitration Rules directs the president to seek the parties’ views on
the following matters: ‘(a) the number of members of the Tribunal required to constitute a
quorum at its sittings, (b) the language or languages to be used in the proceeding, (c) the
number and sequence of the pleadings and the time limits within which they are to be filed,
(d) the number of copies desired by each party of instruments filed by the other, (e)
dispensing with the written or the oral procedure, (f) the manner in which the cost of the
proceeding is to be apportioned, and (g) the manner in which the record of the hearings
shall be kept.’
27
For instance, parties often agree that some or all of the IBA Rules on the Taking of
Evidence in International Arbitration apply to evidentiary matters.
28
See Appendix 1— Draft Procedural Order No. 1 for a sample Procedural Order No. 1 in
the investment arbitration context.
29
UNCITRAL Model Law, Art. 34(2)(a)(iv) (allowing for annulment where ‘the composition
of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement
of the parties, unless such agreement was in conflict with a provision of this Law from
which the parties cannot derogate, or, failing such agreement, was not in accordance with
this Law’. (emphasis added)).
30
See Chester Brown, A Common Law of International Adjudication (New York, Oxford
University Press, 2007), p. 41.
306
31
ICSID Convention, Art. 44. See Churchill Mining and Planet Mining Pty Limited v.
Indonesia, ICSID Case No. ARB/12/14 and 12/40, Procedural Order No. 8. (22 April 2014),
para. 12. (‘Art. 44 of the ICSID Convention endows the tribunal with the discretionary
power to decide any question of procedure not covered by the ICSID Convention, the ICSID
Arbitration Rules, or an agreement of the Parties.’)
32
ICSID Rules of Procedure for Arbitration Proceedings (Arbitration Rules), with
explanatory notes, ICSID/4/Rev.1, 1 January 1968, Introductory note D. See also Schreuer,
The ICSID Convention: A Commentary (2nd edn, 2009), p. 880. (‘An ICSID tribunal’s power
to close gaps in the rules of procedure is declaratory of the inherent power of any tribunal
to resolve procedural questions in the event of lacunae.’)
33
Abaclat v. Argentina, para. 521, quoting ICSID Arbitration Rules, Rule 19.
34
UNCITRAL Arbitration Rules, Rule 17(1).
35
ibid.
36
Brown, A Common Law, 2007, p. 63, para. 38. (Referencing United Parcel Services of
America Inc. v. Canada, NAFTA/UNCITRAL, Decision of the Tribunal on Petitions for
Intervention and Participation as Amici Curiae (17 October 2001).) (The provision in the
UNCITRAL Rules that confers the power on the tribunal to ‘conduct the arbitration in such
a manner as it considers appropriate’ is ‘essential to the very process of dispute settlement
by way of arbitration and might be though to be inherent even if not expressly stated’.)
37
Brown, A Common Law, 2007, p. 63. See also Donald Donovan, ‘Abaclat and others v.
Argentine Republic as a Collective Claims Proceeding,’ 27 ICSID Review (2012), p. 261. (In
discussing the Abaclat case, noting: ‘[o]n its own analysis, in devising rules to fill the gaps,
the Tribunal will need to determine whether and to what extent each specific procedure
genuinely fills a gap and, therefore, ensure that the procedure does not contravene any
provision of the Convention or Rules.’)
38
See Aguas Provinciales de Santa Fe, SA, Suez, Sociedad General de Barcelona, SA v.
Argentine Republic, ICSID Case No. ARB/03/17, Order on Amicus Curiae (17 March 2006),
para. 7. (‘Although the Tribunal, as the Petition asserts, does have certain inherent powers
with respect to arbitral procedure, it has no authority to exercise such power in opposition
to a clear directive in the Arbitration Rules, which both Claimant and Respondent have
agreed will govern the procedure in this case.’)
39
Abaclat and Others v. Argentine Republic, ICSID Case No. ARB/07/5, Decision on
Jurisdiction and Admissibility (4 August 2011), paras. 297, 517.
40
ibid. para. 517.
41
ibid.
42
ibid. para. 519. See also Abaclat and Others v. Argentine Republic, ICSID Case No. ARB/
07/5, Dissenting Opinion of Georges Abi-Saab (28 October 2011), para. 190. (Reaching the
opposite conclusion that the silence in the ICSID framework with respect to collective
proceedings could not be read as permitting collective actions. Rather, the
drafters were simply creating a framework for ad hoc international arbitration,

within the parameters of ad hoc international arbitration as they knew them at that
time, particularly its specific consensual basis for every case, as with all
international adjudication. They were not establishing an open-ended standing court
of general jurisdiction (juridiction de droit commun) covering all possible present
and future disputes.
307
Thus, the Dissent concludes that ‘a mere acceptance to arbitrate does not cover collective
mass claims actions … and that a special or secondary consent is needed for such collective
actions’.)Other tribunals considering the question of collective proceedings have not
directly relied on Art. 44. See Giovanni Alemanni and others v. the Argentine Republic,
ICSID Case No. ARB/07/8, Decision on Jurisdiction and Admissibility (17 November 2014),
para. 270. (We do not take a position on which approach is preferred in the context of
collective proceedings, but merely rely on the Abaclat decision for the proposition that
tribunal’s authority to devise procedural rules requires, in the first instance, an
identification of a gap in the rules selected by the parties to apply to the arbitration.)
43
ConocoPhillips Petrozuata B.V., ConocoPhillips Hamaca B.V., ConocoPhillips Gulf of Paria
B.V. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/07/30, Decision on
Respondent’s Request for Reconsideration (10 March 2014), para. 23.
44
ibid.
45
Abaclat, n 39, para. 523.
46
ibid. para. 525.
47
ibid. para. 119.
48
IBA Rules on the Taking of Evidence in International Arbitration (2010), Foreword at 2.
49
See Franz T. Schwarz and Christian W. Konrad, The Vienna Rules: A Commentary on
International Arbitration in Austria (Netherlands, Kluwer Law International, 2009), p. 415.
(‘Although it is difficult to assess how frequently the IBA Rules are actually adopted by
parties, it is fair to say that they have had a considerable influence on the practice of taking
evidence in international commercial arbitration.’) See also W. Miles and F.T. Schwarz,
‘Taking of Evidence in International Commercial Arbitration’ in International Comparative
Legal Guide to International Arbitration 2004 (London, Global Legal Group, 2003).
50
Churchill Mining PLC and Planet Mining Pty Ltd v. Republic of Indonesia, ICSID Case
No. ARB/12/14 and 12/40, Procedural Order No. 10 (22 July 2014), para. 10.
51
ibid.
52
Glamis Gold Ltd. v. the United States of America, NAFTA, UNCITRAL Arbitration, Award
(20 July 2005), para. 9.
53
See Caratube International Oil Company LLP & Mr. Devincci Salah Hourani v. Republic
of Kazakhstan, ICSID Case No. ARB/13/13, Decision on the Proposal for Disqualification of
Mr. Bruno Boesch (20 March 2014), para. 58. See also Mesa Power Group LLC v.
Government of Canada, PCA Case No. 2012–17, Procedural Order No. 1 (21 November
2012), para. 3.2.
54
See National Grid PLC v. The Republic of Argentina, LCIA Case No. UN 7949, Decision
on the Challenge to Mr. Judd Kessler (3 December 2007). (Referring to Argentina’s reliance
on the IBA Rules of Ethics for International Arbitrators to support its argument that
‘partiality arises where the arbitrator “is prejudiced in relation to the subject-matter of the
dispute” ’.)
55
See Mesa Power Group LLC v. Government of Canada, PCA Case No. 2012–17,
Procedural Order No. 3 (28 March 2013), para. 19. See also Detroit International Bridge
Company v. Government of Canada, UNCITRAL, PCA Case No. 2012–25, Canada’s
Submission on Place of Arbitration (15 January 2013), para. 9.
56
See Glamis Gold Ltd. v. the United States of America, NAFTA, UNCITRAL Arbitration,
Decision on Parties’ Requests for Production of Documents Withheld on Grounds of
Privilege (17 November 2005), para. 18. (‘In their submissions on document production
issues, both Parties cited the rules of the International Bar Association as a source of
guidance for the Tribunal on production of documents. The Tribunal observes that those
308
rules provide that documents requested should be “material” to the proceeding. The
Tribunal in its previous decisions has adopted the requirement of materiality.’)
57
Wintershall Aktiengesellschaft v. Argentine Republic, ICSID Case No. ARB/04/14, Award,
1 194 (8 December 2008). (‘[S]tare decisis has no application to decisions of ICSID
tribunals—each tribunal being constituted ad hoc to decide the dispute between the parties
to the particular dispute.’)
58
Saipem S.p.A. v. People’s Republic of Bangladesh, ICSID Case No. ARB/ 05/7, Decision
on Jurisdiction and Recommendation of Provisional Measures, 67 (21 March 2007). See also
Gabrielle Kaufmann-Kohler, ‘Arbitral Precedent: Dream, Necessity or Excuse?’, 23
Arbitration International (2007), pp. 357, 374. (‘It may be debatable whether arbitrators
have a legal obligation to follow precedents—probably not—but it seems well settled that
they have a moral obligation to follow precedents so as to foster a normative environment
that is predictable.’)
59
Permanent Court of Arbitration, Arbitration Rules, Art. 35(1)(a)(iv) (2012), available at
<http://www.pca-cpa.org/showpage.asp?pag-id=1188>. Note that Art. 35(1)(a)(iv) seeks to
identify the content of ‘international law’ for purposes of disputes involving only states.
60
Methanex Corp. v. United States of America, NAFTA, UNCITRAL Arbitration, Decision of
the Tribunal on Petitions from Third Persons to Intervene as ‘Amicus Curiae’ (3 August
2005), para. 51.
61
See Methanex Corp. v. United States of America, NAFTA, UNCITRAL Arbitration, Final
Award of the Tribunal on Jurisdiction and Merits (3 August 2005), Part IV, Ch. C, paras. 11–
12 (discussing the treatment by other NAFTA tribunals of the Free Trade Commission’s
interpretive note on NAFTA, Art. 1105). See also, ibid. para. 26. (Noting that, in attempting
to establish custom, ‘[i]n his oral submissions at the main hearing, Counsel for Methanex
cited only one case’.) As shown in an early empirical study of precedent in investment treaty
arbitration conducted by one of the present authors, it is clear that investment tribunals are
increasingly relying on prior awards. See Jeffery P. Commission, ‘Precedent in Investment
Treaty Arbitration: A Citation Analysis of a Developing Jurisprudence’, 24 Journal of
International Arbitration, no. 2 (2007), p. 129.
62
Brian D. King and Rahim Moloo, ‘International Arbitrators as Lawmakers’, 46 NYU
Journal of International Law and Politics, no. 3 (2014), pp. 875, 897–907. The last of these
factors—i.e., the reputation of the arbitrators—is only relevant in certain circumstances. For
instance, a decision might be more compelling if arbitrators concur on the way to address a
matter on which they have been known to disagree.
63
It is questionable if a tribunal would be required to adopt an agreement by the parties
that imposed too large a burden on the tribunal. For instance, it might be considered
unreasonable if the parties decided to impose on the tribunal too short a timeframe to
render a particular decision.
64
The legitimacy of prior investment arbitration decisions is similarly derived (at least in
part) from the need for three arbitrators—of which two arbitrators are often appointed by
opposing parties—to reach a decision on a particular matter after an adversarial exchange
by the parties on the merits of their respective positions. See Brian D. King and Rahim
Moloo, ‘International Arbitrators as Lawmakers’, 46 NYU Journal of International Law and
Politics, no. 3 (2014), pp. 875, 889–97.
309
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12/10/13 Print preview
Thirty Years of Lex Mercatoria: Towards

the Discriminating Application of
Transnational Rules
Emmanuel Gaillard (*) Author
Emmanuel Gaillard
I. Introduction Source
Emmanuel Gaillard,
Thirty years ago, Berthold Goldman published his celebrated article Thirty Years of Lex
on lex mercatoria in Archives de philosophie du droit. (1) In the same Mercatoria: Towards
year, Clive Schmitthoff devoted an equally important study to the the Discriminating
new law merchant in a collection of articles on the sources of Application of
international commercial law. (2) Since then, the subject of lex Transnational Rules in
Albert Jan van den Berg
mercatoria has given rise to an impressive body of legal writing. (3)
(ed), Planning Efficient
It is striking to note that this body of writing comprises studies Arbitration Proceedings:
published in many different countries worldwide. Accordingly, to The Law Applicable in
follow the development of lex mercatoria an understanding of a International Arbitration,
number of languages is required. (4) Interestingly, much of the ICCA Congress Series,
writing on this subject is today published in common law 1994 Vienna Volume 7
jurisdictions, traditionally the most reluctant towards lex mercatoria. (Kluwer Law
(5) International 1996) pp.
582 - 602
A second and more remarkable feature of the academic debate
surrounding lex mercatoria is the fact that it remains highly
controversial. The subject is by no means page "570" a new
one, and, as discussed above, a very significant amount of learned
attention has already been devoted to it. Nonetheless, lex
mercatoria continues to be hotly debated, with a number of
extremists on each side.
On one side of the divide stand authors attacking lex mercatoria on

ideological, theoretical as well as practical grounds. On the
ideological front, lex mercatoria has been presented as a “less than
candid pseudo-legal caprice”, (6) or, in more moderate terms,
“essentially … a doctrine of laissez-faire”. (7) On the theoretical
level, some reproach lex mercatoria for not having the characteristics
of a complete legal system, (8) which naturally leads to the
conclusion that lex mercatoria does not exist. (9) Finally, on the
practical level, the principles of lex mercatoria have been portrayed
both as few and far between, and as inconsistent with each other.
For many, lex mercatoria is only “vague law”, (10) bringing together
principles allegedly as contradictory as the binding
320 force of
www.kluwerarbitration.com/CommonUI/print.aspx?ids=ipn27755 1/24
contracts and the theory of unforeseeability. (11) The coup de grâce

is delivered by those who, very pragmatically, point out that the
tremendous amount of academic attention devoted to lex mercatoria
has only given rise to a very limited number of principles. (12)
In contrast, some authors take an extremely broad view of lex

mercatoria, finding examples of lex mercatoria principles in the most
diverse sets of circumstances. (13) Certain arbitral awards influenced
by lex mercatoria further this tendency by developing highly
sophisticated theories to justify the application of universally
accepted rules, such as the binding force of contracts or the duty to
perform contractual obligations in good faith. (14) This only fuels the
idea that the considerable body of academic work on the topic has
achieved very little of practical value.
The controversy is made worse, to a certain extent, by the fact that

the terminology “lex mercatoria” is ambiguous. In contrast with the
notions of transnational rules or general principles of international
commercial law, the notion of lex mercatoria page
"571" emphasizes the content of the rules rather than the way in
which such rules come about. By suggesting that it is necessary to
have rules specifically tailored to the merchant community, the use
of the expression lex mercatoria seems to imply that domestic legal
systems are inadequate for the purposes of regulating international
commercial relationships. However, even if not always unjustified,
the idea that the specificity of international commercial relationships
often requires specific rules is liable to cause some difficulty when
confused with the issue of whether a rule should necessarily be of
national origin. Indeed, it is not necessarily the case that one must
resort to rules of international origin in order to meet the
requirements of international commerce. Each legal system can
address these requirements by having international legal
relationships governed by substantive rules (règles matérielles)
which differ from those governing domestic legal relationships. (15)
Numerous examples of this approach can be found in the case law
of various countries. (16)
The terms “transnational rules” and “general principles of

international commercial law” are preferable to “lex mercatoria”
because they imply that the solution to the problems of the
business community may also be found in national legal systems,
and because they make clear that the specificity of such rules
stems more from their source than from their content. Thus,
whereas the concept of lex mercatoria seems to suggest the
specificity of transnational norms, the terms “transnational rules” or
“general principles” imply to the contrary that such rules are rooted
in national legal systems. The concept is no longer one of
opposition between national legal systems and a hypothetical
transnational legal system, but rather one of complementarity. In
other words, the suggestion of the inadequacy of domestic laws
gives way to the idea of using a body of different laws, rather than a
single law, as the means of resolving a particular dispute.
These observations are not intended to suggest that the

impassioned reactions surrounding lex mercatoria and transnational
rules can be reduced to simple questions of terminology. In fact,
321
manifested in one's attitude towards transnational rules in

international commercial arbitration is an entire philosophy of
international arbitration. Although sometimes presented as a
“misconception”, (17) it is beyond doubt that it is the truly
international character of arbitration – with arbitrators, parties and
counsel of different nationalities, and hearings held in many different
locations – that prompts arbitrators to resort to rules which are not
strictly those of a single legal system. It is precisely because
arbitrators, as opposed to judges, have no forum as such, that
arbitral tribunals will more readily accept to apply rules of
international origin.
It is no coincidence that those who consider the seat of the arbitral

tribunal to page "572" amount to the forum of a national court
(18) are also those who have the most difficulty accepting that
arbitrators can apply transnational rules. Conversely, those who
believe that the source of validity of an international arbitral award is
found in all the legal systems likely to enforce such award (19) are
more willing to accept the idea that arbitrators can apply
transnational rules, even if this only means using transnational
choice of law rules to select the applicable national law. (20)
The debate surrounding the application of transnational rules by

international commercial arbitrators is therefore much more than a
mere academic exercise. Rather, it reveals a clear dividing line
between two different philosophies of international commercial
arbitration. It is therefore not so surprising that, after thirty years, the
subject continues to elicit such heated controversy.
Today, however, it would seem that one ought to take a more

balanced view of transnational rules, both when assessing the
situations in which it is legitimate to apply them (II) and when
determining their content (III).
II. Cases where Transnational Rules May be Applied in

As with any legal mechanism, transnational rules can only be

properly evaluated by examining how they are actually applied. An
analysis of arbitral practice reveals that in certain situations the
application of transnational rules is extremely questionable (1), while
in other cases it is perfectly legitimate (2).
1. Cases Where the Application of Transnational Rules Is

Questionable
The transnational rules method has, on occasion, been used for two
diametrically opposed, and equally questionable, ends: (a) in order
to place the contract above any law and (b) in order to defeat the
parties' choice of a specific national law. In both cases, it will be
shown that it is only these misguided applications of the
transnational rules method that warrant criticism, and not the
method itself.
a. Transnational rules as a means of placing the contract above

322
any law
In the 1950s, there was much debate as to whether an international

contract could be completely self-standing, and whether the parties
could therefore elect to prevent the page "573" application of any
national law to that contract. (21) Today, however, the rather radical
idea of a contract with no governing law (contrat sans loi) has been
rejected in most legal systems. (22)
Clearly, the transnational rules method can be used as a simple

substitute for the theory which allows the contract with no governing
law, by making the principle pacta sunt servanda the cornerstone of
lex mercatoria, prevailing over all other principles whenever such
principles are in conflict. Indeed, certain arbitral awards emphasize
the primacy of the binding force of contracts to such an extent that
they give some credence to the fears expressed by certain authors
that lex mercatoria is, at best, a manifestation of the doctrine of
laissez-faire. (23)
Nevertheless, the transnational rules method does not necessarily

imply that the binding force of contracts should be viewed as the
ultimate rule. The principle of the binding force of contracts is
without question found in most legal systems, and it is clear that
such a principle must also be taken into account by arbitrators
called upon to decide a case by reference to transnational rules. It
does not follow, however, that such principle is the only rule of
transnational contract law, and that its application is subject neither
to preconditions nor to limitations. For a contract to be binding on
the parties, it must have been lawfully entered into, which means, in
particular, that the parties must have entered into the contract on
the basis of informed consent and not as a result of fraud or
mistake. (24) In addition, if the failure to perform a contract is to give
rise to an action for specific performance or damages, the failure to
perform must not be the result of force majeure or some other event
legitimately excusing performance. (25) Furthermore, the calculation
of the extent of recoverable loss is also subject to rules that have a
page "574" bearing on the outcome of a dispute. (26) In all these
areas, arbitral tribunals applying general principles have reached
decisions from which it is clear that, no more than in any given
national law, the principle of the binding force of contracts is not the
only rule governing the resolution of contractual disputes. (27)
In other words, the transnational rules method is perfectly able to

address the policy concerns of defending the interests of parties
needing protection, and of encouraging fair business practice.
The body of rules developed in arbitral practice on the subject of

corruption is a good example of how transnational rules do not
necessarily operate in favorem validitatis. There is now little doubt
that, in spite of resistance in some quarters, (28) a transnational rule
has been established according to which an agreement reached by
means of corruption of one of the signatories, be it a government
agency (in a public law context) or an employee of a party (in a
private law context), is void, or, at the very least, may not give rise to
an award based on such contract. (29) 323
This example also shows that the criticism that transnational rules
are too few in number and often contradictory rests on an inaccurate
assumption. The principle of the binding force of contracts, and the
various principles limiting its scope, are not at all in contradiction.
On the contrary, they follow the logic of “principle – conditions –
exceptions” that recurs in all legal systems. In the same way, the
view that lex mercatoria contains contradictory principles such as
pacta sunt servanda and rebus sic stantibus (30) is ill-founded.
Should the theory of unforeseeability in fact be considered as a
general principle of international commercial law, (31) its acceptance
as such would be no more contradictory with the theory of the
binding force of contracts than it is in each of the various legal
systems in which the same two theories are found. (32)
Properly understood, the substantive rules method cannot be

reduced to a means of making the will of the parties the ultimate
rule, thus resurrecting the theory of the contract with no governing
law. On the other hand, this method should not be used page
"575" to compromise the effectiveness of the parties' choice of a
particular national law to govern their agreement.
b. Transnational rules as a means of displacing the law chosen

by the parties
In an international context, the freedom of the parties to choose the

law governing their relationship is widely recognized. However,
various theories have been put forward seeking to restrict the effects
of the parties' choice, even where, as is very often the case in
practice, the parties have expressly chosen to have their potential
disputes governed by a particular national law. According to one
such theory, where the chosen national law is silent on a given
issue, arbitrators should fill the gaps by using lex mercatoria,
general principles of law, or, if a State contract is involved, the
principles of public international law. (33)
An example of this theory put into practice can be seen in an award

rendered in a recent ICSID arbitration. In its award on the merits,
dated 20 May 1992, the tribunal in the SPP v. The Arab Republic of
Egypt arbitration (34) held that, even if, as The Arab Republic of
Egypt argued, Egyptian law were applicable because it was the law
chosen by the parties, this did not exclude the application of
principles of international law in order to fill any lacunas in Egyptian
law. Applying this line of reasoning, the tribunal concluded that
Egyptian law did not contain any rule governing the determination of
the starting point in the calculation of interest, and that it was
therefore necessary to resolve the issue by reference to international
law. (35) If the tribunal's conclusion is accurate, one can only wonder
what Egyptian judges do each time they are required to calculate
the amount of interest due in a dispute governed solely by domestic
law. This solution is so blatantly wrong that it suffices to discredit
the method used.
However, it is the idea that national laws contain lacunas, rather

than the concept of transnational rules, that is unsound. When a
324
court is faced with a difficulty such as that raised in the SPP case,
it will resolve it, if need be by drawing from general principles of the
applicable national law. (36) The concept of lacunas is unnecessarily
harmful in that it leads to the conclusion that certain legal systems
contain more lacunas than others, and hence that there exist some
legal systems insufficiently “developed” to handle all the questions
raised by major international ventures. The sort of discrimination that
is likely to result from such a notion is well-known; the long-term
discredit suffered by international arbitration as a result of the award
rendered by Lord page "576" Asquith in 1951 (37) has received
enough commentary to make further discussion of the issue
unnecessary here. (38)
These suspect applications of transnational rules should not lead to

a wholesale condemnation of the transnational rules method. It is
not the transnational rules method itself which merits criticism, but
rather the idea that national laws contain lacunas and thus permit
the application of transnational rules even when the parties have
expressly submitted their disputes to a given national law. This
confusion is unfortunate, but it is not such as to call into question
the intrinsic value of transnational rules. Thus, it is essential to
ensure that a distinction is made between situations where it is
inappropriate to employ transnational rules and the situations in
which their application is legitimate.
2. Cases Where It Is Legitimate to Apply Transnational Rules
There are three sorts of transnational rules legitimately applied by

international commercial arbitrators: transnational choice of law
rules (a), substantive transnational rules (b) and transnational public
policy rules (c).
a. Transnational choice of law rules
Traditionally, when arbitrators wish to use choice of law rules in

order to determine the law applicable to the dispute before them,
those choice of law rules will often be of transnational origin.
Of course, transnational choice of law rules are not the only means
of determining the applicable law, but the respective merits of the
different methods of determining the applicable law are not
discussed here. (39) However, it should be noted that the application
of the choice of law rules of the seat of the arbitration, as advocated
by those who see the seat as amounting to a domestic forum, (40)
is a method which is poorly adapted to the international nature of
commercial arbitration. (41) To apply the choice of law rules of the
seat will often lead to results which are unpredictable and therefore
fail to meet the policy imperatives of reliability often advanced to
justify the conflicts method.
This can be seen in the example of a sale of goods contract

between a Nigerian and a French company, which provided for
arbitration in Cairo. The application of the conflicts rules of the law of
the seat would lead, absent agreement between the parties,
page "577" to the dispute being governed by the law of the place
325
of execution of the contract, under Art. 19 of the Egyptian Civil Code

of 1948. However, the application of general principles of private
international law would more probably lead to the application of the
law of habitual residence of the seller, given the influence on
transnational rules of the 1955 Hague Convention on the
International Sale of Goods. (42) However, the recent adoption in
Egypt of a choice of law rule specific to international arbitration now
enables the problem to be avoided.
The application of choice of law rules specific to international

arbitration can only escape the same criticism if, as with the Swiss
law of 1987 or the Egyptian law of 1994, the rule applied is
sufficiently flexible to allow the arbitrators to satisfy the policy
imperative of predictability considered to underpin the choice of law
process. (43)
As to the “direct” method which, in the absence of an agreement by

the parties, allows arbitrators the freedom to choose the legal rules
applicable to the substance of the dispute, in the same way as the
parties could have done, it is clear that the exercise of this freedom
almost always only serves to justify the application of transnational
choice of law rules. Arbitrators do not, in fact, arbitrarily use the
freedom made available to them by an increasing number of national
laws on international arbitration. (44) In seeking to determine the
most appropriate applicable law (or, if the seat is in jurisdictions
such as Switzerland or Egypt, in seeking to determine the law that
has the “closest connections” with the case), the arbitrators assess
the respective value of each of the different factors (e.g., the place of
signature of the contract, the place of performance, or the habitual
residence of the parties) which are likely to lead to the application of
one of the connected laws. In so doing, arbitrators will of course
consider the precedent constituted by other arbitral awards rendered
in analogous situations, as well as the solutions adopted in the
various relevant systems of private international law. The comfort
that the arbitrators find in such precedents, as opposed to the
daunting freedom to reinvent private international law for each new
dispute (or even to determine the closest connections on a case by
case basis), usually leads to arbitrators applying, implicitly or
expressly, generally accepted principles of private international law.
(45)
Arbitral practice offers many examples of the lex mercatoria of

private international law, although of course one hesitates to call it
that, wrongly accustomed as we are to viewing lex mercatoria and
private international law as concepts that are diametrically opposed.
(46)
page "578"
b. Substantive transnational rules
International commercial arbitrators legitimately apply substantive

rules of transnational origin in two situations: (i) where the arbitrators
are to rule upon the existence and the validity of the arbitration
agreement; and (ii) where the parties intended to submit the merits
of their dispute to such rules or did not specify the applicable law.
326
i. Substantive transnational rules relating to the existence and

the validity of the arbitration agreement
In the context of international arbitration, one of the situations where

the use of the choice of law method, irrespective of the source of the
choice of law rules, is least justified, is where the arbitrators are
asked to rule on the existence and the validity of the arbitration
agreement from which their own authority is derived.
The principal choice of law rules in national legal systems are not
well suited to apply to arbitration agreements. This is true both for
widely accepted rules, such as those that designate the law of the
place of performance of the contract or the law of habitual residence
of the party performing the obligation which is characteristic of the
contract, and for more archaic rules such as those that designate
the law of the place of signature of the contract.
Applying the law of the place of signature of the arbitration

agreement would leave the question of the validity of the arbitration
agreement to chance or to the cunning of the parties, which is
hardly consistent with the purpose of the choice of law approach.
Basing the choice of applicable law on the habitual residence of the
party performing the obligation which is characteristic of the contract
is meaningless in the context of an agreement to arbitrate, and the
law of the place of performance is scarcely of more relevance. Of
course, the question could be resolved by reference to the law of the
seat of the arbitration, but the seat is often chosen for reasons of
geographical or other convenience which have no bearing on the
issue of whether the arbitration agreement is valid or not. Further,
the application of the law of the seat is inappropriate as it would
again leave the validity of the arbitration agreement to chance or to
the cunning of the parties.
It would also be inappropriate to apply to the arbitration agreement

either the law chosen by the parties to govern the merits of the case
or the law likely to result from the application of choice of law rules
designed to determine the law applicable to the underlying
agreement. To apply either of such laws would not only fail to
respect the principle of the severability of the arbitration agreement,
now accepted in most jurisdictions, but it would also lead to results
which might be completely at odds with the parties' legitimate
expectations. Frequently, the parties will have negotiated a
compromise whereby their substantive agreement is governed by the
national law of one of the parties (e.g., the law of the country in
which the agreement is performed), but where the dispute resolution
mechanism is neutral (e.g., institutional international arbitration or
arbitration in a third State). To have the validity of the arbitration
agreement depend upon the particularities of the law chosen by the
parties to govern the substance of the dispute would undoubtedly
upset the balance sought by the parties in such a situation.
This point is well illustrated by the facts in the Dalico case, where
ICC arbitrators, page "579" as well as the French appeal courts,
applied substantive transnational rules to decide whether an
arbitration agreement was valid. The dispute was between a Danish
party and a Libyan party and concerned a works contract performed
in Libya. The parties had provided that Libyan law would govern the
327
contract, but they had also referred to a document stipulating that

any disputes would be resolved by ICC arbitration in Paris. The
existence and validity of the arbitration agreement was then
contested before the arbitrators, as well as before the French courts
in an action to set aside. Rather than have the validity of the
agreement dependent upon the particularities of Danish or Libyan
law, the arbitrators and the French courts preferred instead to base
their decisions solely on generally accepted principles of
international commerce. (47)
This in no way signifies that the arbitration agreement will be

systematically held to be valid. The agreement will be held to be void
if it is found that one of the parties did not consent to arbitration, or
if, for example, consent was obtained by duress or through the
corruption of the signatory. (48) On the other hand, atypical national
laws (e.g., those requiring the reiteration of the arbitration agreement
once litigation has begun) (49) will, even if they are linked with the
case, not lead arbitrators applying substantive transnational rules to
hold the arbitration agreement to be void.
Here again, the solution reached is consistent with the international

character of arbitration and should be unreservedly approved. (50)
Such a solution will not prevent courts from refusing to enforce an
award based on generally accepted principles, if they consider that
the approach taken in their own jurisdiction reflects fundamental
domestic public policy. However, this solution does prevent the
uncertainties of the conflicts method from giving rise to the
application of substantive rules which are not adapted to an
international context.
ii. Substantive transnational rules relating to the merits of the

dispute When the parties have chosen to have their dispute
governed by transnational rules (by referring, in particular, to
general principles of international commercial law,
international arbitral practice, principles common to certain
legal systems, or lex mercatoria), the arbitrators are bound to
give effect to that choice, whether or not they consider such
choice appropriate. Most recent statutes regarding international
arbitration recognize the parties' right to choose transnational
rules, by providing that arbitrators are required to apply “the
rules of law” rather than “the law” chosen by the parties. (51)
A more controversial question is whether the arbitrators, in the

absence of an agreement between the parties on the law applicable
to the merits of the dispute, can page "580" choose to apply
transnational rules rather than a national law selected by means of
traditional choice of law rules. Certain legal systems do not
encourage this solution, and neither does the UNCITRAL Model
Law, known for its relative conservatism. Art. 28(2) of the Model Law
provides that, absent a choice by the parties, “the arbitral tribunal
shall apply the law determined by the conflict of laws rules which it
considers applicable”. However, Art. 28(2) does not refer to the
“rules of law” in the same way as Art. 28(1) as regards the choice of
law made by the parties. (52) It is true that arbitrators are in practice
given a certain amount of latitude by the absence of a provision in
328
the Model Law permitting the review of the arbitrators' decision as to

applicable law, during an action to set aside in the country of the
seat. (53) In contrast, other more recent laws permit arbitrators to
apply transnational rules if they deem it appropriate and absent
agreement by the parties. (54)
This notion was embodied in a resolution adopted by the

International Law Association in Cairo on 28 April 1992, to the effect
that “the fact that an international arbitrator has based an award on
transnational rules (general principles of law, principles common to
several jurisdictions, international law, usages of trade, etc.) rather
than on one law of a particular State should not in itself affect the
validity or enforceability of the award: (1) where the parties have
agreed that the arbitrator may apply transnational rules or; (2) where
the parties have remained silent concerning the applicable law”. (55)
Here again, the application of substantive transnational rules is

entirely legitimate, although it is obviously not the only possible
course of action. The main criticism made regarding the application
of these rules in the absence of agreement between the parties is
the uncertainty of their content, which contrasts with the perceived
certainty of the solutions provided by national law. Nevertheless, in
practice, when the parties have not chosen the applicable law, it will
often be less in accordance with the policy imperatives of
predictability and consistency to require the arbitrators to choose
between available national laws, than to apply general principles
drawn from international arbitral practice and comparative law. (56)
This is illustrated in particular when two or more legal systems are
equally closely linked to the dispute, as in the Norsolor case,
decided in 1979 by an arbitral tribunal (57) sitting in Vienna. (58)
c. Transnational public policy
State courts, in actions to set aside or enforce an award, will ensure

that the award does not violate the conception of international public
policy of the forum. Undoubtedly, page "581" the conception of
international public policy of the forum will not be the same as that
of domestic public policy, but it is nonetheless a body of rules of
national origin. The 1958 New York Convention recognizes this
explicitly when it addresses the review of the conformity with public
policy of the country in which recognition and enforcement are
sought. (59)
However, the issue is different for arbitrators. As they are not

restricted by any one legal system, arbitrators are free to retain a
truly transnational conception of international public policy. During
the VIIIth ICCA Congress, held in New York in 1986, Pierre Lalive
elaborated on this theme in an extremely convincing manner. (60) It
is not therefore necessary to dwell on the issue here. In any case,
arbitrators only have to take into consideration the requirements of
conformity with the international public policy of the seat of the
arbitration to the extent necessary to avoid having their award set
aside, and the same is true with respect to the various States in
which the award is likely to be enforced. The international
effectiveness of an arbitral award, alluded to in Art. 26 of the ICC
329
Rules of Arbitration, is something that arbitrators should legitimately

take into account. It is possible however, that this purely utilitarian
concern will conflict with the arbitrators' own conception of the
essential requirements of international morality. This may be the
case, in particular, where the country of the seat of the arbitration
has a conception of international public policy which is isolated on a
global level, but well established locally: the boycott of a State on
racial or religious grounds is an example.
In the rare cases where it appears that the conflict between the
conception of international public policy of the seat and that of truly
international public policy cannot be resolved, the latter concept
should nonetheless prevail before the arbitrators, as it alone is in
keeping with the international nature of arbitration. (61) One arbitral
award has already made tentative steps in this direction. (62) This
solution is also supported in the case law of countries like France
which allow for the enforcement of an award that has been set aside
in the country of the seat of the arbitration, provided that the award
satisfies the relevant conditions imposed in the country of
enforcement. (63)
In the cases described above, we are in no doubt that the

application of transnational page "582" rules is legitimate. We
will now discuss how the parties and the arbitrators establish the
content of the rules.
III. The Content of Transnational Rules
The transnational rules method is often criticized because of the

perceived difficulty of determining the content of the rules with any
precision. The credibility of the method is therefore as dependent
upon the determination of the content of the rules as it is upon their
legitimacy.
The content of transnational rules is of course a subject that can

only be fully analyzed through extensive comparative law studies.
(64) Thus, the following discussion will be confined to two essential
aspects of the process by which transnational rules are formed: (1)
transnational rules are a method, not a list; (2) the support for the
rules in comparative law need not be unanimous.
1. Transnational Rules Are a Method, Not a List
Lord Mustill's influential article on lex mercatoria, written for the

twenty-fifth anniversary of the subject, (65) gave rise to a certain
amount of misunderstanding. By setting forth a list of twenty
transnational rules encountered in arbitral practice, Lord Mustill
hardly intended to defend lex mercatoria. Rather, his point was to
emphasize the relative poverty of the method, with a mere twenty
principles, particularly when compared with the wealth of domestic
laws. However, supporters of lex mercatoria, whether genuinely or
not, expressed satisfaction with the large number of principles
listed. In addition, the fact that some of the principles so listed are of
an extremely specific nature (e.g., those on interest and damages)
provided further support for the view that the rules are not so general
330
as to have no practical utility. (66)
However, the presentation of transnational rules as a list of

principles is misguided: transnational rules are not a list, but rather
a method.
Whenever arbitrators or counsel must apply transnational rules,

such as cases where the parties so agree, (67) the first step is to
ascertain whether the parties themselves have given any indication
as to how the applicable rules should be determined. This will be the
case, for example, when the parties have selected as the applicable
law principles common to two or more legal systems. Thus, the
arbitrators sitting in the Eurotunnel case were required to apply “the
principles common to English and French law” and, failing that, “the
principles of international commercial law as they have been applied
page "583" by national and international tribunals”. Similarly,
arbitrators sitting in ICC Case no. 5163 had to apply “the principles
common to the laws of the Arab Republic of Egypt and the United
States of America”. (68) Similarly, the parties may use geographical
criteria to restrict the applicable general principles. Thus, for
example, the arbitrators sitting in ICC Case no. 6378 were required
to apply “general principles of law applicable in Western Europe”.
(69) In other cases, the arbitrators were asked to apply general
principles of law applicable in “Northern Europe”. (70) Other

examples involve arbitrators required to refer first to a particular
national law, and failing that to general principles of international
commercial law. (71)
When seeking to establish the parties' intentions, arbitrators should

take a flexible approach, striving to give the terms of the contract the
meaning that the parties understood them to have. Thus, for
instance, while the phrase “trade usages”, as used in Art. 13(5) of
the ICC Rules and Art. 1496 of the French NCCP, does not refer to
transnational rules but rather to trade practices generally observed in
particular areas of international commerce, (72) it is always possible
that parties providing for the application of “trade usages” intended
general principles of international commercial law to apply. Such an
interpretation should be adopted, for example, where the only
alternative conclusion is that the parties intended to enter into a
contract with no governing law, which would oblige the arbitrators
themselves to determine the law applicable to the contract. (73) In
other cases, the term “usages” has the same meaning as in Art.
13(5) of the ICC Rules. (74)
Failing a clear determination by the parties of the procedure to be

adopted, the second step of the process involves counsel and
arbitrators carrying out an analysis of comparative law in order to
establish the relevant rule or rules. Although precedents from arbitral
case law are unquestionably of importance, they are not the only
source. page "584" While at the same time respecting due
process, (75) it is incumbent upon counsel and arbitrators to show
that national laws converge on particular points at issue, thereby
establishing a transnational rule that is capable of being applied. If
the analysis of comparative law has not already been carried out, it
must be undertaken by counsel – a task which is no more arduous
331
than, say, researching the content of various national laws

connected to a dispute, in order to establish what is at stake when
the traditional choice of law method is used in the absence of any
agreement on the applicable law.
Accordingly, the transnational rules method cannot be criticized for

being vague or incomplete. However detailed the question at issue,
the transnational rules method will produce a solution, in the same
way as national law. The example of limitation periods, often cited
as highlighting the inadequacies of the transnational rules method,
is very telling in this respect. Suppose that an item, sold under an
international sale of goods contract with no applicable law provision,
has a latent defect, and that one of the parties alleges that the claim
based on the defect is time barred by limitation rules. The arbitrators
may, justifiably, not want to have the resolution of this dispute
dependent upon the national law of one of the parties, particularly if
the case has equally strong connections with more than one
national law. In such an instance, the application of the general
principles method is an adequate alternative, and can be arrived at
by reference to international rules, (76) such as the Vienna
Convention of 1980 on International Sales of Goods or the UNIDROIT
Principles, (77) as well as by reference to a comparison of the
various legal systems connected to the case. In determining the
content of transnational rules, parties and arbitrators are not,
however, wholly reliant on access to a huge volume of comparative
law studies. There are various other sources enabling arbitrators to
establish the existence of these rules, and then to evaluate their
support in comparative law.
The most authoritative source is undoubtedly the body of

international Conventions on a particular subject matter. The fact
that a certain number of States have adopted a rule by signing, or
indeed ratifying, a Convention in which that rule is contained, is an
obvious indicator of the international recognition of such rule. The
greater the number of States that are party to the Convention, and
the more diverse their origin, the more authoritative the rule. It is not
surprising that as regards the international sale of goods, many
awards now make reference to the 1980 Vienna Convention (78) or,
as regards applicable law, to the 1955 Hague Convention, whose
rules were followed and expanded in the 1980 Rome Convention.
(79) Even when a Convention is not yet in page "585" force, it
possesses a certain degree of authority in that it represents the
opinion of the delegates from the various States that negotiated the
Convention. Accordingly, international commercial arbitrators
frequently refer to international Conventions yet to enter into effect
as evidence of the existence of a transnational rule. (80)
Monographs on comparative law are also a useful source, especially

if they specifically address the determination of transnational rules.
(81) The Arbitration Committee of the International Law Association
has devoted a series of studies to the following transnational rules:
change of economic circumstances and pacta sunt servanda,
estoppel, the duty to cooperate in long term-contracts, the exceptio
non adimpleti contratus, force majeure, the determination of
recoverable damages, and interest. (82)
332
Particular mention must be made of the remarkable achievement of

the UNIDROIT working group, which in May 1994, published a
collection of Principles of International Commercial Contracts. (83)
These principles are specifically intended to be applied “when the
parties have agreed that their contract be governed by ‘general
principles of law’, the lex mercatoria or the like”. (84) The collection
comprises 108 principles presented in the style of a codification or
“restatement”, and accompanied by commentary explaining the
meaning of each principle. Some of these principles will, no doubt,
be challenged. Nevertheless, the publication of the results of this
extensive study of applied comparative law is a most valuable
contribution to the determination of transnational rules. (85) The
UNIDROIT Principles also evidence the fact that the support for
transnational rules provided by comparative law need not be
unanimous.
2. The Support for Transnational Rules in Comparative Law

Need Not Be Unanimous
As regards the extent to which it is necessary to have a basis in

comparative law for the formation of a transnational rule, we will
show in turn (a) that the unanimity of legal systems is not required
and (b) that general regional principles do exist.
a. The unanimity of legal systems is not required for the

formation of a transnational rule
It has at times been suggested that in order to establish the

existence of a transnational rule, it is necessary to prove that the
rule can be found in every legal system, or at least page
"586" in every leading legal system. Thus, for example, in his
lecture to The Hague Academy of International Law on “L'autonomie
de l'arbitre international dans l'appréciation de sa propre
compétence”, Pierre Mayer questions whether the severability of the
arbitration agreement is a general principle of the law of international
arbitration. Mr. Mayer argues that:
even if the position of English law is relatively isolated,

the fact that it is one of the most developed legal
systems, together with the fact that England is a
prominent place for international arbitration (at least in
certain fields), prevents the existence of the
consensus necessary for the establishment of a
general principle of law. (86)
If this point of view were to prevail, the fears held by many as

regards transnational rules would be justified. Without exploring into
detail the dangers inherent in this theory, which are similar to those
inherent in the “lacunas” theory, (87) a requirement for unanimity, or
at least the existence of a veto exercisable by legal systems
considered to be among the “most developed”, significantly reduces
the usefulness of the transnational rules method, as well as calling
into question its neutrality. What use is the general principles
method if applied only to determine rules already present in every
legal system? Moreover, if transnational rules were to be reduced to
333
their smallest common denominator (which would of course include

the principles of the binding force of contracts and the duty to
perform contractual obligations in good faith), they would in effect
afford the parties complete freedom of action, because the
restrictions customarily applicable to such rules are unlikely to be
present in every legal system, and would therefore themselves not
be considered to be transnational rules. In such a situation, the
criticisms that the method amounts to a doctrine of laissez-faire (88)
would be fully vindicated.
However, this is a caricature of the general principles method which

must be rejected. The whole aim of transnational rules is not to
diminish the role of national laws, but rather to avoid having solutions
that have not received sufficient support in comparative law prevail
over solutions more generally accepted in the international
community. This is perfectly in keeping with the intentions of parties
who provide for the application of general principles to their disputes,
rather than national laws upon which they are unable to agree. In
cases where the dispute has connections with a wide variety of
jurisdictions, the method responds fairly well to the concerns of
parties who have not been able to agree on an applicable law
clause, or who did not give any thought to the question. In all of
these situations, the application of one particular law may lead to
unexpected results, whereas applying the solution which reflects the
most generally accepted point of view will, contrary to received
thinking, meet the concerns of consistency and predictability.
page "587"
A salient example of the transnational rules method applied in

practice is that of the principle of the autonomy and, in particular,
the severability of the arbitration clause. It is clear that this principle
is very widely recognized, as is evidenced, for example, in the rules
of the principal arbitral institutions, in comparative law, and in
leading international legislation. (89) After the adoption of the
UNCITRAL Model Law in many common law jurisdictions, English
law had become isolated because of its reluctance to accept the
autonomy of the arbitration clause, (90) although, in 1993, English
law came into line with the generally accepted position. (91)
In these circumstances, it cannot be seriously suggested that

arbitrators required to apply general principles of law rather than a
particular national law could refuse to apply the rule of autonomy of
the arbitration clause, even before English law came into line. That
would result in the least widely accepted rule (92) prevailing over the
most widely accepted solution, which cannot be consistent either
with the intent of the parties or with the aims of the transnational
rules method.
Clearly, to require unanimity in comparative law renders the

transnational rules method meaningless. The UNIDROIT Governing
Council correctly observed, in the introduction to the Principles of
International Commercial Contracts, that:
the UNIDROIT Principles reflect concepts to be found

in many, if not all, legal systems. Since however the
Principles are intended to provide a system of rules
334
especially tailored to the needs of international

commercial transactions, they also embody what are
perceived to be the best solutions, even if still not yet
generally adopted. (93)
This same problem recurs, on a different scale, in the context of

regional transnational rules.
b. Regional transnational rules
Sometimes parties who do not wish to submit their potential

disputes to the rules of a particular national law choose to have
regional general principles apply instead. Thus, for example,
contracts may require arbitrators to apply “general principles of law
page "588" applicable in Western Europe” or “general principles
applicable in Northern Europe”. (94) The parties' contractual freedom
to choose the applicable “rules of law” in this way (95) is perfectly
legitimate and must be respected by the arbitrators. The actual rules
at issue will then be determined by the arbitrators in the same way
as for the determination of the content of general principles of
international commerce. The relevant sources will include
international Conventions applicable to or ratified by countries in the
region, the comparative law of the relevant countries, and the case
law of the international tribunals that operate in the region.
Absent agreement by the parties as to the applicable law, the

arbitrators, when exercising their powers to determine the “rules of
law” applicable to the dispute, can also choose to rely on regional
principles. The only issue raised in such circumstances is whether,
on the facts, the application of such rules is appropriate: if the
dispute is connected exclusively to countries with the same legal
tradition, and the conflicts method is not to be used, is it appropriate
to submit the dispute to general regional principles, or is it preferable
to apply general principles of international commerce?
At first glance, the application of regional principles, or principles

drawn from one legal tradition, seems appropriate. For example, in a
dispute connected only with two Arab countries, it might seem
legitimate to apply only general principles of the laws of Arab
jurisdictions. Similarly, in a case having connections only with, say,
France and Argentina, it would be possible to apply only principles
drawn from civil law sources.
However, closer analysis suggests that this approach is not

satisfactory. In practice, arbitrators will be confronted with two types
of situation: firstly, where the available laws lead to the same
conclusion. In such a case, it would be possible to apply regional
principles, but the solution has little practical value because the
conflicts method would produce the same result. This first solution
is therefore unlikely to be considered by the parties, except perhaps
for reasons of national sensitivity. The second type of situation is
more likely to occur in practice, but is more problematic: it is that
where the laws connected to the case, albeit from the same legal
tradition, do not produce the same result. In such a case, the
question of which method to use becomes of great significance.
Once it has been decided that the transnational rules method is to
335
be used, it must then be asked whether it is appropriate to look for a

solution that is generally accepted in the national laws making up
the relevant legal tradition, or rules that are more widely accepted.
Without entering into an exhaustive discussion on the subject, it

seems preferable in such a situation to apply rules that have broad
support in comparative law, international arbitral practice and leading
international Conventions, rather than applying rules which, although
they may come from the same legal tradition, nonetheless lead to
different results. Such a divergence between laws from the same
legal tradition may in fact indicate that principles from a region or
from a same legal tradition are not sufficiently well established, thus
making it necessary to apply principles that are accept page
"589" ed as generally applicable. In this way, the universalist
approach reflected in the transnational rules method will prevail over
the divergent positions of national laws. page "590"
* Partner, Shearman & Sterling, Paris; Professor at the Université

de Paris XII; President, Committee of International Commercial
Arbitration of the International Law Association.
This article is also published in French in the Journal du Droit

International (JDI) (1995, no. 1).
1 “Frontières du droit et ‘lex mercatoria'”, Archives de philosophie

du droit (1964) p. 177. See also by the same author, “La lex
mercatoria dans les contrats et l'arbitrage internationaux: réalité et
perspectives”, JDI (1979) p. 475, and lastly, see “Nouvelles
réflexions sur la Lex Mercatoria” in C. DOMINICE, R. PATRY and C.
REYMOND, eds., Etudes de Droit International en l'Honneur de
Pierre Lalive (Helbing & Lichtenhahn 1993) p. 241. Adde Ph. KAHN,
La vente commercial internationale (Paris 1964); Ph. FOUCHARD,
L'arbitrage commercial international (Dalloz 1965) p. 401 et seq.
2 “The Law of International Trade, its growth, formulation and
operation” in Sources of International Trade (London 1964). See,
same author, “International Business Law: A New Law Merchant”,
Current Law and Social Problems (University of Toronto 1961) p.
129. For earlier theories, including that of E. LAMBERT in the
1920s, see the excellent study by F. DE LY, International Business
Law and Lex Mercatoria (North Holland 1992) esp. p. 207 et seq.
3 For an extensive analysis, see esp. DE LY, op. cit. note 2, p. 217
et seq.; F. OSMAN, Les principes généraux de la lex mercatoria.
Contribution à l'étude d'un ordre juridique anational (LGDJ 1992).
4 See, e.g., studies in German, French, Italian, Spanish and Dutch
cited by K.P. BERGER, International Economic Arbitration (Kluwer
1993) esp. p. 525. For an overview of judicial decisions on this
subject in various jurisdictions (Germany, England, Austria,
Belgium, United States, France, Italy and the Netherlands) see
OSMAN, op. cit. note 3, p. 495 et seq. Adde D.W. RIVKIN,
“Enforceability of Arbitral Awards Based on Lex Mercatoria”, 9
Arbitration International (1993) p. 67.
336
5 See, e.g., DRAETTA, LAKE and NANDA, Breach and Adaptation
of International Contracts. An Introduction to Lex Mercatoria (New
York 1992) and the cited references.
6 A. ZAKI, L'Etat et l'arbitrage (Alger 1979) p. 225 et seq.
7 M. MUSTILL, “The New Lex Mercatoria: The First Twenty-five
Years”, in M. BOS, ed., Liber Amicorum for Lord Wilberforce
(Oxford 1987) p. 149, esp. p. 181, study reproduced in 4 Arbitration
International (1988) p. 86; DE LY, op. cit. note 2, no. 449, p. 289.
8 See esp. P. LAGARDE, “Approche critique de la lex mercatoria”
in Ph. FOUCHARD, ed., Le droit des relations économiques
internationales. Etudes offertes à Berthold Goldman (Litec 1982) p.
125. Adde, same author, note on Paris, 13 July 1989, Valenciana,
Rev. arb. (1990) p. 663.
9 C.W.O. STOECKER, “The Lex Mercatoria: To What Extent Does
It Exist?”, 7 J. Int'l Arb. (1990) p. 101.
10 See, e.g., A. KASSIS, Théorie générale des usages du
commerce, (LGDJ 1984) esp. p. 561 et seq.; G. DELAUME, “The
Proper Law of State Contracts and Lex Mercatoria: A Reappraisal”, 3
ICSID Rev. (1988) p. 79.
11 KASSIS, op. cit. note 10, p. 349 et seq.
12 MUSTILL, op. cit. note 7, p. 181; DE LY, op. cit. note 2, no.
444, p. 283.
13 See, e.g., the group drawn up by GOLDMAN, “La lex mercatoria
dans les contrats et l'arbitrage internationaux”, op. cit. note 1, and,
for a critique of an expansive interpretation, the observations of J.
PAULSSON on the interpretation of the decision handed down by
the Italian Corte di Cassazione (8 February 1982, Riv. dir. int. pub.
priv. (1982) p. 829) in “La lex mercatoria dans l'arbitrage CCI”, Rev.
arb. (1990) p. 55, esp. note 13. On the necessity of drawing a
specific notion from “trade usages”, see also E. GAILLARD, “La
distinction des principes généraux du droit et des usages du
commerce international” in Etudes offertes à Pierre Bellet (Litec
1991) p. 203.
14 On this point see P. MAYER, “Le principe de bonne foi devant
les arbitres du commerce international”, Etudes Lalive, op. cit. note
1, p. 543.
15 See also, J. BEGUIN, “Le développement de la lex mercatoria
menace-t-il l'ordre juridique international?”, McGill L.J. (1985) p. 485.
16 Among many others, the best known example is still that of the
admissibility in international law of certain indexation clauses which
are prohibited in domestic law, Cass. Civ. 21 June 1950, Rev. crit.
dr. int. pr. (1950) p. 609, note H. BATIFFOL. See also the
commentary of B. ANCEL and Y. LEQUETTE, Grands arrêts de la
jurisprudence française et droit international privé (1992) no. 23.
17 MUSTILL, op. cit. note 7, p. 152.
18 See, e.g., in English legal thinking, F.A. MANN, “Lex facit
arbitrum” in P. SANDERS, ed., International Arbitration. Liber
Amicorum for Martin Domk e (The Hague 1987) p. 197. Compare the
less mainstream views of J. LEW, Applicable Law in International
Commercial Arbitration (Oceana 1978).
19 See, e.g., A. VON MEHREN, “To What Extent is International
Commercial Arbitration Autonomous?”, Etudes Goldman, op. cit.
note 8, p. 217; E. GAILLARD, note on Cass. Civ. 1ère, 23 March
337
1994, Hilmarton, JDI (1994) p. 701.

20 On this aspect, see infra, II.2.a.
21 Clauses can still be found, albeit rarely, which show a clear
nostalgia for the contract with no governing law. See, e.g., the
arbitration clause in ICC Case no. 4474, which provides: “The
Arbitrators shall solve the dispute in accordance with the wording
and the spirit of the contract and if necessary they may apply the
French law” (emphasis added, unpublished).
22 See in French law, Cass. Civ. 21 June 1950, supra note 16
(“tout contrat international est nécessairement rattaché à la loi d'un
Etat”). The wording of the Rome Convention of 19 June 1980
according to which “A contract shall be governed by the law chosen
by the parties” (Art. 3(1) first sentence) is usually interpreted in this
way. See P. LAGARDE, “Le nouveau droit international privé des
contrats après l'entrée en vigueur de la Convention de Rome du 19
juin 1980”, Rev. crit. dr. int. pr. (1991) p. 287. On the question
generally, see esp. J.M. JAQUET, Principe d'autonomie et contrats
internationaux (Economica 1983) p. 23 et seq.; V. HEUZE, La
réglementation française des contrats internationaux. Etude critique
des méthodes (GLN Joly 1990) p. 111 et seq.
23 See supra, at I.
24 See, e.g., the ICC award rendered in 1981 in Case no. 3327, JDI
(1982) p. 971, note Y. DERAINS. On transnational rules regarding
the validity of a contract, see E. GAILLARD, “Droit applicable au
fond du litige”, Jr. Cl. Dr. Int. (1991) Fasc. 586-9-1, no. 43.
(1974) p. 892, note R.T. On transnational rules regarding force
majeure and similar defences, see GAILLARD, “Droit applicable au
fond du litige”, op. cit. note 24, no. 69, and D.W. RIVKIN, “Lex
mercatoria and Force Majeure” in Transnational Rules in
International Commercial Arbitration (ICC publication No. 480/4,
1993) p. 161 et seq.
(1974) p. 915, note Y. DERAINS. On the transnational rules on
damages, see GAILLARD, “Droit applicable au fond du litige”, op.
cit. note 24, no. 71 et seq; B. HANOTIAU, “La détermination et
l'évaluation du préjudice réparable: principes généraux et principes
en émergence” in Transnational Rules in International Commercial
Arbitration, op. cit. note 25, p. 209 et seq.
27 See also, the UNIDROIT Principles of International Commercial
Contracts (Rome 1994).
28 B. OPPETIT, “Le paradoxe de la corruption à l'épreuve du droit
du commerce international”, JDI (1987) p. 5.
29 On the question of whether corruption renders the subject matter
non-arbitrable or whether, as is generally accepted today, arbitrators
must retain jurisdiction and declare the agreement void, see B.
GOLDMAN, “Convention d'arbitrage. Arbitrabilité”, Jr. Cl. Dr. Int.
(1989) Fasc. 586-3, no. 86; But see G. WETTER, “Issues of
Corruption Before International Arbitral Tribunals: The Authentic Text
and True Meaning of Judge Lagergren's Award in ICC Case no.
1110”, 10 Arbitration International (1994) p. 277.
30 KASSIS, op. cit. note 10, p. 349 et seq.
31 See for a negative answer, H. VAN HOUTTE, “Changed
circumstances and Pacta Sunt Servanda” in Transnational Rules in
338
International Commercial Arbitration, op. cit. note 25, p. 105 et seq.

and, in the affirmative, the UNIDROIT Principles, Art. 6.2.1 to 6.2.3.
32 For an analysis of comparative law on unforseeability, see, e.g.,
D.M. PHILIPPE, Changement de circonstances et bouleversement
de l'économie contractuelle (Bruylant 1986).
33 This notion was maintained by certain authors during the
discussion that led to the passing, in Cairo, in April 1992, of the
International Law Association's resolution on the application of
transnational rules in international commercial arbitration (Rev. arb.
(1994) p. 211). It explains why a draft resolution condemning the
application of transnational rules where the parties have expressly
chosen a specific legal system to govern their contract has not been
adopted. See the discussion in Transnational Rules in International
Commercial Arbitration, op. cit. note 25, esp. pp. 86-87.
34 Composed of Jiménez de Arechaga, President, Petrowski Jr.,
and El Mahdi, arbitrators, the latter dissenting.
35 JDI (1994) p. 229, esp. p. 223, note E. GAILLARD.
36 See also, G. DELAUME, “The Pyramids Stand. The Pharaohs
Can Rest in Peace”, 8 ICSID Rev. (1993) p. 231; the dissenting
opinion of M. EL MAHDI, 32 International Legal Materials (1993) p.
986, esp. p. 1030, para. no. 88 et seq.; note E. GAILLARD, JDI
(1991) p. 183.
37 18 ILR 144 (1951).
38 On the question generally, see E. GAILLARD: Jr. Cl. Dr. Int.
(1991) Fasc. 586-9-1, no. 92 and the cites.
39 On the question generally, see, e.g., B. GOLDMAN, “Les
conflits de lois dans l'arbitrage international de droit privé”, Recueil
de Cours (The Hague 1963-II) p. 351 et seq.; P. LALIVE, “Les règles
de conflit de lois appliquées au fond du litige par l'arbitre
international siégeant en Suisse”, Rev. arb. (1976) p. 155; Y.
DERAINS, “Attente légitime des parties et droit applicable au fond
en matière d'arbitrage commercial international”, Trav. Co. fr. dr. int.
pr. (1985) p. 81; GAILLARD, “Droit applicable au fond du litige”, op.
cit. note 24, no. 119 et seq.
40 See, e.g., the 1957 Resolution of the Institut de droit
international and G. SAUSER-HALL's Report, Annuaire (1957) p.
469.
41 See supra at I.
(1986) p. 1131, note Y. DERAINS.
43 See Art. 187 of the Swiss Private International Law Act (PILA) or
Art. 39 of the Egyptian Law No. 27 of 1994, providing that, absent
any choice made by the parties, the arbitral tribunal applies the
rules of law with which the case has the closest connections.
44 See, e.g., Art. 1496 of the French New Code of Civil Procedure
(NCCP), Art. 1054 of the Dutch Code of Civil Procedure or Art. 73(2)
of the Tunisian Law of 26 April 1993, reforming arbitration law.
45 See also LALIVE, op. cit. note 39, esp. pp. 181-182; A.
BUCHER, he nouvel arbitrage international en Suisse (Helbing &
Lichtenhahn 1988) no. 249; GAILLARD, “Droit applicable au fond du
litige”, op. cit. note 26, no. 134.
46 For an analysis of the principal transnational conflicts rules, see,
e.g., GOLDMAN, “Les conflits de lois dans l'arbitrage international
339
de droit privé”, op. cit. note 39.

47 See Cass. Civ. 1ère, 20 December 1993, Dalico, Rev. arb.
(1994) p. 116, note H. GAUDEMET-TALLON; JDI (1994) p. 432, note
E. GAILLARD.
48 On the generally accepted transnational rules regarding the
existence and the validity of the arbitration agreement, see, e.g., B.
GOLDMAN, “Convention d'arbitrage”, Jr. Cl. Dr. Int. (1989) Fasc.
586-1 et seq.
49 On the continued existence of this requirement in the laws of
certain Latin American countries, see, e.g., V. MAROTTA RANGEL,
“National Report Brazil” in International Handbook on Commercial
Arbitration (1988).
50 On the question generally, see note GAILLARD, op. cit. note 19,
JDI (1994) p. 433.
51 See, e.g., Art. 1496 of the French NCCP, Art. 1054(1) of the
Dutch Code of Civil Procedure, Art. 187 of the Swiss PILA or Art.
28(1) of the UNCITRAL Model Law.
52 See Ph. FOUCHARD, “La loi type de la CNUDCI sur l'arbitrage
commercial international”, JDI (1987) p. 861; H.M. HOLTZMANN and
J.E. NEUHAUS, A Guide to the UNCITRAL Model Law on
International Commercial Arbitration (Kluwer 1989) p. 764.
53 Art. 36 Model Law.
54 See, e.g., Art. 1496 of the French NCCP, Art. 1054(2) of the
Dutch CCP or Art. 187 of the Swiss PILA.
55 Rev. arb. (1994) p. 211. See the in-depth discussion of this
resolution in Transnational Rules in International Commercial
Arbitration, op. cit. note 25, p. 37 et seq.
56 See infra at III et seq.
57 Composed of B. Cremades, President, Ghestin and Steiner,
arbitrators.
58 Rev. arb. (1983) p. 525 (ICC Case no. 3131). On the subsequent
proceedings, see, e.g., B. GOLDMAN, “Une bataille judiciaire autour
de la lex mercatoria. L'affaire Norsolor”, Rev. arb. (1983) p. 525.
59 Art. V(2)(b).
60 P. LALIVE, “Transnational (or Truly International) Public Policy
and International Arbitration” in P. SANDERS, ed., Comparative
Arbitration Practice and Public Policy in Arbitration, ICCA Congress
Series No. 3 (Kluwer 1987) p. 257; “Ordre public transnational (ou
réellement international) et arbitrage international”, Rev. arb. (1986)
p. 329. Adde L. MATRAY, “Arbitrage et ordre public transnational” in
J.C. SCHULTSZ and A.J. VAN DEN BERG, eds., The Art of
Arbitration. Essays on International Arbitration. Liber Amicorum
Pieter Sanders (Kluwer 1982) p. 244.
61 See supra at I. Compare P. MAYER, “La règle morale dans
l'arbitrage international” in Etudes Bellet, op. cit. note 1, p. 379, esp.
p. 390 et seq., who, on the basis that the arbitrators do not have a
forum, considers the will of the arbitrator to be the justification for
displacing a rule that would otherwise apply, when such a rule is
contrary to the arbitrator's conception of morality.
62 See the award rendered in 1984 by E. Jiménez de Arechaga,
K.H. Böckstiegel and J.H. Pickering in ICC Case no. 4695, ICCA
Yearbook Commercial Arbitration XI (1986) p. 149.
63 See Cass. Civ. 1ère 23 March 1994, Hilmarton, JDI (1994) note
340
E. GAILLARD.
64 See the examples infra at III.1.
65 Op. cit., supra, note 7.
66 See, e.g., Ph. KAHN, “Les principes généraux du droit devant
les arbitres du commerce international”, JDI (1989) p. 305, esp. p.
325. For a response to the argument that the list is short, see also
A. LOWENFELD, “Lex mercatoria: An Arbitrator's View”, 6
Arbitration International (1990) p. 133 and GOLDMAN, “Nouvelles
Réflexions sur la Lex Mercatoria”, op. cit. note 1, esp. p. 243.
67 See supra at II.2.b.ii.
68 Unpublished clause. On the “tronc commun” method, which is
one of the specific ways in which the transnational rules method is
applied, see esp. M. RUBINO-SAMMARTANO, “Le tronc commun
des lois nationales en présence: réflexions sur le droit applicable par
l'arbitre international”, Rev. arb. (1987) p. 133.
69 Unpublished clause.
70 Unpublished clause.
71 See, e.g., the unpublished arbitration clause seen in ICC Case
no. 5331:
This agreement shall be given effect and shall be

applied and interpreted in accordance with the terms
of this Agreement, then with the Federal law of the
United Arab Emirates and then with generally
recognized principles of international commercial law.
On the meaning of this wording which, in ICSID arbitration,

corresponds, absent party agreement, to the application of Art. 42(1)
of the Washington Convention, see note GAILLARD, JDI (1991) op.
cit. note 36, p. 181 et seq.
72 On this question, see GAILLARD, “La distinction des principes

généraux du droit et des usages du commerce international”,
Etudes Bellet, op. cit. note 13, p. 203.
73 See supra at II.1.a.
74 See, e.g., in ICC Case no. 4722: “the arbitration committee shall
take into consideration the terms of the contract and the trade
usages” (unpublished clause).
75 It is important to emphasize here that arbitrators cannot, without
violating the requirements of due process, decide the dispute by
applying a particular transnational rule without having heard the
parties' views as to the rule's existence and content. This is
particularly important in the situation in which, failing the parties'
agreement on applicable law, the arbitrators decide on their own to
resolve the dispute by reference to transnational rules.
76 See esp. Art. 38 et seq. of the Convention.
77 See esp. Art. 7.2.2 of the Principles.
(1992) p. 1006, note D. HASCHER.
79 See, e.g., the ICC award rendered in 1989 in Case no. 5713,
ICCA Yearbook Commercial Arbitration XV (1990) p. 70. On the
question generally, see supra the contribution of A. GIARDINA on
341
“International Conventions on Conflict of Laws and Substantive Law”.

80 See, e.g., the ICC award rendered in 1989 in Case no. 5885,
ICCA Yearbook Commercial Arbitration XVI (1991) p. 91, esp. p. 92.
81 See, e.g., OSMAN, op. cit. note 3.
82 See the respective contributions of H. VAN HOUTTE, P.
BOWDEN, P. BERNARDINI, Ph. O'NEILL and N. SALAM, D.W.
RIVKIN, B. HANOTIAU and P. KARRER in Transnational Rules in
International Commercial Arbitration, op. cit. note 25, p. 105 et seq.
See also the excellent article by E. LOQUIN, “La réalité des usages
du commerce international”, Rev. gén. dr. éco. (1989) p. 163.
83 Publication of UNIDROIT (Rome 1994).
84 Preamble, p. 1.
85 See the working papers of the ICC-UNIDROIT Symposium on
“The UNIDROIT Principles of International Commercial Contracts: A
New Lex Mercatoria?”, held in Paris on 20-21 October 1994. Adde
M.J. BONELL, An International Restatement of Contract Law. The
UNIDROIT Principles of International Commercial Contracts
(Transnational Juris Publication Inc., Irvington 1994).
86 217 Recueil des Cours (1989-V) p. 432.
87 See supra at II.1.b.
88 See supra at I.
89 On the question generally, see B. GOLDMAN, “Convention
d'arbitrage”, op. cit. note 29, Fasc. 586-1.
90 On the question, see, e.g., A. SAMUEL, “Separability in English
Law”, 3 Journal of International Arbitration (1986) p. 95; J. STEYN
and V.V. VEEDER, “National Report England” in International
Handbook on Commercial Arbitration (1988) p. 14: “The concept of
the separability of the arbitration clause has not yet been fully
worked out by the English courts”. Compare for a presentation that
is much more favourable to the autonomy of the agreement to
arbitrate, presented as though “relatively new but widely recognized”,
A. REDFERN and M. HUNTER, International Commercial Arbitration
(1991) 2nd ed., p. 174 et seq., esp. p. 176.
91 Harbour Assurance v. Kansa [1993] QB 70. See also the draft
bill on arbitration, Art. 3(e), 10 Arbitration International (1994) p. 189
at p. 194.
92 On the example of legal systems that require the restatement of
the agreement to arbitrate once the dispute is begun, see supra at
II.2.b.
93 Op. cit., p. viii.
94 See supra at III.1.
95 See supra at II.2.b.ii.

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342
343
Lumbermens Mut. Cas. Co. v. Broadspire Management..., 623 F.3d 476 (2010)
Whether company is bound to arbitrate, as well

as what issues it must arbitrate, is matter to be
623 F.3d 476
determined by court on basis of contract entered
United States Court of Appeals,
into by parties.
Seventh Circuit.
1 Cases that cite this headnote
LUMBERMENS MUTUAL CASUALTY
COMPANY, Plaintiff-Appellee,
v. [3] Alternative Dispute Resolution
BROADSPIRE MANAGEMENT SERVICES, INC. Arbitrability of dispute
and Platinum Equity, LLC, Defendants-Appellants. Alternative Dispute Resolution
Merits of controversy
No. 09-4051. | Argued May 19, In ruling on motion to compel arbitration, court
2010. | Decided Oct. 13, 2010. determines whether parties' grievance belongs
in arbitration, not rule on potential merits of
Synopsis
underlying dispute between parties.
Background: Seller of insurance administration business
sued buyer, to compel arbitration of purchase price disputes. 2 Cases that cite this headnote
The United States District Court for the Northern District
of Illinois, Harry D. Leinenweber, J., 2008 WL 1774565,
concluded that question of whether necessary preconditions [4] Alternative Dispute Resolution
to arbitration had been satisfied was for arbitrator. Buyer Conditions precedent to arbitration;
appealed. procedural arbitrability
Issue of whether seller of insurance
administration business had adequately disputed
buyer's price reports was procedural question
[Holding:] The Court of Appeals, Williams, Circuit Judge,
about condition precedent to arbitration of
held that issue of whether seller had adequately disputed
parties' agreement, and one for the arbitrator;
buyer's price reports was procedural question about condition
disagreements over whether preconditions had
precedent to arbitration, and one for the arbitrator.
been met grew out of a dispute between the
parties and bore directly on arbitrator's final
Affirmed. disposition of what the purchase price should be.
2 Cases that cite this headnote
West Headnotes (4)
Attorneys and Law Firms

[1] Alternative Dispute Resolution
Scope and standards of review *477 Paul T. Fox (argued), Greenberg Traurig, Chicago, IL,
Court of Appeals reviews district court's decision for Plaintiff-Appellee.
to compel arbitration de novo, and any findings
of fact for clear error. James D. Dasso (argued), Foley & Lardner, LLP, Chicago,
IL, for Defendants-Appellants.
Before O'CONNOR, Associate Justice, * and WILLIAMS

[2] Alternative Dispute Resolution
and SYKES, Circuit Judges.
Matters to Be Determined by Court
Alternative Dispute Resolution Opinion
Arbitrability of dispute
WILLIAMS, Circuit Judge.
344 U.S. Government Works.

© 2013 Thomson Reuters. No claim to original 1
This appeal involves a debate over the arbitrability of four were based. See generally Agreement § 3.3. Upon receiving a
purchase price disputes arising out of a transaction between report from Broadspire, Lumbermens had 90 days to review
Lumbermens Mutual Casualty Company (“Lumbermens”) it, during which time Broadspire had to make available to
and Broadspire Management Services, Inc. (“Broadspire”). Lumbermens any books and records relevant to the review.
Lumbermens sold Broadspire an insurance administration If Lumbermens decided that it agreed with Broadspire's
business in 2003 pursuant to a purchase agreement which determination, it would send an “Acceptance Notice” so
provided that certain kinds of price disputes stemming indicating, or do nothing at all, and the amount Broadspire
from the transaction would be referred to an accounting had set forth would become the binding payment amount for
or appraisal firm for arbitration. Four such price disputes that year. But if Lumbermens disagreed with Broadspire's
arose, and Lumbermens sought to resolve them under determination, it had to send Broadspire a “Disagreement
the purchase price dispute procedure. Broadspire refused, Notice” saying so within the 90-day period. A Disagreement
asserting that Lumbermens had failed to satisfy certain Notice has to “set[ ] forth in reasonable detail the basis for
necessary preconditions set forth in the purchase agreement; such disagreement and [Lumbermens'] determination of the
specifically, that Lumbermens' written notices stating its payment required to be paid to [Lumbermens] under this
disagreements with Broadspire's price determinations lacked Section 3.3.” Agreement § 3.3(g).
the requisite detail. The issue before us is whether the court
or the arbitrator should decide this question of whether the
necessary preconditions to arbitration have been satisfied. A. The Purchase Price Dispute Arbitration Clause
The district court concluded that the question was for the If Lumbermens submitted a timely Disagreement Notice to
arbitrator, and we agree, because the issue of whether Broadspire indicating disagreement with a given earnout or
Lumbermens has adequately disputed Broadspire's price lump sum report, the parties first had 30 days to try and
reports is a procedural question about a condition precedent resolve the differences themselves. Failing that, the dispute
to arbitration. We affirm. would be submitted to an accounting or appraisal firm for
arbitration:
Purchase Price Disputes. If a party delivers a

I. BACKGROUND Disagreement Notice to the other party in a timely
manner, then Buyer and Seller shall attempt in good
In July 2003, Lumbermens sold Broadspire 1 an insurance faith to resolve such dispute within 30 days from the
administration business pursuant to a written Purchase date of such notice. If Buyer and Seller cannot reach
Agreement (the “Agreement”). No cash was exchanged at agreement ... then the dispute shall be promptly referred
the time of the closing. Instead, the purchase price was to to an independent accounting or appraisal firm of national
be based on a series of annual “earnout” and “lump sum” reputation mutually acceptable to Buyer and Seller, or
payments to be made by Broadspire over the four years if the parties are unable to agree on such a firm
following the transaction, which the parties defined as the within 10 days ... to PricewaterhouseCoopers LLP (the
“earnout period.” Earnout payments would be based on the “Accounting/Appraisal Firm”) for binding resolution. The
financial performance of the purchased business each year Accounting/Appraisal Firm may conduct such proceedings
during the earnout period. Lump sum payments would be as the Accounting/Appraisal Firm, in its sole discretion,
made if Broadspire sold off any parts of the purchased determines will assist in resolving the dispute and shall,
company during the earnout period, based on an estimate of within 60 days ... deliver ... a written report setting
the expected performance of the sold asset over the remainder forth its determination of all disputed amounts ... and its
of the four years. determinations will be conclusive and binding upon the
parties.
*478 Article III of the Agreement, titled “Purchase Price,”
set forth the methodology and procedures for determining Agreement § 3.4.
the amount of the payments due each year. Broadspire had
to calculate the amounts owed pursuant to a formula set
B. The General Arbitration Clause
forth in the Agreement, and prepare and deliver reports
In addition to the § 3.4 arbitration procedure intended
to Lumbermens setting forth in “reasonable detail” the
specifically for Article III price disputes, the Agreement also
calculations and assumptions on which its determinations

contains a catch-all arbitration provision for all other disputes. of Illinois, seeking to compel arbitration under the § 3.4
It provides: provision and to compel Broadspire to produce certain
documents and information to which it had not given
Dispute Resolution. Except as otherwise provided for in Lumbermens access.
Article III, the following shall constitute the exclusive
procedures and remedies for all disputes arising out of or The district court ruled in favor of Lumbermens. With
relating to this Agreement. regard to which arbitration clause governed the dispute, §
3.4 or the broader § 14.11, the district judge concluded
Agreement § 14.11. Section 14.11 requires that the parties
that “Lumbermens is clearly right” and that the Article
attempt in good faith to resolve disputes arising out
III purchase price dispute procedure applied. The court
of the Agreement, but if they cannot, it provides for
concluded that the question of whether Lumbermens'
binding arbitration by a three-arbitrator panel in accordance
Disagreement Notices were adequate was “certainly within
with the International Institute for Conflict Prevention &
the purview of the arbitrator” and that the question was one
Resolution (“CPR”) Rules for Non-Administered Arbitration,
that was “peculiarly within the competence” of an accounting/
and governed by the Federal Arbitration Act, 9 U.S.C. § 1 et
appraisal firm. The district judge ordered the parties to
seq. (“FAA”).
arbitrate the disputes under the § 3.4 procedures, and to
each submit within ten days of his ruling the names of two
*479 C. The Four Purchase Price Disputes potential accounting or appraisal firms to act as arbitrator to
The full history of the transaction and dispute between the replace PricewaterhouseCoopers, which was already acting
parties is somewhat complex, but all of those details are as an arbitrator in an unrelated Article III price dispute
not necessary to resolve question before us. At issue here arbitration. 3 The court also ordered *480 Broadspire to
are disputes over four price reports-three lump sum reports produce certain documents. Broadspire appealed.
dated December 7, 2005, March 16, 2006, and October
16, 2006, and one earnout report dated June 22, 2006-
that Broadspire provided to Lumbermens under the above-
II. ANALYSIS
described process and Lumbermens then timely disputed.
On each occasion, Lumbermens sent a Disagreement Notice The question before us is whether a court or an arbitrator
2
regarding Broadspire's price determination. Each was should decide the question of whether the parties' disputes are
relatively general. Broadspire disputed the sufficiency of arbitrable under § 3.4 of the Agreement. Broadspire contends
the Disagreement Notices, arguing that they did not meet that Lumbermens did not file valid Disagreement Notices and
§ 3.3(g)'s requirement that they contain (1) “reasonable has thus failed to satisfy a necessary precondition to bringing
detail” and (2) Lumbermens alternative “determination of the the dispute within the scope of § 3.4 arbitration, and that a
payment required.” Lumbermens claimed that it could not court, not the § 3.4 arbitrator, should determine whether this
provide the requisite level of detail called for by § 3.3(g), is in fact the case. 4 Lumbermens responds that the § 3.4
because Broadspire's price reports were themselves lacking in procedure encompasses all disputes relating to purchase price,
details that would enable Lumbermens to do so. Lumbermens including any disputes over the sufficiency of Disagreement
also claimed in its Disagreement Notices that it had not been Notices themselves, and that it is for the § 3.4 arbitrator, not
given sufficient access to the books and records necessary to a court, to evaluate their sufficiency. Like the district court,
properly evaluate Broadspire's determinations. we agree with Lumbermens and conclude that the sufficiency
of the Disagreement Notices is a question to be answered by
Lumbermens sought arbitration of each of these four disputes the § 3.4 arbitrator.
under the Purchase Price Dispute procedures set forth in §
3.4 of the Agreement, but Broadspire refused to arbitrate on [1] [2] [3] We review a district court's decision to compel
the basis that Lumbermens had not met the precondition of arbitration de novo, and any findings of fact for clear error.
filing adequate Disagreement Notices. Instead, Broadspire Zurich Am. Ins. Co. v. Watts Indus., Inc., 466 F.3d 577, 580
sought to commence panel arbitration of the disputes under (7th Cir.2006). “Whether or not [a] company [is] bound to
the more general § 14.11 procedures. Eventually, on January arbitrate, as well as what issues it must arbitrate, is a matter
19, 2007, Lumbermens filed a Petition in Aid of Arbitration to be determined by the court on the basis of the contract
in the United States District Court for the Northern District entered into by the parties.” John Wiley & Sons, Inc. v.

Livingston, 376 U.S. 543, 547, 84 S.Ct. 909, 11 L.Ed.2d 898 forbade consolidated arbitration was a procedural one for the
(1964) (citations omitted). In ruling on a motion to compel arbitrator to answer, noting that “[t]he Supreme Court made
arbitration, we “determine whether the parties' grievance clear in Howsam that procedural issues are presumptively for
belongs in arbitration, not rule on the potential merits of the the arbitrator to decide.” (citation omitted). And in Zurich
underlying dispute between the parties.” Zurich Am. Ins. Co., American Insurance Co., we found that questions about the
466 F.3d at 581. preclusive effect of a California state judgment on the scope
of the parties' arbitrable disputes were similarly an issue for
the arbitrator. 466 F.3d at 581. We concluded that because the
A. The Howsam Framework issue of preclusion was being raised by a party as a defense to
The Supreme Court's decision in Howsam v. Dean Witter arbitration, it was a procedural question under Howsam that
Reynolds, Inc., 537 U.S. 79, 84, 123 S.Ct. 588, 154 L.Ed.2d fell to the arbitrator to decide. Id.
491 (2002), clarified the division of labor between arbitrators
and judges in cases like this one and provides the framework
for our analysis. In Howsam, the Court determined that the B. The Disagreement Notice Dispute Is a Question for
question of whether a grievance has been brought within the Arbitrator
a time period set by a National Association of Securities [4] Just like the questions in Howsam, Zurich American,
Dealers rule is a “gateway procedural dispute” for the or Employers Insurance, the adequacy of Lumbermens'
arbitrator, not a court, to decide. 537 U.S. at 85, 123 S.Ct. 588. Disagreement Notices is a procedural question about a
The Court held that “procedural questions which grow out of condition precedent to arbitration under § 3.4 of the
the dispute and bear on its final disposition are presumptively parties' agreement and is for the arbitrator to address. See
not for the judge, but for an arbitrator, to decide. So, too, the Howsam, 537 U.S. at 84-85, 123 S.Ct. 588; Zurich Am.
presumption is that the arbitrator should decide allegations Ins. Co., 466 F.3d at 581; Employers Ins., 443 F.3d at 577.
of waiver, delay, or a like defense to arbitrability.” Id. Lumbermens' and Broadspire's disagreements over whether
at 84-85, 123 S.Ct. 588 (emphasis in original) (internal the preconditions have been met grow out of the dispute
citations and quotations omitted). The Howsam Court noted between the parties and bear directly on the arbitrator's
that the Revised Uniform Arbitration Act (“RUAA”), which final disposition of what the purchase price should be. See
“incorporate[s] the holdings of the vast majority of state John Wiley, 376 U.S. at 557, 84 S.Ct. 909. In determining
courts and the law that has developed under the FAA” whether a Disagreement Notice contains sufficient detail, the
supported its conclusion. Howsam, 537 U.S. at 84-85, 123 § 3.4 arbitrator will be examining the same documents and
S.Ct. 588 (citing RUAA § 6(c) and comment 2). The RUAA assessing the same issues relevant to the actual substantive
provides that “an arbitrator shall decide whether a condition resolution of the parties' price dispute. It would be strange
precedent to arbitrability has been fulfilled.” RUAA § 6(c). to divide these largely overlapping tasks between the court
Under Howsam, questions such as whether prerequisites to and the arbitrator. See id. (“It would be a curious rule which
arbitration have been met, or questions of waiver, delay, or required that intertwined issues ... growing out of a single
other defenses to arbitrability, should be determined by the dispute and raising the same questions on the same facts
arbitrator. See Howsam, 537 U.S. at 84-85, 123 S.Ct. 588; had to be carved up between two different forums, one
see also *481 John Wiley, 376 U.S. at 557, 84 S.Ct. 909 deciding after the other. Neither logic nor considerations of
(arbitrator, not court, should decide whether the party seeking policy compel such a result.”). This is particularly true in
arbitration had properly completed grievance procedure that a case like this one, when the determination being made
was prerequisite to arbitration under parties' agreement); is one within the particular expertise of the arbitrator, not
Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 a court. See Howsam, 537 U.S. at 85, 123 S.Ct. 588 (law
U.S. 1, 24-25, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983) (“waiver, assumes “expectation that aligns (1) decisionmaker with (2)
delay, or a like defense” are questions for arbitrator). comparative expertise”); see also JPD, Inc. v. Chronimed
Holdings, Inc., 539 F.3d 388, 393 (6th Cir.2008) (accounting
Our circuit has followed Howsam in distinguishing between firm “undoubtedly possesses greater expertise in determining
“substantive” and “procedural” arbitrability questions, and in how much disclosure an EBITDA audit requires”). In
holding that the latter are presumptively for an arbitrator to evaluating whether Lumbermens' Disagreement Notices
decide. In Employers Insurance Co. of Wausau v. Century provide the “reasonable detail” required by § 3.3(g), the
Indemnity Co., 443 F.3d 573, 581 (7th Cir.2006), for example, arbitrator will necessarily be engaging in a fact-intensive,
we held that the question of whether an arbitration agreement specialized inquiry very similar to the inquiry it would

vacated the district court's ruling, concluding, inter alia,

undertake in order to actually determine what the proper
that the question of whether Chronimed had sufficiently
purchase price should be.
documented the pharmacy's finances was “exactly the type
of condition [ ] precedent to an obligation to arbitrate that
*482 “In certain contexts, it is appropriate to presume that
Howsam presumptively allocated to the arbitrator.” Id. at
parties that enter into an arbitration agreement implicitly
392-93 (internal quotation omitted). The same conclusion
authorize the arbitrator to adopt such procedures as are
is appropriate here. Just as questions over the sufficiency
necessary to give effect to the parties' agreement.” Stolt-
of an EBITDA calculation were issues about a condition
Nielsen S.A. v. AnimalFeeds Int'l Corp., --- U.S. ----, 130
precedent allocated to the arbitrator in JPD, questions
S.Ct. 1758, 1775, 176 L.Ed.2d 605 (2010) (citing Howsam,
over the sufficiency of Lumbermens' Disagreement Notices-
537 U.S. at 84, 123 S.Ct. 588). The Agreement here presents
similarly a condition precedent to price dispute arbitration-
one such context. It is appropriate to presume that the
are questions for the § 3.4 arbitrator here. See id.; see also
parties have implicitly authorized the § 3.4 arbitrator to
Dealer Computer Servs., Inc. v. Old Colony Motors, Inc., 588
adopt procedures necessary to give effect to their agreement.
F.3d 884, 887 (5th Cir.2009) (payment of fees is question
Section 3.4 itself provides that the arbitrator may “conduct
of procedural condition precedent to arbitration that is for
such proceedings as [it] ... determines will assist in resolving
arbitrator, not a court, to decide).
the dispute....” Determining the adequacy of Disagreement
Notices logically falls within this grant of authority. Indeed,
Broadspire cites our decision in R.J. Corman Derailment
evaluating such documents is inextricably related to the core
Services, LLC v. International Union of Operating Engineers,
function that the arbitrator performs under the Agreement-
422 F.3d 522, 528 (7th Cir.2005), in support of its argument to
reaching a conclusion as to “all disputed amounts” at issue.
the contrary, but that case is inapposite. In Corman, the parties
Agreement § 3.4.
disputed whether a grievance was timely under the terms of
an expired *483 collective bargaining agreement. 422 F.3d
An analogous case from the Sixth Circuit buttresses our
at 527. The dispute involved a question of “whether there
conclusion here. In JPD, Inc. v. Chronimed Holdings, Inc.,
was an agreement to arbitrate this set of grievances at all,” a
the parties signed a purchase agreement for the sale of a
fundamental question of arbitrability properly answered by a
pharmacy that involved a price dispute arbitration process
court. Id.; see Howsam, 537 U.S. at 84, 123 S.Ct. 588. The
nearly identical to the one set forth in Article III here.
dispute in this case is different, and falls on the other side
539 F.3d at 392-93. The purchaser, Chronimed, had to
of the Howsam divide for a key reason. Here, there is no
send an earnings before interest, taxes, depreciation, and
dispute as to the existence of an agreement to arbitrate itself.
amortization (“EBITDA”) calculation to the seller, DiCello,
Instead, this is a procedural dispute over preconditions to that
for the purposes of determining an “additional purchase
arbitration. See Employers Ins., 443 F.3d at 577 (procedural
price payment” to be made to DiCello after the transaction
question of arbitrability was for arbitrator because it “does
based on the pharmacy's 2006 earnings. Id. at 390. If
not involve whether Wausau and Century are bound by an
DiCello disagreed with the calculation, he had to file an
arbitration clause or whether the arbitration clause covers the
objection setting forth in “reasonable detail” the basis for
Aqua-Chem policies.”); see also Dealer, 588 F.3d at 887. For
his disagreement, and if the parties could not settle the
us to accept Broadspire's argument “would require a court to
dispute in good faith, it would be referred to an accounting
delve too deeply into questions of the parties' compliance with
firm for resolution just as in the case before us. See id.
the terms of the agreement, which are more properly for the
DiCello did object to Chronimed's EBITDA calculation, but
arbitrator.” Corman, 422 F.3d at 528.
instead of pursuing arbitration, sued for an accounting and
damages. Id. Chronimed moved to stay the suit and compel
arbitration, which the district court denied on a waiver theory.
Id. On appeal, DiCello argued that arbitration before the III. CONCLUSION
accounting firm was not proper because Chronimed had
failed to sufficiently document its EBITDA calculation, thus The district court's ruling is AFFIRMED.
waiving its right to arbitrate the dispute under the purchase
agreement. Id. at 391-92. Applying Howsam, the Sixth Circuit

Footnotes
* The Honorable Sandra Day O'Connor, Associate Justice (Retired) of the United States Supreme Court, sitting by designation.
1 We use the term “Broadspire” to include Defendant-Appellant Platinum Equity, LLC as well. Platinum's role in the transaction is not
discussed by the parties in their briefs, but it is characterized in a district court pleading as Broadspire's “former owner.” Platinum
sought to have itself dismissed from the case before the district court, but the court rejected that motion and held that the question
of whether Platinum is a proper party is for the arbitrator. That aspect of the district court's ruling was not specifically appealed, nor
does Platinum make any separate arguments from those made by Broadspire.
2 Our use of the term “Disagreement Notice” in referring to Lumbermens' objections should not be taken as reflecting any conclusion
as to their sufficiency. As we explain herein, that is a question for the § 3.4 arbitrator. Clearly, however, Lumbermens meant for
them to be Disagreement Notices; the first objection was obviously disputing Broadspire's December 7, 2005 price report and made
reference to Agreement § 3.3(g), and each of the latter three actually bore the heading “Disagreement Notice.”
3 At the time, the parties were in § 3.4 arbitration regarding a fifth price dispute, over Broadspire's 2004 Earnout Report. That report
is not at issue in this litigation. We do note, however, that Broadspire did not challenge the arbitrability of that dispute, despite the
fact that Lumbermens' Disagreement Notice for that report arguably had the same flaws Broadspire found in the later notices.
4 Although it argued it before the district court, Broadspire does not take the position on appeal that the § 14.11 arbitration procedure
should apply instead.
End of Document © 2013 Thomson Reuters. No claim to original U.S. Government Works.

350
(Slip Opinion) OCTOBER TERM, 2013 1
Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is

being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
SUPREME COURT OF THE UNITED STATES
Syllabus
BG GROUP PLC v. REPUBLIC OF ARGENTINA
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR

THE DISTRICT OF COLUMBIA CIRCUIT
No. 12–138. Argued December 2, 2013—Decided March 5, 2014

An investment treaty (Treaty) between the United Kingdom and Ar-
gentina authorizes a party to submit a dispute “to the decision of the
competent tribunal of the Contracting Party in whose territory the
investment was made,” i.e., a local court, Art. 8(1); and permits arbi-
tration, as relevant here, “where, after a period of eighteen months
has elapsed from the moment when the dispute was submitted to
[that] tribunal . . . , the said tribunal has not given its final decision,”
Art. 8(2)(a)(i).
Petitioner BG Group plc, a British firm, belonged to a consortium
with a majority interest in MetroGAS, an Argentine entity awarded
an exclusive license to distribute natural gas in Buenos Aires. At the
time of BG Group’s investment, Argentine law provided that gas “tar-
iffs” would be calculated in U. S. dollars and would be set at levels
sufficient to assure gas distribution firms a reasonable return. But
Argentina later amended the law, changing (among other things) the
calculation basis to pesos. MetroGAS’ profits soon became losses.
Invoking Article 8, BG Group sought arbitration, which the parties
sited in Washington, D. C. BG Group claimed that Argentina’s new
laws and practices violated the Treaty, which forbids the “expropria-
tion” of investments and requires each nation to give “fair and equi-
table treatment” to investors from the other. Argentina denied those
claims, but also argued that the arbitrators lacked “jurisdiction” to
hear the dispute because, as relevant here, BG Group had not com-
plied with Article 8’s local litigation requirement. The arbitration
panel concluded that it had jurisdiction, finding, among other things,
that Argentina’s conduct (such as also enacting new laws that hin-
dered recourse to its judiciary by firms in BG Group’s situation) had
excused BG Group’s failure to comply with Article 8’s requirement.
351
2 BG GROUP PLC v. REPUBLIC OF ARGENTINA
Syllabus
On the merits, the panel found that Argentina had not expropriated
BG Group’s investment but had denied BG Group “fair and equitable
treatment.” It awarded damages to BG Group. Both sides sought re-
view in federal district court: BG Group to confirm the award under
the New York Convention and the Federal Arbitration Act (FAA),
and Argentina to vacate the award, in part on the ground that the
arbitrators lacked jurisdiction under the FAA. The District Court
confirmed the award, but the Court of Appeals for the District of Co-
lumbia Circuit vacated. It found that the interpretation and applica-
tion of Article 8’s requirement were matters for courts to decide de
novo, i.e., without deference to the arbitrators’ views; that the cir-
cumstances did not excuse BG Group’s failure to comply with the re-
quirement; and that BG Group had to commence a lawsuit in Argen-
tina’s courts and wait 18 months before seeking arbitration. Thus,
the court held, the arbitrators lacked authority to decide the dispute.
Held:
1. A court of the United States, in reviewing an arbitration award
made under the Treaty, should interpret and apply “threshold” provi-
sions concerning arbitration using the framework developed for in-
terpreting similar provisions in ordinary contracts. Under that
framework, the local litigation requirement is a matter for arbitra-
tors primarily to interpret and apply. Courts should review their in-
terpretation with deference. Pp. 6–17.
(a) Were the Treaty an ordinary contract, it would call for arbi-
trators primarily to interpret and to apply the local litigation provi-
sion. In an ordinary contract, the parties determine whether a par-
ticular matter is primarily for arbitrators or for courts to decide. See,
e.g., Steelworkers v. Warrior & Gulf Nav. Co., 363 U. S. 574, 582. If
the contract is silent on the matter of who is to decide a “threshold”
question about arbitration, courts determine the parties’ intent using
presumptions. That is, courts presume that the parties intended
courts to decide disputes about “arbitrability,” e.g., Howsam v. Dean
Witter Reynolds, Inc., 537 U. S. 79, 84, and arbitrators to decide dis-
putes about the meaning and application of procedural preconditions
for the use of arbitration, see id., at 86, including, e.g., claims of
“waiver, delay, or a like defense to arbitrability,” Moses H. Cone Me-
morial Hospital v. Mercury Constr. Corp., 460 U. S. 1, 25, and the
satisfaction of, e.g., “ ‘time limits, notice, laches, [or] estoppel,’ ” How-
sam, 537 U. S., at 85. The provision at issue is of the procedural va-
riety. As its text and structure make clear, it determines when the
contractual duty to arbitrate arises, not whether there is a contractu-
al duty to arbitrate at all. Neither its language nor other language in
Article 8 gives substantive weight to the local court’s determinations
on the matters at issue between the parties. The litigation provision
352
Cite as: 572 U. S. ____ (2014) 3
Syllabus
is thus a claims-processing rule. It is analogous to other procedural

provisions found to be for arbitrators primarily to interpret and ap-
ply, see, e.g., ibid., and there is nothing in Article 8 or the Treaty to
overcome the ordinary assumption. Pp. 7–9.
(b) The fact that the document at issue is a treaty does not make
a critical difference to this analysis. A treaty is a contract between
nations, and its interpretation normally is a matter of determining
the parties’ intent. Air France v. Saks, 470 U. S. 392, 399. Where, as
here, a federal court is asked to interpret that intent pursuant to a
motion to vacate or confirm an award made under the Federal Arbi-
tration Act, it should normally apply the presumptions supplied by
American law. The presence of a condition of “consent” to arbitration
in a treaty likely does not warrant abandoning, or increasing the
complexity of, the ordinary intent-determining framework. See, e.g.,
Howsam, supra, at 83–85. But because this Treaty does not state
that the local litigation requirement is a condition of consent, the
Court need not resolve what the effect of any such language would be.
The Court need not go beyond holding that in the absence of lan-
guage in a treaty demonstrating that the parties intended a different
delegation of authority, the ordinary interpretive framework applies.
Pp. 10–13.
(c) The Treaty contains no evidence showing that the parties had
an intent contrary to the ordinary presumptions about who should
decide threshold arbitration issues. The text and structure of Article
8’s litigation requirement make clear that it is a procedural condition
precedent to arbitration. Because the ordinary presumption applies
and is not overcome, the interpretation and application of the provi-
sion are primarily for the arbitrators, and courts must review their
decision with considerable deference. Pp. 13–17.
2. While Argentina is entitled to court review (under a properly
deferential standard) of the arbitrators’ decision to excuse BG
Group’s noncompliance with the litigation requirement, that review
shows that the arbitrators’ determinations were lawful. Their con-
clusion that the litigation provision cannot be construed as an abso-
lute impediment to arbitration, in all cases, lies well within their in-
terpretative authority. Their factual findings that Argentina passed
laws hindering recourse to the local judiciary by firms similar to BG
Group are undisputed by Argentina and are accepted as valid. And
their conclusion that Argentina’s actions made it “absurd and unrea-
sonable” to read Article 8 to require an investor in BG Group’s posi-
tion to bring its grievance in a domestic court, before arbitrating, is
not barred by the Treaty. Pp. 17–19.
665 F. 3d 1363, reversed.
353
Syllabus
BREYER, J., delivered the opinion of the Court, in which SCALIA,

THOMAS, GINSBURG, ALITO, and KAGAN, JJ., joined, and in which SO-
TOMAYOR, J., joined except for Part IV–A–1. SOTOMAYOR, J., filed an
opinion concurring in part. ROBERTS, C. J., filed a dissenting opinion, in
which KENNEDY, J., joined.
354
Cite as: 572 U. S. ____ (2014) 1
Opinion of the Court
NOTICE: This opinion is subject to formal revision before publication in the

preliminary print of the United States Reports. Readers are requested to
notify the Reporter of Decisions, Supreme Court of the United States, Wash
ington, D. C. 20543, of any typographical or other formal errors, in order
that corrections may be made before the preliminary print goes to press.

_________________
No. 12–138
_________________
BG GROUP PLC, PETITIONER v. REPUBLIC OF
ARGENTINA
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT
[March 5, 2014]
JUSTICE BREYER delivered the opinion of the Court.

Article 8 of an investment treaty between the United
Kingdom and Argentina contains a dispute-resolution pro
vision, applicable to disputes between one of those na
tions and an investor from the other. See Agreement
for the Promotion and Protection of Investments, Art. 8(2),
Dec. 11, 1990, 1765 U. N. T. S. 38 (hereinafter Treaty).
The provision authorizes either party to submit a dispute
“to the decision of the competent tribunal of the Contract
ing Party in whose territory the investment was made,”
i.e., a local court. Art. 8(1). And it provides for arbitration
“(i) where, after a period of eighteen months has
elapsed from the moment when the dispute was sub
mitted to the competent tribunal . . . , the said tribu
nal has not given its final decision; [or]
“(ii) where the final decision of the aforementioned
tribunal has been made but the Parties are still in
dispute.” Art. 8(2)(a).
The Treaty also entitles the parties to agree to proceed
directly to arbitration. Art. 8(2)(b).
This case concerns the Treaty’s arbitration clause, and
355
specifically the local court litigation requirement set forth

in Article 8(2)(a). The question before us is whether a
court of the United States, in reviewing an arbitration
award made under the Treaty, should interpret and apply
the local litigation requirement de novo, or with the defer
ence that courts ordinarily owe arbitration decisions. That
is to say, who—court or arbitrator—bears primary respon
sibility for interpreting and applying the local litigation
requirement to an underlying controversy? In our view,
the matter is for the arbitrators, and courts must review
their determinations with deference.
I
In the early 1990’s, the petitioner, BG Group plc, a

British firm, belonged to a consortium that bought a ma
jority interest in an Argentine entity called MetroGAS.
MetroGAS was a gas distribution company created by
Argentine law in 1992, as a result of the government’s
privatization of its state-owned gas utility. Argentina
distributed the utility’s assets to new, private companies,
one of which was MetroGAS. It awarded MetroGAS a 35
year exclusive license to distribute natural gas in Buenos
Aires, and it submitted a controlling interest in the com
pany to international public tender. BG Group’s consor
tium was the successful bidder.
At about the same time, Argentina enacted statutes
providing that its regulators would calculate gas “tariffs”
in U. S. dollars, and that those tariffs would be set at
levels sufficient to assure gas distribution firms, such as
MetroGAS, a reasonable return.
In 2001 and 2002, Argentina, faced with an economic
crisis, enacted new laws. Those laws changed the basis for
calculating gas tariffs from dollars to pesos, at a rate of
one peso per dollar. The exchange rate at the time was
roughly three pesos to the dollar. The result was that
356
Cite as: 572 U. S. ____ (2014) 3
MetroGAS’ profits were quickly transformed into losses.

BG Group believed that these changes (and several others)
violated the Treaty; Argentina believed the contrary.
B
In 2003, BG Group, invoking Article 8 of the Treaty,
sought arbitration. The parties appointed arbitrators;
they agreed to site the arbitration in Washington, D. C.;
and between 2004 and 2006, the arbitrators decided mo
tions, received evidence, and conducted hearings. BG
Group essentially claimed that Argentina’s new laws and
regulatory practices violated provisions in the Treaty
forbidding the “expropriation” of investments and requir
ing that each nation give “fair and equitable treatment” to
investors from the other. Argentina denied these claims,
while also arguing that the arbitration tribunal lacked
“jurisdiction” to hear the dispute. App. to Pet. for Cert.
143a–144a, 214a–218a, 224a–232a. According to Argen
tina, the arbitrators lacked jurisdiction because: (1) BG
Group was not a Treaty-protected “investor”; (2) BG
Group’s interest in MetroGAS was not a Treaty-protected
“investment”; and (3) BG Group initiated arbitration
without first litigating its claims in Argentina’s courts,
despite Article 8’s requirement. Id., at 143a–171a. In
Argentina’s view, “failure by BG to bring its grievance to
Argentine courts for 18 months renders its claims in this
arbitration inadmissible.” Id., at 162a.
In late December 2007, the arbitration panel reached a
final decision. It began by determining that it had “juris
diction” to consider the merits of the dispute. In support
of that determination, the tribunal concluded that BG
Group was an “investor,” that its interest in MetroGAS
amounted to a Treaty-protected “investment,” and that
Argentina’s own conduct had waived, or excused, BG
Group’s failure to comply with Article 8’s local litigation
requirement. Id., at 99a, 145a, 161a, 171a. The panel
357
pointed out that in 2002, the President of Argentina had

issued a decree staying for 180 days the execution of its
courts’ final judgments (and injunctions) in suits claiming
harm as a result of the new economic measures. Id., at
166a–167a. In addition, Argentina had established a
“renegotiation process” for public service contracts, such
as its contract with MetroGAS, to alleviate the negative
impact of the new economic measures. Id., at 129a, 131a.
But Argentina had simultaneously barred from participa
tion in that “process” firms that were litigating against
Argentina in court or in arbitration. Id., at 168a–171a.
These measures, while not making litigation in Argenti
na’s courts literally impossible, nonetheless “hindered”
recourse “to the domestic judiciary” to the point where the
Treaty implicitly excused compliance with the local litiga
tion requirement. Id., at 165. Requiring a private party
in such circumstances to seek relief in Argentina’s courts
for 18 months, the panel concluded, would lead to “absurd
and unreasonable result[s].” Id., at 166a.
On the merits, the arbitration panel agreed with Argen
tina that it had not “expropriate[d]” BG Group’s invest
ment, but also found that Argentina had denied BG Group
“fair and equitable treatment.” Id., at 222a–223a, 240a–
242a. It awarded BG Group $185 million in damages. Id.,
at 297a.
C
In March 2008, both sides filed petitions for review in
the District Court for the District of Columbia. BG Group
sought to confirm the award under the New York Conven
tion and the Federal Arbitration Act. See Convention on
the Recognition and Enforcement of Foreign Arbitral
Awards, Art. IV, June 10, 1958, 21 U. S. T. 2519, T. I. A. S.
No. 6997 (New York Convention) (providing that a party
may apply “for recognition and enforcement” of an arbitral
award subject to the Convention); 9 U. S. C. §§204, 207
358
Cite as: 572 U. S. ____ (2014) 5
(providing that a party may move “for an order confirming

[an arbitral] award” in a federal court of the “place desig
nated in the agreement as the place of arbitration if such
place is within the United States”). Argentina sought to
vacate the award in part on the ground that the arbitra
tors lacked jurisdiction. See §10(a)(4) (a federal court may
vacate an arbitral award “where the arbitrators exceeded
their powers”).
The District Court denied Argentina’s claims and con
firmed the award. 764 F. Supp. 2d 21 (DC 2011); 715 F.
Supp. 2d 108 (DC 2010). But the Court of Appeals for the
District of Columbia Circuit reversed. 665 F. 3d 1363
(2012). In the appeals court’s view, the interpretation and
application of Article 8’s local litigation requirement was a
matter for courts to decide de novo, i.e., without deference
to the views of the arbitrators. The Court of Appeals then
went on to hold that the circumstances did not excuse BG
Group’s failure to comply with the requirement. Rather,
BG Group must “commence a lawsuit in Argentina’s
courts and wait eighteen months before filing for arbitra
tion.” Id., at 1373. Because BG Group had not done so,
the arbitrators lacked authority to decide the dispute.
And the appeals court ordered the award vacated. Ibid.
BG Group filed a petition for certiorari. Given the
importance of the matter for international commercial ar
bitration, we granted the petition. See, e.g., K. Van
develde, Bilateral Investment Treaties: History, Policy
& Interpretation 430–432 (2010) (explaining that dispute
resolution mechanisms allowing for arbitration are a
“critical element” of modern day bilateral investment
treaties); C. Dugan, D. Wallace, N. Rubins, & B. Sabahi,
Investor-State Arbitration 51–52, 117–120 (2008) (refer
ring to the large number of investment treaties that pro
vide for arbitration, and explaining that some also impose
prearbitration requirements such as waiting periods,
amicable negotiations, or exhaustion of local remedies).
359
II
As we have said, the question before us is who—court or
arbitrator—bears primary responsibility for interpreting
and applying Article 8’s local court litigation provision.
Put in terms of standards of judicial review, should a
United States court review the arbitrators’ interpretation
and application of the provision de novo, or with the defer
ence that courts ordinarily show arbitral decisions on
matters the parties have committed to arbitration? Com
pare, e.g., First Options of Chicago, Inc. v. Kaplan, 514
U. S. 938, 942 (1995) (example where a “court makes up
its mind about [an issue] independently” because the
parties did not agree it should be arbitrated), with Oxford
Health Plans LLC v. Sutter, 569 U. S. ___, ___ (2013) (slip
op., at 4) (example where a court defers to arbitrators
because the parties “ ‘bargained for’ ” arbitral resolution of
the question (quoting Eastern Associated Coal Corp. v.
Mine Workers, 531 U. S. 57, 62 (2000))). See also Hall
Street Associates, L. L. C. v. Mattel, Inc., 552 U. S. 576,
588 (2008) (on matters committed to arbitration, the Fed
eral Arbitration Act provides for “just the limited review
needed to maintain arbitration’s essential virtue of resolv
ing disputes straightaway” and to prevent it from be
coming “merely a prelude to a more cumbersome and
time-consuming judicial review process” (internal quotation
marks omitted)); Eastern Associated Coal Corp., supra, at
62 (where parties send a matter to arbitration, a court will
set aside the “arbitrator’s interpretation of what their
agreement means only in rare instances”).
In answering the question, we shall initially treat the
document before us as if it were an ordinary contract
between private parties. Were that so, we conclude, the
matter would be for the arbitrators. We then ask whether
the fact that the document in question is a treaty makes a
critical difference. We conclude that it does not.
360
Cite as: 572 U. S. ____ (2014) 7
III
Where ordinary contracts are at issue, it is up to the
parties to determine whether a particular matter is pri
marily for arbitrators or for courts to decide. See, e.g.,
Steelworkers v. Warrior & Gulf Nav. Co., 363 U. S. 574,
582 (1960) (“[A]rbitration is a matter of contract and a
party cannot be required to submit to arbitration any
dispute which he has not agreed so to submit”). If
the contract is silent on the matter of who primarily
is to decide “threshold” questions about arbitration,
courts determine the parties’ intent with the help of
presumptions.
On the one hand, courts presume that the parties intend
courts, not arbitrators, to decide what we have called
disputes about “arbitrability.” These include questions
such as “whether the parties are bound by a given arbitra
tion clause,” or “whether an arbitration clause in a con
cededly binding contract applies to a particular type of
controversy.” Howsam v. Dean Witter Reynolds, Inc., 537
U. S. 79, 84 (2002); accord, Granite Rock Co. v. Teamsters,
561 U. S. 287, 299–300 (2010) (disputes over “formation of
the parties’ arbitration agreement” and “its enforceability
or applicability to the dispute” at issue are “matters . . .
the court must resolve” (internal quotation marks omit
ted)). See First Options, supra, at 941, 943–947 (court
should decide whether an arbitration clause applied to a
party who “had not personally signed” the document con
taining it); AT&T Technologies, Inc. v. Communications
Workers, 475 U. S. 643, 651 (1986) (court should decide
whether a particular labor-management layoff dispute fell
within the arbitration clause of a collective-bargaining
contract); John Wiley & Sons, Inc. v. Livingston, 376 U. S.
543, 546–548 (1964) (court should decide whether an
arbitration provision survived a corporate merger). See
generally AT&T Technologies, supra, at 649 (“Unless the
parties clearly and unmistakably provide otherwise, the
361
question of whether the parties agreed to arbitrate is to be

decided by the court, not the arbitrator”).
On the other hand, courts presume that the parties
intend arbitrators, not courts, to decide disputes about the
meaning and application of particular procedural precon
ditions for the use of arbitration. See Howsam, supra, at
86 (courts assume parties “normally expect a forum-based
decisionmaker to decide forum-specific procedural gateway
matters” (emphasis added)). These procedural matters
include claims of “waiver, delay, or a like defense to arbi
trability.” Moses H. Cone Memorial Hospital v. Mercury
Constr. Corp., 460 U. S. 1, 25 (1983). And they include the
satisfaction of “ ‘prerequisites such as time limits, notice,
laches, estoppel, and other conditions precedent to an
obligation to arbitrate.’ ” Howsam, supra, at 85 (quoting
the Revised Uniform Arbitration Act of 2000 §6, Comment
2, 7 U. L. A. 13 (Supp. 2002); emphasis deleted). See also
§6(c) (“An arbitrator shall decide whether a condition
precedent to arbitrability has been fulfilled”); §6, Com
ment 2 (explaining that this rule reflects “the holdings of
the vast majority of state courts” and collecting cases).
The provision before us is of the latter, procedural,
variety. The text and structure of the provision make
clear that it operates as a procedural condition precedent
to arbitration. It says that a dispute “shall be submitted
to international arbitration” if “one of the Parties so re
quests,” as long as “a period of eighteen months has
elapsed” since the dispute was “submitted” to a local tri
bunal and the tribunal “has not given its final decision.”
Art. 8(2). It determines when the contractual duty to
arbitrate arises, not whether there is a contractual duty to
arbitrate at all. Cf. 13 R. Lord, Williston on Contracts
§38:7, pp. 435, 437; §38:4, p. 422 (4th ed. 2013) (a “condi
tion precedent” determines what must happen before “a
contractual duty arises” but does not “make the validity of
the contract depend on its happening” (emphasis added)).
362
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Neither does this language or other language in Article 8

give substantive weight to the local court’s determinations
on the matters at issue between the parties. To the con
trary, Article 8 provides that only the “arbitration decision
shall be final and binding on both Parties.” Art. 8(4). The
litigation provision is consequently a purely procedural
requirement—a claims-processing rule that governs when
the arbitration may begin, but not whether it may occur or
what its substantive outcome will be on the issues in
dispute.
Moreover, the local litigation requirement is highly
analogous to procedural provisions that both this Court
and others have found are for arbitrators, not courts,
primarily to interpret and to apply. See Howsam, supra,
at 85 (whether a party filed a notice of arbitration within
the time limit provided by the rules of the chosen arbitral
forum “is a matter presumptively for the arbitrator, not
for the judge”); John Wiley, supra, at 555–557 (same, in
respect to a mandatory prearbitration grievance procedure
that involved holding two conferences). See also Dialysis
Access Center, LLC v. RMS Lifeline, Inc., 638 F. 3d 367,
383 (CA1 2011) (same, in respect to a prearbitration “good
faith negotiations” requirement); Lumbermens Mut. Cas.
Co. v. Broadspire Management Servs., Inc., 623 F. 3d 476,
481 (CA7 2010) (same, in respect to a prearbitration filing
of a “Disagreement Notice”).
Finally, as we later discuss in more detail, see infra,
at 13–14, we can find nothing in Article 8 or elsewhere in
the Treaty that might overcome the ordinary assumption.
It nowhere demonstrates a contrary intent as to the dele
gation of decisional authority between judges and arbitra
tors. Thus, were the document an ordinary contract, it
would call for arbitrators primarily to interpret and to
apply the local litigation provision.
363
IV
We now relax our ordinary contract assumption and ask

whether the fact that the document before us is a treaty
makes a critical difference to our analysis. The Solicitor
General argues that it should. He says that the local
litigation provision may be “a condition on the State’s
consent to enter into an arbitration agreement.” Brief for
United States as Amicus Curiae 25. He adds that courts
should “review de novo the arbitral tribunal’s resolution of
objections based on an investor’s non-compliance” with
such a condition. Ibid. And he recommends that we
remand this case to the Court of Appeals to determine
whether the court-exhaustion provision is such a condi
tion. Id., at 31–33.
1
We do not accept the Solicitor General’s view as applied
to the treaty before us. As a general matter, a treaty is
a contract, though between nations. Its interpretation
normally is, like a contract’s interpretation, a matter of
determining the parties’ intent. Air France v. Saks, 470
U. S. 392, 399 (1985) (courts must give “the specific words
of the treaty a meaning consistent with the shared expec
tations of the contracting parties”); Sullivan v. Kidd, 254
U. S. 433, 439 (1921) (“[T]reaties are to be interpreted
upon the principles which govern the interpretation of
contracts in writing between individuals, and are to be
executed in the utmost good faith, with a view to making
effective the purposes of the high contracting parties”);
Wright v. Henkel, 190 U. S. 40, 57 (1903) (“Treaties must
receive a fair interpretation, according to the intention of
the contracting parties”). And where, as here, a federal
court is asked to interpret that intent pursuant to a mo
tion to vacate or confirm an award made in the United
States under the Federal Arbitration Act, it should nor
364
Cite as: 572 U. S. ____ (2014) 11
mally apply the presumptions supplied by American law.

See New York Convention, Art. V(1)(e) (award may be “set
aside or suspended by a competent authority of the coun
try in which, or under the law of which, that award was
made”); Vandevelde, Bilateral Investment Treaties, at 446
(arbitral awards pursuant to treaties are “subject to re
view under the arbitration law of the state where the
arbitration takes place”); Dugan, Investor-State Arbitra
tion, at 636 (“[T]he national courts and the law of the legal
situs of arbitration control a losing party’s attempt to set
aside [an] award”).
The Solicitor General does not deny that the presump
tion discussed in Part III, supra (namely, the presumption
that parties intend procedural preconditions to arbitration
to be resolved primarily by arbitrators), applies both to
ordinary contracts and to similar provisions in treaties
when those provisions are not also “conditions of consent.”
Brief for United States as Amicus Curiae 25–27. And,
while we respect the Government’s views about the proper
interpretation of treaties, e.g., Abbott v. Abbott, 560 U. S.
1, 15 (2010), we have been unable to find any other au
thority or precedent suggesting that the use of the “con
sent” label in a treaty should make a critical difference
in discerning the parties’ intent about whether courts
or arbitrators should interpret and apply the relevant
provision.
We are willing to assume with the Solicitor General that
the appearance of this label in a treaty can show that the
parties, or one of them, thought the designated matter
quite important. But that is unlikely to be conclusive. For
parties often submit important matters to arbitration.
And the word “consent” could be attached to a highly
procedural precondition to arbitration, such as a waiting
period of several months, which the parties are unlikely to
have intended that courts apply without saying so. See,
e.g., Agreement on Encouragement and Reciprocal Protec
365
tion of Investments, Art. 9, Netherlands-Slovenia, Sept.

24, 1996, Netherlands T. S. No. 296 (“Each Contracting
Party hereby consents to submit any dispute . . . which
they can not [sic] solve amicably within three months . . .
to the International Center for Settlement of Disputes
for settlement by conciliation or arbitration”), online at
www.rijksoverheid.nl/documenten-en-publicaties/besluiten/
2006/10/17/slovenia.html (all Internet materials as visited
on Feb. 28, 2014, and available in Clerk of Court’s case
file); Agreement for the Promotion and Protection of
Investments, Art. 8(1), United Kingdom-Egypt, June 11,
1975, 14 I. L. M. 1472 (“Each Contracting Party hereby
consents to submit” a dispute to arbitration if “agreement
cannot be reached within three months between the par
ties”). While we leave the matter open for future argu
ment, we do not now see why the presence of the term
“consent” in a treaty warrants abandoning, or increasing
the complexity of, our ordinary intent-determining frame
work. See Howsam, 537 U. S., at 83–85; First Options,
514 U. S., at 942–945; John Wiley, 376 U. S., at 546–549,
555–559.
2
In any event, the treaty before us does not state that the
local litigation requirement is a “condition of consent” to
arbitration. Thus, we need not, and do not, go beyond
holding that, in the absence of explicit language in a
treaty demonstrating that the parties intended a different
delegation of authority, our ordinary interpretive frame
work applies. We leave for another day the question of
interpreting treaties that refer to “conditions of consent”
explicitly. See, e.g., United States-Korea Free Trade
Agreement, Art. 11.18, Feb. 10, 2011 (provision entitled
“Conditions and Limitations on Consent of Each Party”
and providing that “[n]o claim may be submitted to
arbitration under this Section” unless the claimant
waives in writing “any right” to press his claim before
366
Cite as: 572 U. S. ____ (2014) 13
an “administrative tribunal or court”), online at www.

ustr.gov/trade-agreements/free-trade-agreements/korus-fta/
final-text; North American Free Trade Agreement, Arts.
1121–1122, Dec. 17, 1992, 32 I. L. M. 643–644 (pro-
viding that each party’s “[c]onsent to [a]rbitration” is
conditioned on fulfillment of certain “procedures,” one of
which is a waiver by an investor of his right to litigate the
claim being arbitrated). See also 2012 U. S. Model Bilat
eral Investment Treaty, Art. 26 (entitled “Conditions and
limitations on Consent of Each Party”), online at
www.ustr.gov / sites / default / files / BIT % 20text%20for%
20ACIEP%20Meeting.pdf. And we apply our ordinary
presumption that the interpretation and application of
procedural provisions such as the provision before us are
primarily for the arbitrators.
B
A treaty may contain evidence that shows the parties
had an intent contrary to our ordinary presumptions
about who should decide threshold issues related to arbi
tration. But the treaty before us does not sho w any such
contrary intention. We concede that the local litigation
requirement appears in ¶(1) of Article 8, while the Article
does not mention arbitration until the subsequent para
graph, ¶(2). Moreover, a requirement that a party ex
haust its remedies in a country’s domestic courts before
seeking to arbitrate may seem particularly important to a
country offering protections to foreign investors. And the
placing of an important matter prior to any mention of
arbitration at least arguably suggests an intent by Argen
tina, the United Kingdom, or both, to have courts rather
than arbitrators apply the litigation requirement.
These considerations, however, are outweighed by oth
ers. As discussed supra, at 8–9, the text and structure of
the litigation requirement set forth in Article 8 make clear
that it is a procedural condition precedent to arbitration—
367
a sequential step that a party must follow before giving

notice of arbitration. The Treaty nowhere says that the
provision is to operate as a substantive condition on the
formation of the arbitration contract, or that it is a matter
of such elevated importance that it is to be decided by
courts. International arbitrators are likely more familiar
than are judges with the expectations of foreign investors
and recipient nations regarding the operation of the provi
sion. See Howsam, supra, at 85 (comparative institutional
expertise a factor in determining parties’ likely intent).
And the Treaty itself authorizes the use of international
arbitration associations, the rules of which provide that
arbitrators shall have the authority to interpret provisions
of this kind. Art. 8(3) (providing that the parties may
refer a dispute to the International Centre for the Settle
ment of Investment Disputes (ICSID) or to arbitrators
appointed pursuant to the arbitration rules of the United
Nations Commission on International Trade Law
(UNCITRAL)); accord, UNCITRAL Arbitration Rules, Art.
23(1) (rev. 2010 ed.) (“[A]rbitral tribunal shall have the
power to rule on its own jurisdiction”); ICSID Convention,
Regulations and Rules, Art. 41(1) (2006 ed.) (“Tribunal
shall be the judge of its own competence”). Cf. Howsam,
supra, at 85 (giving weight to the parties’ incorporation of
the National Association of Securities Dealers’ Code of
Arbitration into their contract, which provided for similar
arbitral authority, as evidence that they intended arbitra
tors to “interpret and apply the NASD time limit rule”).
The upshot is that our ordinary presumption applies
and it is not overcome. The interpretation and application
of the local litigation provision is primarily for the arbi
trators. Reviewing courts cannot review their decision
de novo. Rather, they must do so with considerable
deference.
C
The dissent interprets Article 8’s local litigation provi
368
Cite as: 572 U. S. ____ (2014) 15
sion differently. In its view, the provision sets forth not a

condition precedent to arbitration in an already-binding
arbitration contract (normally a matter for arbitrators to
interpret), but a substantive condition on Argentina’s con
sent to arbitration and thus on the contract’s formation
in the first place (normally something for courts to inter
pret). It reads the whole of Article 8 as a “unilateral
standing offer” to arbitrate that Argentina and the United
Kingdom each extends to investors of the other country.
Post, at 9 (opinion of ROBERTS, C. J.). And it says that the
local litigation requirement is one of the essential “ ‘terms
in which the offer was made.’ ” Post, at 6 (quoting Eliason
v. Henshaw, 4 Wheat. 225, 228 (1819); emphasis deleted).
While it is possible to read the provision in this way,
doing so is not consistent with our case law interpreting
similar provisions appearing in ordinary arbitration con
tracts. See Part III, supra. Consequently, interpreting
the provision in such a manner would require us to treat
treaties as warranting a different kind of analysis. And
the dissent does so without supplying any different set of
general principles that might guide that analysis. That is
a matter of some concern in a world where foreign invest
ment and related arbitration treaties increasingly matter.
Even were we to ignore our ordinary contract princi
ples, however, we would not take the dissent’s view. As
we have explained, the local litigation provision on its face
concerns arbitration’s timing, not the Treaty’s effective
date; or whom its arbitration clause binds; or whether that
arbitration clause covers a certain kind of dispute. Cf.
Granite Rock, 561 U. S., at 296–303 (ratification date);
First Options, 514 U. S., at 941, 943–947 (parties); AT&T
Technologies, 475 U. S., at 651 (kind of dispute). The
dissent points out that Article 8(2)(a) “does not simply
require the parties to wait for 18 months before proceeding
to arbitration,” but instructs them to do something—to
“submit their claims for adjudication.” Post, at 8. That is
369
correct. But the something they must do has no direct

impact on the resolution of their dispute, for as we previ
ously pointed out, Article 8 provides that only the decision
of the arbitrators (who need not give weight to the local
court’s decision) will be “final and binding.” Art. 8(4). The
provision, at base, is a claims-processing rule. And the
dissent’s efforts to imbue it with greater significance fall
short.
The treatises to which the dissent refers also fail to
support its position. Post, at 3, 6. Those authorities pri
marily describe how an offer to arbitrate in an investment
treaty can be accepted, such as through an investor’s filing
of a notice of arbitration. See J. Salacuse, The Law of
Investment Treaties 381 (2010); Schreuer, Consent to
Arbitration, in The Oxford Handbook of International
Investment Law 830, 836–837 (P. Muchlinski, F. Ortino, &
C. Schreuer eds. 2008); Dugan, Investor-State Arbitration,
at 221–222. They do not endorse the dissent’s reading of
the local litigation provision or of provisions like it.
To the contrary, the bulk of international authority
supports our view that the provision functions as a purely
procedural precondition to arbitrate. See 1 G. Born, In
ternational Commercial Arbitration 842 (2009) (“A sub
stantial body of arbitral authority from investor-state
disputes concludes that compliance with procedural mecha
nisms in an arbitration agreement (or bilateral investment
treaty) is not ordinarily a jurisdictional prerequisite”);
Brief for Professors and Practitioners of Arbitration Law
as Amici Curiae 12–16 (to assume the parties intended
de novo review of the provision by a court “is likely to
set United States courts on a collision course with the
international regime embodied in thousands of [bilateral
investment treaties]”). See also Schreuer, Consent to
Arbitration, supra, at 846–848 (“clauses of this kind . . .
creat[e] a considerable burden to the party seeking arbi
tration with little chance of advancing the settlement of
370
Cite as: 572 U. S. ____ (2014) 17
the dispute,” and “the most likely effect of a clause of this

kind is delay and additional cost”).
In sum, we agree with the dissent that a sovereign’s
consent to arbitration is important. We also agree that
sovereigns can condition their consent to arbitrate by
writing various terms into their bilateral investment
treaties. Post, at 9–10. But that is not the issue. The
question is whether the parties intended to give courts or
arbitrators primary authority to interpret and apply a
threshold provision in an arbitration contract—when the
contract is silent as to the delegation of authority. We
have already explained why we believe that where, as
here, the provision resembles a claims-processing re
quirement and is not a requirement that affects the arbi
tration contract’s validity or scope, we presume that the
parties (even if they are sovereigns) intended to give that
authority to the arbitrators. See Parts III, IV–A and
IV–B, supra.
V
Argentina correctly argues that it is nonetheless en
titled to court review of the arbitrators’ decision to excuse
BG Group’s noncompliance with the litigation require
ment, and to take jurisdiction over the dispute. It asks us
to provide that review, and it argues that even if the proper
standard is “a [h]ighly [d]eferential” one, it should still
prevail. Brief for Respondent 50. Having the relevant
materials before us, we shall provide that review. But we
cannot agree with Argentina that the arbitrators “ ‘exceed
ed their powers’ ” in concluding they had jurisdiction. Ibid.
(quoting 9 U. S. C. §10(a)(4)).
The arbitration panel made three relevant determinations:
(1) “As a matter of treaty interpretation,” the local
litigation provision “cannot be construed as an absolute
impediment to arbitration,” App. to Pet. for Cert. 165a;
371
(2) Argentina enacted laws that “hindered” “recourse to

the domestic judiciary” by those “whose rights were alleg
edly affected by the emergency measures,” id., at 165a–
166a; that sought “to prevent any judicial interference
with the emergency legislation,” id., at 169a; and that
“excluded from the renegotiation process” for public ser
vice contracts “any licensee seeking judicial redress,” ibid.;
(3) under these circumstances, it would be “absurd and
unreasonable” to read Article 8 as requiring an investor to
bring its grievance to a domestic court before arbitrating.
Id., at 166a.
The first determination lies well within the arbitrators’
interpretive authority. Construing the local litigation
provision as an “absolute” requirement would mean Ar
gentina could avoid arbitration by, say, passing a law that
closed down its court system indefinitely or that prohibit
ed investors from using its courts. Such an interpretation
runs contrary to a basic objective of the investment treaty.
Nor does Argentina argue for an absolute interpretation.
As to the second determination, Argentina does not
argue that the facts set forth by the arbitrators are incor
rect. Thus, we accept them as valid.
The third determination is more controversial. Argen
tina argues that neither the 180-day suspension of courts’
issuances of final judgments nor its refusal to allow liti
gants (and those in arbitration) to use its contract renego
tiation process, taken separately or together, warrants
suspending or waiving the local litigation requirement.
We would not necessarily characterize these actions as
rendering a domestic court-exhaustion requirement “ab
surd and unreasonable,” but at the same time we cannot
say that the arbitrators’ conclusions are barred by the
Treaty. The arbitrators did not “ ‘stra[y] from interpreta
tion and application of the agreement’ ” or otherwise “ ‘ef
fectively “dispens[e]” ’ ” their “ ‘own brand of . . . justice.’ ”
Stolt-Nielsen S. A. v. AnimalFeeds Int’l Corp., 559 U. S.
372
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662, 671 (2010) (providing that it is only when an arbitra

tor engages in such activity that “ ‘his decision may be
unenforceable’ ” (quoting Major League Baseball Players
Assn. v. Garvey, 532 U. S. 504, 509 (2001) (per curiam)).
Consequently, we conclude that the arbitrators’ jurisdic
tional determinations are lawful. The judgment of the
Court of Appeals to the contrary is reversed.
It is so ordered.
373
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SOTOMAYOR, J., concurring in part

_________________
No. 12–138
_________________
ARGENTINA
[March 5, 2014]
JUSTICE SOTOMAYOR, concurring in part.

I agree with the Court that the local litigation require-
ment at issue in this case is a procedural precondition to
arbitration (which the arbitrators are to interpret), not a
condition on Argentina’s consent to arbitrate (which a
court would review de novo). Ante, at 8, 14. Importantly,
in reaching this conclusion, the Court acknowledges that
“the treaty before us does not state that the local litiga-
tion requirement is a ‘condition of consent’ to arbitration.”
Ante, at 12. The Court thus wisely “leave[s] for another
day the question of interpreting treaties that refer to
‘conditions of consent’ explicitly.” Ibid. I join the Court’s
opinion on the understanding that it does not, in fact, de-
cide this issue.
I write separately because, in the absence of this express
reservation, the opinion might be construed otherwise.
The Court appears to suggest in dictum that a decision by
treaty parties to describe a condition as one on their con-
sent to arbitrate “is unlikely to be conclusive” in deciding
whether the parties intended for the condition to be re-
solved by a court. Ante, at 11. Because this suggestion is
unnecessary to decide the case and is in tension with the
Court’s explicit reservation of the issue, I join the opinion
of the Court with the exception of Part IV–A–1.
The Court’s dictum on this point is not only unneces-
374
sary; it may also be incorrect. It is far from clear that a

treaty’s express use of the term “consent” to describe a
precondition to arbitration should not be conclusive in the
analysis. We have held, for instance, that “a gateway
dispute about whether the parties are bound by a given
arbitration clause raises a ‘question of arbitrability’ for a
court to decide.” Howsam v. Dean Witter Reynolds, Inc.,
537 U. S. 79, 84 (2002). And a party plainly cannot be
bound by an arbitration clause to which it does not con-
sent. See Granite Rock Co. v. Teamsters, 561 U. S. 287,
299 (2010) (“Arbitration is strictly ‘a matter of consent’ ”
(quoting Volt Information Sciences, Inc. v. Board of Trust-
ees of Leland Stanford Junior Univ., 489 U. S. 468, 479
(1989)).
Consent is especially salient in the context of a bilateral
investment treaty, where the treaty is not an already
agreed-upon arbitration provision between known parties,
but rather a nation state’s standing offer to arbitrate with
an amorphous class of private investors. In this setting, a
nation-state might reasonably wish to condition its con-
sent to arbitrate with a previously unspecified investor
counterparty on the investor’s compliance with a require-
ment that might be deemed “purely procedural” in the
ordinary commercial context, ante, at 9. Moreover, as THE
CHIEF JUSTICE notes, “[i]t is no trifling matter” for a sov-
ereign nation to “subject itself to international arbitration”
proceedings, so we should “not presume that any country
. . . takes that step lightly.” Post, at 9 (dissenting opinion).
Consider, for example, the United States-Korea Free
Trade Agreement, which as the Court recognizes, ante, at
12–13, includes a provision explicitly entitled “Conditions
and Limitations on Consent of Each Party.” Art. 11.18,
Feb. 10, 2011. That provision declares that “[n]o claim
may be submitted to arbitration” unless a claimant first
waives its “right to initiate or continue before any admin-
istrative tribunal or court . . . any proceeding with respect
375
Cite as: 572 U. S. ____ (2014) 3
to any measure alleged to constitute a breach” under

another provision of the treaty. Ibid. If this waiver con-
dition were to appear without the “consent” label in a
binding arbitration agreement between two commercial
parties, one might characterize it as the kind of procedural
“ ‘condition precedent to arbitrability’ ” that we presume
parties intend for arbitrators to decide. Howsam, 537
U. S., at 85. But where the waiver requirement is ex-
pressly denominated a “condition on consent” in an interna-
tional investment treaty, the label could well be critical in
determining whether the states party to the treaty in-
tended the condition to be reviewed by a court. After all, a
dispute as to consent is “the starkest form of the question
whether the parties have agreed to arbitrate.” Post, at 13.
And we ordinarily presume that parties intend for courts
to decide such questions because otherwise arbitrators
might “force unwilling parties to arbitrate a matter they
reasonably would have thought a judge . . . would decide.”
First Options of Chicago, Inc. v. Kaplan, 514 U. S. 938,
945 (1995).
Accordingly, if the local litigation requirement at issue
here were labeled a condition on the treaty parties’ “con-
sent” to arbitrate, that would in my view change the anal-
ysis as to whether the parties intended the requirement to
be interpreted by a court or an arbitrator. As it is, how-
ever, all parties agree that the local litigation requirement
is not so denominated. See Agreement for the Promotion
and Protection of Investments, Art. 8(2), Dec. 11, 1990,
1765 U. N. T. S. 38. Nor is there compelling reason to
suppose the parties silently intended to make it a condi-
tion on their consent to arbitrate, given that a local court’s
decision is of no legal significance under the treaty, ante,
at 8–9, and given that the entire purpose of bilateral
investment agreements is to “reliev[e] investors of any
concern that the courts of host countries will be unable or
unwilling to provide justice in a dispute between a for-
376
eigner and their own government,” Brief for Professors

and Practitioners of Arbitration Law as Amici Curiae 6.
Moreover, Argentina’s conduct confirms that the local
litigation requirement is not a condition on consent, for
rather than objecting to arbitration on the ground that
there was no binding arbitration agreement to begin with,
Argentina actively participated in the constitution of the
arbitral panel and in the proceedings that followed. See
Eastern Airlines, Inc. v. Floyd, 499 U. S. 530, 546 (1991)
(treaty interpretation can be informed by parties’ posten-
actment conduct).*
In light of these many indicators that Argentina and the
United Kingdom did not intend the local litigation re-
quirement to be a condition on their consent to arbitrate,
and on the understanding that the Court does not pass on
——————
*The dissent discounts the significance of Argentina’s conduct on the
ground that Argentina “object[ed] to the [arbitral] tribunal’s jurisdic-
tion to hear the dispute.” Post, at 16, n. 2. But there is a difference
between arguing that a party has failed to comply with a procedural
condition in a binding arbitration agreement and arguing that noncom-
pliance with the condition negates the existence of consent to arbitrate
in the first place. Argentina points to no evidence that its objection was
of the consent variety. This omission is notable because Argentina
knew how to phrase its arguments before the arbitrators in terms of
consent; it argued separately that it had not consented to arbitration
with BG Group on the ground that BG was not a party to the license
underlying the dispute. See App. to Pet. for Cert. 182a–186a. First
Options of Chicago, Inc. v. Kaplan, 514 U. S. 938 (1995), is not to the
contrary, as that case held that “arguing the arbitrability issue to an
arbitrator” did not constitute “clea[r] and unmistakabl[e]” evidence
sufficient to override an indisputably applicable presumption that a
court was to decide whether the parties had agreed to arbitration. Id.,
at 944, 946. The question here, by contrast, is whether that presump-
tion attaches to begin with—that is, whether the local litigation re-
quirement was a condition on Argentina’s consent to arbitrate (which
would trigger the presumption) or a procedural condition in an already
binding arbitration agreement (which would not). That Argentina ap-
parently took the latter position in arbitration is surely relevant evi-
dence that the condition was, in fact, not one on its consent.
377
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the weight courts should attach to a treaty’s use of the

term “consent,” I concur in the Court’s opinion.
378
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ROBERTS, C. J., dissenting

_________________
No. 12–138
_________________
ARGENTINA
[March 5, 2014]
CHIEF JUSTICE ROBERTS, with whom JUSTICE KENNEDY

joins, dissenting.
The Court begins by deciding a different case, “initially
treat[ing] the document before us as if it were an ordinary
contract between private parties.” Ante, at 6. The “docu
ment before us,” of course, is nothing of the sort. It is
instead a treaty between two sovereign nations: the United
Kingdom and Argentina. No investor is a party to the
agreement. Having elided this rather important fact for
much of its analysis, the majority finally “relax[es] [its]
ordinary contract assumption and ask[s] whether the fact
that the document before us is a treaty makes a critical
difference to [its] analysis.” Ante, at 10. It should come as
no surprise that, after starting down the wrong road, the
majority ends up at the wrong place.
I would start with the document that is before us and
take it on its own terms. That document is a bilateral
investment treaty between the United Kingdom and Ar
gentina, in which Argentina agreed to take steps to en
courage U. K. investors to invest within its borders (and
the United Kingdom agreed to do the same with respect to
Argentine investors). Agreement for the Promotion and
Protection of Investments, Dec. 11, 1990, 1765 U. N. T. S.
33 (Treaty). The Treaty does indeed contain a completed
agreement for arbitration—between the signatory coun
379
tries. Art. 9. The Treaty also includes, in Article 8, cer

tain provisions for resolving any disputes that might arise
between a signatory country and an investor, who is not a
party to the agreement.
One such provision—completely ignored by the Court in
its analysis—specifies that disputes may be resolved by
arbitration when the host country and an investor “have
so agreed.” Art. 8(2)(b), 1765 U. N. T. S. 38. No one
doubts that, as is the normal rule, whether there was such
an agreement is for a court, not an arbitrator, to decide.
See First Options of Chicago, Inc. v. Kaplan, 514 U. S. 938,
943–945 (1995).
When there is no express agreement between the host
country and an investor, they must form an agreement in
another way, before an obligation to arbitrate arises. The
Treaty by itself cannot constitute an agreement to arbi
trate with an investor. How could it? No investor is a
party to that Treaty. Something else must happen to
create an agreement where there was none before. Article
8(2)(a) makes clear what that something is: An investor
must submit his dispute to the courts of the host country.
After 18 months, or an unsatisfactory decision, the inves
tor may then request arbitration.
Submitting the dispute to the courts is thus a condition
to the formation of an agreement, not simply a matter of
performing an existing agreement. Article 8(2)(a) consti
tutes in effect a unilateral offer to arbitrate, which an
investor may accept by complying with its terms. To be
sure, the local litigation requirement might not be abso
lute. In particular, an investor might argue that it was an
implicit aspect of the unilateral offer that he be afforded a
reasonable opportunity to submit his dispute to the local
courts. Even then, however, the question would remain
whether the investor has managed to form an arbitration
agreement with the host country pursuant to Article
8(2)(a). That question under Article 8(2)(a) is—like the
380
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same question under Article 8(2)(b)—for a court, not an

arbitrator, to decide. I respectfully dissent from the
Court’s contrary conclusion.
I
The majority acknowledges—but fails to heed—“the first
principle that underscores all of our arbitration decisions:
Arbitration is strictly ‘a matter of consent.’ ” Granite Rock
Co. v. Teamsters, 561 U. S. 287, 299 (2010) (quoting Volt
Information Sciences, Inc. v. Board of Trustees of Leland
Stanford Junior Univ., 489 U. S. 468, 479 (1989)); see
ante, at 7. We have accordingly held that arbitration “is a
way to resolve those disputes—but only those disputes—
that the parties have agreed to submit to arbitration.”
First Options of Chicago, Inc., supra, at 943. The same
“first principle” underlies arbitration pursuant to bilateral
investment treaties. See C. Dugan, D. Wallace, N. Rubins,
& B. Sabahi, Investor-State Arbitration 219 (2008)
(Dugan); J. Salacuse, The Law of Investment Treaties 385
(2010); K. Vandevelde, Bilateral Investment Treaties:
History, Policy, and Interpretation 433 (2010). So only if
Argentina agreed with BG Group to have an arbitrator
resolve their dispute did the arbitrator in this case have
any authority over the parties.
The majority opinion nowhere explains when and how
Argentina agreed with BG Group to submit to arbitration.
Instead, the majority seems to assume that, in agreeing
with the United Kingdom to adopt Article 8 along with the
rest of the Treaty, Argentina thereby formed an agree
ment with all potential U. K. investors (including BG
Group) to submit all investment-related disputes to arbi
tration. That misunderstands Article 8 and trivializes the
significance to a sovereign nation of subjecting itself to
arbitration anywhere in the world, solely at the option of
private parties.
381
A
The majority focuses throughout its opinion on what it
calls the Treaty’s “arbitration clause,” ante, at 1, but that
provision does not stand alone. Rather, it is only part—
and a subordinate part at that—of a broader dispute
resolution provision. Article 8 is thus entitled “Settlement
of Disputes Between an Investor and the Host State,” and
it opens without so much as mentioning arbitration. 1765
U. N. T. S. 37. Instead it initially directs any disputing
investor and signatory country (what the Treaty calls a
“Contracting Party”) to court. When “an investor of one
Contracting Party and the other Contracting Party” have
an investment-related dispute that has “not been amicably
settled,” the Treaty commands that the dispute “shall be
submitted, at the request of one of the Parties to the dis
pute, to the decision of the competent tribunal of the
Contracting Party in whose territory the investment was
made.” Art. 8(1), id., at 37–38. (emphasis added). This
provision could not be clearer: Before taking any other
steps, an aggrieved investor must submit its dispute with
a Contracting Party to that Contracting Party’s own
courts.
There are two routes to arbitration in Article 8(2)(a),
and each passes through a Contracting Party’s domestic
courts. That is, the Treaty’s arbitration provisions in
Article 8(2)(a) presuppose that the parties have complied
with the local litigation provision in Article 8(1). Specifi
cally, a party may request arbitration only (1) “after a
period of eighteen months has elapsed from the moment
when the dispute was submitted to the competent tribunal
of the Contracting Party in whose territory the investment
was made” and “the said tribunal has not given its final
decision,” Art. 8(2)(a)(i), id., at 38, or (2) “where the final
decision of the aforementioned tribunal has been made but
the Parties are still in dispute,” Art. 8(2)(a)(ii), ibid. Ei
ther way, the obligation to arbitrate does not arise until
382
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the Contracting Party’s courts have had a first crack at

the dispute.
Article 8 provides a third route to arbitration in para
graph 8(2)(b)—namely, “where the Contracting Party and
the investor of the other Contracting Party have so
agreed.” Ibid. In contrast to the two routes in Article
8(2)(a), this one does not refer to the local litigation provi
sion. That omission is significant. It makes clear that an
investor can bypass local litigation only by obtaining the
Contracting Party’s explicit agreement to proceed directly
to arbitration. Short of that, an investor has no choice but
to litigate in the Contracting Party’s courts for at least
some period.
The structure of Article 8 confirms that the routes to
arbitration in paragraph (2)(a) are just as much about
eliciting a Contracting Party’s consent to arbitrate as the
route in paragraph 8(2)(b). Under Article 8(2)(b), the
requisite consent is demonstrated by a specific agreement.
Under Article 8(2)(a), the requisite consent is demonstrated
by compliance with the requirement to resort to a coun
try’s local courts.
Whereas Article 8(2)(a) is part of a completed agreement
between Argentina and the United Kingdom, it constitutes
only a unilateral standing offer by Argentina with respect
to U. K. investors—an offer to submit to arbitration where
certain conditions are met. That is how scholars under
stand arbitration provisions in bilateral investment trea
ties in general. See Dugan 221; Salacuse 381; Brief for
Practitioners and Professors of International Arbitration
Law as Amici Curiae 4. And it is how BG Group itself
describes this investment treaty in particular. See Brief
for Petitioner 43 (the Treaty is a “standing offer” by Ar
gentina “to arbitrate”); Reply Brief 9 (same).
An offer must be accepted for a legally binding contract
to be formed. And it is an “undeniable principle of the law
of contracts, that an offer . . . by one person to another,
383
imposes no obligation upon the former, until it is accepted

by the latter, according to the terms in which the offer
was made. Any qualification of, or departure from, those
terms, invalidates the offer.” Eliason v. Henshaw, 4
Wheat. 225, 228 (1819) (emphasis added). This principle
applies to international arbitration agreements just as it
does to domestic commercial contracts. See Dugan 221–
222; Salacuse 381; Schreuer, Consent to Arbitration, in
The Oxford Handbook of International Investment Law
830, 836–837 (P. Muchlinski, F. Ortino, & C. Schreuer eds.
2008).
By incorporating the local litigation provision in Article
8(1), paragraph 8(2)(a) establishes that provision as a
term of Argentina’s unilateral offer to arbitrate. To accept
Argentina’s offer, an investor must therefore first litigate
its dispute in Argentina’s courts—either to a “final deci
sion” or for 18 months, whichever comes first. Unless the
investor does so (or, perhaps, establishes a valid excuse for
failing to do so, as discussed below, see infra, at 17), it has
not accepted the terms of Argentina’s offer to arbitrate,
and thus has not formed an arbitration agreement with
Argentina.1
Although the majority suggests that the local litigation
requirement would not be a “condition of consent” even if
the Treaty explicitly called it one, the Court’s holding is
limited to treaties that contain no such clear statement.
See ante, at 11–13. But there is no reason to think that
such a clear statement should be required, for we generally
do not require “talismanic words” in treaties. Medellín
v. Texas, 552 U. S. 491, 521 (2008). Indeed, another arbi-
tral tribunal concluded that the local litigation require
——————
1 To
be clear, the only question is whether BG Group formed an arbi
tration agreement with Argentina. To say that BG Group never formed
such an agreement is not to call into question the validity of its various
commercial agreements with Argentina.
384
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ment was a condition on Argentina’s consent to arbitrate

despite the absence of the sort of clear statement appar
ently contemplated by the majority. See ICS Inspection &
Control Servs. Ltd. v. Argentine Republic, PCA Case No.
2010–9, Award on Jurisdiction, ¶262 (Feb. 10, 2012). Still
other tribunals have reached the same conclusion with
regard to similar litigation requirements in other Argen
tine bilateral investment treaties. See Daimler Financial
Servs. AG v. Argentine Republic, ICSID Case No. ARB/
05/1, Award, ¶¶193, 194 (Aug. 22, 2012); Wintershall
Aktiengesellschaft v. Argentine Republic, ICSID Case No.
ARB/04/14, Award, ¶116 (Dec. 8, 2008).
In the face of this authority, the majority quotes a trea
tise for the proposition that “ ‘[a] substantial body of arbi
tral authority from investor-state disputes concludes that
compliance with procedural mechanisms in an arbitration
agreement (or bilateral investment treaty) is not ordinarily
a jurisdictional prerequisite.’ ” Ante, at 16 (quoting 1 G.
Born, International Commercial Arbitration 842 (2009)).
But that simply restates the question. The whole issue is
whether the local litigation requirement is a mere “proce
dural mechanism” or instead a condition on Argentina’s
consent to arbitrate.
BG Group concedes that other terms of Article 8(1)
constitute conditions on Argentina’s consent to arbitrate,
even though they are not expressly labeled as such. See
Tr. of Oral Arg. 57 (“You have to be a U. K. investor, you
have to have a treaty claim, you have to be suing another
party to the treaty. And if those aren’t true, then there is
no arbitration agreement” (emphasis added)). The Court
does not explain why the only other term—the litigation
requirement—should be viewed differently.
Nor does the majority’s reading accord with ordinary
contract law, which treats language such as the word
“after” in Article 8(2)(a)(i) as creating conditions, even
though such language may not constitute a “clear state
385
ment.” See 13 R. Lord, Williston on Contracts §38:16 (4th

ed. 2013). The majority seems to regard the local litiga
tion requirement as a condition precedent to performance
of the contract, rather than a condition precedent to for
mation of the contract. Ante, at 8–9; see 13 Lord §§38:4,
38:7. But that cannot be. Prior to the fulfillment of
the local litigation requirement, there was no contract be
tween Argentina and BG Group to be performed. The
Treaty is not such an agreement, since BG Group is of
course not a party to the Treaty. Neither the majority nor
BG Group contends that the agreement is under Article
8(2)(b), the provision that applies “where the Contracting
Party and the investor of the other Contracting Party have
so agreed.” An arbitration agreement must be formed, and
Article 8(2)(a) spells out how an investor may do that: by
submitting the dispute to local courts for 18 months or
until a decision is rendered.
Moreover, the Treaty’s local litigation requirement
certainly does not resemble “time limits, notice, laches,
estoppel,” or the other kinds of provisions that are typically
treated as conditions on the performance of an arbitra-
tion agreement, rather than prerequisites to formation.
Revised Uniform Arbitration Act of 2000 §6(c), Comment
2, 7 U. L. A. 26 (2009). Unlike a time limit for submitting
a claim to arbitration, see Howsam v. Dean Witter Rey
nolds, Inc., 537 U. S. 79, 85 (2002), the litigation require
ment does not simply regulate the timing of arbitration.
As the majority recognizes, ante, at 15–16, the provision
does not simply require the parties to wait for 18 months
before proceeding to arbitration, but instead requires them
to submit their claims for adjudication during that period.
And unlike a mandatory pre-arbitration grievance proce
dure, see John Wiley & Sons, Inc. v. Livingston, 376 U. S.
543, 556–559 (1964), the litigation requirement sends the
parties to court—and not just any court, but a court of the
host country.
386
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The law of international arbitration and domestic con

tract law lead to the same conclusion: Because paragraph
(2)(a) of Article 8 constitutes only a unilateral standing
offer by the Contracting Parties to each other’s investors
to submit to arbitration under certain conditions, an in
vestor cannot form an arbitration agreement with a Con
tracting Party under the Treaty until the investor accepts
the actual terms of the Contracting Party’s offer. Absent a
valid excuse, that means litigating its dispute in the Con
tracting Party’s courts to a “final decision” or, barring
that, for at least 18 months.
B
The nature of the obligations a sovereign incurs in
agreeing to arbitrate with a private party confirms that
the local litigation requirement is a condition on a signatory
country’s consent to arbitrate, and not merely a condi-
tion on performance of a pre-existing arbitration agree
ment. There are good reasons for any sovereign to condi
tion its consent to arbitrate disputes on investors’ first
litigating their claims in the country’s own courts for a
specified period. It is no trifling matter for a sovereign
nation to subject itself to suit by private parties; we do not
presume that any country—including our own—takes that
step lightly. Cf. United States v. Bormes, 568 U. S. ___,
___ (2012) (slip op., at 4) (Congress must “unequivocally
express[ ]” its intent to waive the sovereign immunity of
the United States (quoting United States v. Nordic Village,
Inc., 503 U. S. 30, 33 (1992); internal quotation marks
omitted)). But even where a sovereign nation has subjected
itself to suit in its own courts, it is quite another thing
for it to subject itself to international arbitration. Indeed,
“[g]ranting a private party the right to bring an action
against a sovereign state in an international tribunal
regarding an investment dispute is a revolutionary inno
vation” whose “uniqueness and power should not be over
387
looked.” Salacuse 137. That is so because of both the

procedure and substance of investor-state arbitration.
Procedurally, paragraph (3) of Article 8 designates the
Arbitration Rules of the United Nations Commission on
International Trade Law (UNCITRAL) as the default rules
governing the arbitration. Those rules authorize the
Secretary-General of the Permanent Court of Arbitration
at The Hague to designate an “appointing authority”
who—absent agreement by the parties—can select the sole
arbitrator (or, in the case of a three-member tribunal, the
presiding arbitrator, where the arbitrators nominated by
each of the parties cannot agree on a presiding arbitrator).
UNCITRAL Arbitration Rules, Arts. 6, 8–9 (rev. 2010 ed.).
The arbitrators, in turn, select the site of the arbitration
(again, absent an agreement by the parties) and enjoy
broad discretion in conducting the proceedings. Arts. 18,
17(1).
Substantively, by acquiescing to arbitration, a state
permits private adjudicators to review its public policies
and effectively annul the authoritative acts of its legisla
ture, executive, and judiciary. See Salacuse 355; G. Van
Harten, Investment Treaty Arbitration and Public Law
65–67 (2007). Consider the dispute that gave rise to this
case: Before the arbitral tribunal, BG Group challenged
multiple sovereign acts of the Argentine Government
taken after the Argentine economy collapsed in 2001—in
particular, Emergency Law 25,561, which converted dollar
denominated tariffs into peso-denominated tariffs at a
rate of one Argentine peso to one U. S. dollar; Resolution
308/02 and Decree 1090/02, which established a renegotia
tion process for public service contracts; and Decree
214/02, which stayed for 180 days injunctions and the
execution of final judgments in lawsuits challenging the
effects of the Emergency Law. Indeed, in awarding dam
ages to BG Group, the tribunal held that the first three of
these enactments violated Article 2 of the Treaty. See
388
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App. to Pet. for Cert. 241a–242a, 305a.

Perhaps they did, but that is not the issue. Under
Article 8, a Contracting Party grants to private adjudica
tors not necessarily of its own choosing, who can meet
literally anywhere in the world, a power it typically re
serves to its own courts, if it grants it at all: the power to
sit in judgment on its sovereign acts. Given these stakes,
one would expect the United Kingdom and Argentina to
have taken particular care in specifying the limited cir
cumstances in which foreign investors can trigger the
Treaty’s arbitration process. And that is precisely what
they did in Article 8(2)(a), requiring investors to afford a
country’s own courts an initial opportunity to review the
country’s enactments and assess the country’s compliance
with its international obligations. Contrast this with
Article 9, which provides for arbitration between the
signatory countries of disputes under the Treaty without
any preconditions. Argentina and the United Kingdom
considered arbitration with particular foreign investors to
be different in kind and to require special limitations on
its use.
The majority regards the local litigation requirement as
toothless simply because the Treaty does not require an
arbitrator to “give substantive weight to the local court’s
determinations on the matters at issue between the par
ties,” ante, at 9; see also ante, at 15–16, but instead pro
vides that “[t]he arbitration decision shall be final and
binding on both Parties,” Art. 8(4), 1765 U. N. T. S. 38.
While it is true that an arbitrator need not defer to an
Argentine court’s judgment in an investor dispute, that
does not deprive the litigation requirement of practical
import. Most significant, the Treaty provides that an
“arbitral tribunal shall decide the dispute in accordance
with . . . the laws of the Contracting Party involved in the
dispute.” Art. 8(4), ibid. I doubt that a tribunal would
give no weight to an Argentine court’s authoritative con
389
struction of Argentine law, rendered in the same dispute,

just because it might not be formally bound to adopt that
interpretation.
The local litigation requirement can also help to narrow
the range of issues that remain in controversy by the time
a dispute reaches arbitration. It might even induce the
parties to settle along the way. And of course the investor
might prevail, which could likewise obviate the need for
arbitration. Cf. McKart v. United States, 395 U. S. 185,
195 (1969).
None of this should be interpreted as defending Argen
tina’s history when it comes to international investment.
That history may prompt doubt that requiring an investor
to resort to that country’s courts in the first instance will
be of any use. But that is not the question. Argentina and
the United Kingdom reached agreement on the term at
issue. The question can therefore be rephrased as whether
it makes sense for either Contracting Party to insist on
resort to its courts before being compelled to arbitrate
anywhere in the world before arbitrators not of its choos
ing. The foregoing reasons may seem more compelling
when viewed apart from the particular episode before us.
II
Given that the Treaty’s local litigation requirement is a
condition on consent to arbitrate, it follows that whether
an investor has complied with that requirement is a ques
tion a court must decide de novo, rather than an issue for
the arbitrator to decide subject only to the most deferen
tial judicial review. See, e.g., Adams v. Suozzi, 433 F. 3d
220, 226–228 (CA2 2005) (holding that compliance with a
condition on formation of an arbitration agreement is for a
court, rather than an arbitrator, to determine). The logic
is simple: Because an arbitrator’s authority depends on
the consent of the parties, the arbitrator should not as a
rule be able to decide for himself whether the parties have
390
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in fact consented. Where the consent of the parties is in

question, “reference of the gateway dispute to the court
avoids the risk of forcing parties to arbitrate a matter that
they may well not have agreed to arbitrate.” Howsam, 537
U. S., at 83–84.
This principle is at the core of our arbitration prece
dents. See Granite Rock Co., 561 U. S., at 299 (questions
concerning “the formation of the parties’ arbitration
agreement” are for a court to decide de novo). The same
principle is also embedded in the law of international
commercial arbitration. 2 Born 2792 (“[W]here one party
denies ever having made an arbitration agreement or
challenges the validity of any such agreement, . . . the
possibility of de novo judicial review of any jurisdictional
award in an annulment action is logically necessary”). See
also Restatement (Third) of U. S. Law of International
Commercial Arbitration §4–12(d)(1) (Tent. Draft No. 2,
Apr. 16, 2012) (“a court determines de novo . . . the exist
ence of the arbitration agreement”).
Indeed, the question in this case—whether BG Group
accepted the terms of Argentina’s offer to arbitrate—
presents an issue of contract formation, which is the
starkest form of the question whether the parties have
agreed to arbitrate. In Howsam v. Dean Witter Reynolds,
Inc., we gave two examples of questions going to consent,
which are for courts to decide: “whether the parties are
bound by a given arbitration clause” and “whether an
arbitration clause in a concededly binding contract applies
to a particular type of controversy.” 537 U. S., at 84. In
both examples, there is at least a putative arbitration
agreement between the parties to the dispute. The only
question is whether the agreement is truly binding or
whether it covers the specific dispute. Here, by contrast,
the question is whether the arbitration clause in the Treaty
between the United Kingdom and Argentina gives rise
to an arbitration agreement between Argentina and BG
391
Group at all. Cf. ante, at 2 (SOTOMAYOR, J., concurring in

part) (“Consent is especially salient in the context of a
bilateral investment treaty, where the treaty is not an
already agreed-upon arbitration provision between known
parties”).
The majority never even starts down this path. Instead,
it preempts the whole inquiry by concluding that the local
litigation requirement is the kind of “procedural precondi
tion” that parties typically expect an arbitrator to enforce.
Ante, at 8–9. But as explained, the local litigation re
quirement does not resemble the requirements we have
previously deemed presumptively procedural. See supra,
at 8. It does not merely regulate the timing of arbitration.
Nor does it send the parties to non-judicial forms of dis
pute resolution.
More importantly, all of the cases cited by the majority
as examples of procedural provisions involve commercial
contracts between two private parties. See ante, at 9.
None of them—not a single one—involves an agreement
between sovereigns or an agreement to which the person
seeking to compel arbitration is not even a party. The
Treaty, of course, is both of those things.
The majority suggests that I am applying “a different
kind of analysis” from that governing private commercial
contracts, just because what is at issue is a treaty. Ante,
at 15. That is not so: The key point, which the majority
never addresses, is that there is no completed agreement
whatsoever between Argentina and BG Group. An agree
ment must be formed, and whether that has happened
is—as it is in the private commercial contract context—an
issue for a court to decide. See supra, at 12–13.
The distinction between questions concerning consent to
arbitrate and mere procedural requirements under an
existing arbitration agreement can at times seem elusive.
Even the most mundane procedural requirement can be
recast as a condition on consent as a matter of technical
392
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logic. But it should be clear by now that the Treaty’s local

litigation requirement is not a mere formality—not in
Buenos Aires, not in London. And while it is true that
“parties often submit important matters to arbitration,”
ante, at 11, our precedents presume that parties do not
submit to arbitration the most important matter of all:
whether they are subject to an agreement to arbitrate in
the first place.
Nor has the majority pointed to evidence that would
rebut this presumption by showing that Argentina “ ‘clearly
and unmistakably’ ” intended to have an arbitrator en
force the litigation requirement. Howsam, supra, at 83
(quoting AT&T Technologies, Inc. v. Communications
Workers, 475 U. S. 643, 649 (1986)). As the majority
notes, ante, at 14, the Treaty incorporates certain arbitra
tion rules that, in turn, authorize arbitrators to determine
their own jurisdiction over a dispute. See Art. 8(3). But
those rules do not operate until a dispute is properly
before an arbitral tribunal, and of course the whole ques
tion in this case is whether the dispute between BG Group
and Argentina was before the arbitrators, given BG
Group’s failure to comply with the 18-month local litiga
tion requirement. As a leading treatise has explained, “[i]f
the parties have not validly agreed to any arbitration
agreement at all, then they also have necessarily not
agreed to institutional arbitration rules.” 1 Born 870. “In
these circumstances, provisions in institutional rules
cannot confer any [such] authority upon an arbitral tribu
nal.” Ibid.
I also see no reason to think that arbitrators enjoy
comparative expertise in construing the local litigation
requirement. Ante, at 14. It would be one thing if that
provision involved the application of the arbitrators’ own
rules, cf. Howsam, supra, at 85, or if it were “intertwined”
with the merits of the underlying dispute, John Wiley &
Sons, 376 U. S., at 557. Neither is true of the litigation
393
requirement. A court can assess compliance with the

requirement at least as well as an arbitrator can. Given
the structure of Article 8 and the important interests that
the litigation requirement protects, it seems clear that the
United Kingdom and Argentina thought the same.2
III
Although the Court of Appeals got there by a slightly
different route, it correctly concluded that a court must
decide questions concerning the interpretation and appli
cation of the local litigation requirement de novo. 665
F. 3d 1363, 1371–1373 (CADC 2012). At the same time,
however, the court seems to have simply taken it for
granted that, because BG Group did not submit its dispute
to the local courts, the arbitral award in BG Group’s favor
was invalid. Indeed, the court addressed the issue in a
perfunctory paragraph at the end of its opinion and saw
“ ‘only one possible outcome’ ”: “that BG Group was re
quired to commence a lawsuit in Argentina’s courts and
——————
2 JUSTICE SOTOMAYOR contends that “Argentina’s conduct confirms
that the local litigation requirement is not a condition on consent, for

rather than objecting to arbitration on the ground that there was no
binding arbitration agreement to begin with, Argentina actively partic
ipated in the constitution of the arbitral panel and in the proceedings
that followed.” Ante, at 4 (opinion concurring in part). But as the
arbitral tribunal itself recognized, Argentina did object to the tribunal’s
jurisdiction to hear the dispute. App. to Pet. for Cert. 99a, 134a, 143a,
161a–163a. And we have held that “merely arguing the arbitrability
issue to an arbitrator”—say, by “filing with the arbitrators a written
memorandum objecting to the arbitrators’ jurisdiction”—“does not
indicate a clear willingness to arbitrate that issue, i.e., a willingness to
be effectively bound by the arbitrator’s decision on that point.” First
Options of Chicago, Inc. v. Kaplan, 514 U. S. 938, 946 (1995). The
concurrence contends that Argentina “apparently” argued its jurisdic
tional objection in terms of procedure rather than consent, ante, at 4, n.,
but the one piece of evidence cited—a negative inference from the
arbitrator’s characterization of Argentina’s argument on a subsidiary
issue—hardly suffices to distinguish First Options.
394
Cite as: 572 U. S. ____ (2014) 17
wait eighteen months before filing for arbitration.” Id.,

at 1373 (quoting Stolt-Nielsen S. A. v. AnimalFeeds Int’l
Corp., 559 U. S. 662, 677 (2010)).
That conclusion is not obvious. A leading treatise has
indicated that “[i]t is a necessary implication from [a uni
lateral] offer that the offeror, in addition, makes a sub
sidiary offer by which he or she promises to accept a
tender of performance.” 1 Lord §5:14, at 1005. On this
understanding, an offeree’s failure to comply with an
essential condition of the unilateral offer “will not bar an
action, if failure to comply with the condition is due to the
offeror’s own fault.” Id., at 1005–1006.
It would be open to BG Group to argue before the Court
of Appeals that this principle was incorporated into Article
8(2)(a) as an implicit aspect of Argentina’s unilateral offer
to arbitrate. Such an argument would find some support
in the background principle of customary international
law that a foreign individual injured by a host country
must ordinarily exhaust local remedies—unless doing so
would be “futile.” See Dugan 347–357. In any event, the
issue would be analyzed as one of contract formation, and
therefore would be for the court to decide. I would accord
ingly vacate the decision of the Court of Appeals and
remand the case for such an inquiry.
I respectfully dissent.
395
WEEK 6: INTERIM MEASURES
February 21, 2023
Relevant Rules
1. ICC: Articles 28-29, Appendix V (Emergency Arbitrator Rules)
2. UNCITRAL Rules: Article 26
3. UNCITRAL Model Law: Articles 9, 17
4. ICDR: Articles 21, 27(7), 31(e), 37
5. SIAC: Rule 26, Schedule 1 (Emergency Arbitrator)
6. ICSID, Arbitration (Additional Facility) Rules: Rule 39
7. LCIA: Article 25
8. HKIAC: Article 23, Schedule 4 (Emergency Arbitrator Procedure)
9. MIAC: Article 25
10. KIAC: Article 33-34, Annex II (Emergency Arbitrator Rules)
11. SCC: Article 32, Appendix II (Emergency Arbitrator)
Required Reading
Gary Born, Provisional Measures in International Arbitration, in INTERNATIONAL
1. COMMERCIAL ARBITRATION (2009) Recommended Excerpt(s): pg. 1943-47; 1952-56;
1966-68; 1980-93; 2019-23; 2028-2030.
2. C. Mouawad and E. Silbert, “A Guide to Interim Measures in Investor-State Arbitration,”
Arbitration International (2013). Excerpt: 400-416
Hydro S.r.l. v. Republic of Albania, ICSID Case No. ARB/15/28, Decision on Claimants’
3. Request for a Partial Award and Respondent’s Application for Revocation or
Modification of the Order on Provisional Measures, 1 September 2016.
ICC Commission Report: Emergency Arbitrator Proceedings:

Section I.B: Summary of Key Conclusions
Section III.C: Procedural matters
4. Section III.D: Substantive Standards
Available at:
https://iccwbo.org/content/uploads/sites/3/2019/03/icc-arbitration-adr-commission-report-
onemergency-arbitrator-proceedings.pdf
Provisional Measures in International

Arbitration
Chapter 16
Author
Gary B. Born
Gary B. Born
Jurisdiction
(1)
Provisional Measures in International Arbitration
Source
This Chapter addresses the subject of provisional or interim
measures of protection and conservation ( provisional measures ), Provisional Measures
designed to protect parties or property page "1941" during the in International
pendency of international arbitral proceedings. The Chapter first Arbitration in Gary B.
discusses the extent to which international arbitral tribunals are Born , International
authorized to grant provisional relief and the circumstances in which Commercial Arbitration,
they will be willing to do so. Second, the Chapter addresses the (Kluwer Law
enforceability in national courts of provisional measures ordered by International 2009) pp.
international arbitral tribunals. Finally, the Chapter considers when 1941 - 1942
national courts may grant provisional relief in aid of an international
arbitration (whether concurrently with arbitral tribunals or
independently).
page "1942"
1
For commentary, see Becker, Attachments in Aid of International
Arbitration The American Position, 1 Arb. Int'l 40 (1985); S.
Besson, Arbitrage international et mesures provisoires (1998);
Brody, An Argument for Pre-Award Attachment in International
Arbitration under the New York Convention, 18 Cornell Int'l L.J. 99
(1985); Brower & Goodman, Provisional Measures and the
Protection of ICSID Jurisdictional Exclusivity Against Municipal
Proceedings, 6 ICSID Rev.-For. Inv. L.J. 431, 452 (Spring 1991);
Brower & Tupman, Court-Ordered Provisional Measures under the
New York Convention, 80 Am. J. Int'l L. 24 (1986); Caron, Interim
Measures of Protection: Theory and Practice in Light of the Iran-
United States Claims Tribunal, 46 Zeitschrift für ausländisches
öffentliches Recht und Völkerrecht 465 (1986); Castello, Arbitral Ex
Parte Interim Relief: The View in Favor, 58 Dispute Res. J. 60
(2003); Collins, Provisional and Protective Measures in International
Litigation, 234 Recueil des Cours 9 (1992); Derains, The View
Against Arbitral Ex Parte Interim Relief, 58 Dispute Res. J. 61
(2003); Donovan, Powers of the Arbitrators to Issue Procedural
Orders, Including Interim Measures of Protection, and the
Obligations of Parties to Abide by Such Orders, 10(1) ICC Ct. Bull.
423
1
http://www.kluwerarbitration.com/print.aspx?ids=ipn31430 7/31/2013
57 (1999); E. Dumbauld, Interim Measures of Protection in

International Controversies (1932); Ebb, Flight of Assets From the
Jurisdiction In the Twinkling of A Telex : Pre- and Post-Award
Conservatory Relief in International Commercial Arbitration, 7(1) J.
Int'l Arb. 9 (1990); J. Elking, Interim Protection: A Functional
Approach (1981); Foster & Elsberg, Two New Initiatives for
Provisional Remedies in International Arbitration: Article 17 of the
UNCITRAL Model Law on International Commercial Arbitration and
Article 37 of the AAA/ICDR International Dispute Resolution
Principles, 3(5) Transnat'l Dispute Mgt (2006); Friedland, Provisional
Measures and ICSID Arbitration, 2 Arb. Int'l 335 (1986); Fry, Interim
Measures of Protection: Recent Developments and the Way Ahead,
2003 Int'l Arb. L. Rev. 153; Gaitis, The Federal Arbitration Act: Risks
and Incongruities Relating to the Issuance of Interim and Partial
Awards in Domestic and International Arbitrations, 16 Am. Rev. Int'l
Arb. 1 (2005); Hausmaninger, The ICC Rules for A Pre-Arbitral
Referee Procedure: A Step Towards Solving the Problem of
Provisional Relief in International Commercial Arbitration, 7 ICSID
Rev.-For. Inv. L.J. 82 (1992); Hoellering, The Practices and
Experience of the American Arbitration Association, in ICC,
Conservatory and Provisional Measures in International Arbitration
31 (1993); Hoellering, Interim Measures and Arbitration: The
Situation in the United States, 46 Arb. J. 22 (1991); Hoellering,
Interim Relief in Aid of Commercial Arbitration, 1 Wisc. Int'l L.J. 1
(1984); D. Shenton & W. Kühn, Interim Court Remedies in Support
of Arbitration (1987); Huntley, The Scope of Article 17: Interim
Measures under the UNCITRAL Model Law, 740 PLI/Lit. 1181
(2005); ICC, Conservatory and Provisional Measures in International
Arbitration (1993); Jarvin, Is Exclusion of Concurrent
Courts Jurisdiction Over Conservatory Measures to Be Introduced
by A Revision of the Convention?, 6(1) J. Int'l Arb. 171 (1989);
Karmel, Injunctions Pending Arbitration and the Federal Arbitration
Act: A Perspective From Contract Law, 54 U. Chi. L. Rev. 1373
(1987); Kojovic, Court Enforcement of Arbitral Decisions on
Provisional Relief, 18 J. Int'l Arb. 511 (2001); Lew, Commentary on
Interim and Conservatory Measures in ICC Arbitration Cases, 11(1)
ICC Ct. Bull. 23 (2000); MacDonald, Interim Measures in
International Law, With Special Reference to the European System
for the Protection of Human Rights, 52 Zeitschrift für ausländisches
öffentliches Recht und Völkerrecht 703 (1992); Marchac, Interim
Measures in International Commercial Arbitration under the ICC,
AAA, LCIA and UNCITRAL Rules, 10 Am. Rev. Int'l Arb. 123 (2000);
McDonnell, The Availability of Provisional Relief in International
Commercial Arbitration, 22 Colum. J. Transnat'l L. 273 (1983-1984);
Mills, State International Arbitration Statutes and the U.S. Arbitration
Act: Unifying the Availability of Interim Relief, 13 Ford. Int'l L.J. 604
(1989); Naimark & Keer, Analysis of UNCITRAL Questionnaires on
Interim Relief, Global Center for Dispute Resolution Research
(March 2001), in C. Drahozal & R. Naimark, Towards a Science of
International Arbitration: Collected Empirical Research 129 (2005);
Pew & Jarvis, Pre-Award Attachment in International Arbitration: The
Law in New York, 7(3) J. Int'l Arb. 31 (1990); Rau, Provisional Relief
in Arbitration: How Things Stand in the United States, 22 J. Int'l Arb.
1 (2005); Redfern, Arbitration and the Courts: Interim Measures of
Protection - Is the Tide About to Turn ?, 30 Tex. Int'l L.J. 72 (1995);
Reichert, Provisional Remedies in the Context of International
Commercial Arbitration, 3 Int'l Tax & Bus. Law. 368 (1986); Reiner,
424
2
Les mesures provisoires et conservatoires et l'arbitrage

international, notamment l'arbitrage CCI, 125 J.D.I. (Clunet) 853
(1998); Reymond, Security for Costs in International Arbitration, 110
L. Q. Rev. 501 (1994); Rubins, In God We Trust, All Others Pay
Cash: Security for Costs in InternationalCommercial Arbitration, 11
Am. Rev. Int'l Arb. 306 (2000); Schaefer, New Solutions for Interim
Measures of Protection in International Commercial Arbitration:
English, German and Hong Kong Law Compared, 2.2 E.J.C.L.
(1998), available at www.ejcl.org; Schreuer, Non-Pecuniary
Remedies in ICSID Arbitration, 20 Arb. Int'l 325, (2004); Stalev,
Interim Measures of Protection in the Context of Arbitration, in A.
van den Berg (ed.), International Arbitration in A Changing World
111 (ICCA Congress Series No. 6 1994); J. Sztucki, Interim
Measures in the Hague Court (1983); van Houtte, Ten Reasons
Against A Proposal for Ex Parte Interim Measures of Protection in
Arbitration, 20 Arb. Int'l 85 (2004); Wirth, Interim or Preventive
Measures in Support of International Arbitration in Switzerland, 18
ASA Bull. 31 (2000); Yesilirmak, Interim and Conservatory
Measures in ICC Arbitral Practice, 11(1) ICC Ct. Bull. 31 (2000).

KluwerArbitration is made available for personal use only. All content is protected by copyright and
3
425

Arbitration - A. Introduction
Chapter 16
Author
Gary B. Born
Gary B. Born
Source
A. Introduction
Provisional Measures
in International
Contemporary litigation and arbitration in developed legal systems is Arbitration - A.
accompanied by procedural safeguards and opportunities for all Introduction in Gary B.
parties to be heard. One inevitable consequence of these procedural Born , International
protections is delay in the ultimate resolution of the parties' dispute; Commercial Arbitration,
in turn, this delay can prejudice one party, sometimes irreparably. (Kluwer Law
Classic examples include dissipation of assets, destruction of International 2009) pp.
evidence, loss of market value of property, disruption of a joint 1943 - 1945
venture's operations, disclosure or misuse of intellectual property
and interference with customer relations. These sorts of damage can
be exacerbated where one party seeks deliberately to take
advantage of or create delays in the dispute resolution procedures,
in order to improve its overall tactical or commercial position or exert
pressure on its adversary.
Given the foregoing, national legislatures and courts have developed

means for granting immediate provisional measures designed to
safeguard parties from serious injury caused by delays in the
litigation process. (2) These means for provisional measures rest on
a simple premise: in order for a dispute resolution process to
function in a fair and effective manner, it is essential that a tribunal
possess broad power to safeguard the parties' rights and its own
remedial authority during the pendency of the dispute resolution
proceedings. (3) Unless the tribunal is able to grant provisional
measures, its ability to provide effective, final relief may be
frustrated, one party may suffer grave damage, or the parties'
dispute may be unnecessarily exacerbated during the pendency of
the dispute resolution process.
Provisional measures have particular importance in international

disputes. Cases involving litigants from different nations pose special
risks, including the page "1943" increased danger that vital
evidence will be taken out of the reach of relevant tribunals or that
assets necessary to satisfy a judgment will be removed to a
jurisdiction where enforcement is unlikely.
426
www.kluwerarbitration.com/print.aspx?ids=ipn31431 1/4
4
Historically, there were significant limits on (or prohibitions against)

the power of arbitral tribunals to order provisional relief, (4) while
tribunals were reluctant to exercise those powers that they did
possess. (5) More recently, national law has removed many of the
historic limits on the powers of arbitrators to grant provisional
measures of protection, (6) while tribunals have demonstrated
increased willingness to make use of such powers. (7) These
developments have made provisional measures much more
important in contemporary international arbitration, both as a means
of protecting parties' legitimate interests and as tactical measures
aimed at exerting pressure on adverse parties.
Properly defined, “provisional measures” are awards or orders issued

for the purpose of protecting one or both parties to a dispute from
damage during the course of the arbitral process. Most often, as
discussed below, provisional measures are “intended to preserve a
factual or legal situation so as to safeguard rights the recognition of
which is sought from the [tribunal] having jurisdiction as to the
substance of the case.” (8) Additionally, as also discussed below,
provisional measures of protection can extend beyond merely
preserving the factual or legal status quo, to require restoring a
previous state of affairs or taking new actions. (9)
Provisional measures are variously referred to as “interim” or “pre-

award” relief or as “conservatory” or “protective” measures. (10)
These various terms are often used interchangeably or in
combination, without particular precision.
page "1944"
The foregoing terms are variously employed to refer to three related,

but separate, concepts: (a) “interim” and “provisional” decisions
sometimes denominate temporary rulings that are made prior to a
final award, where the relief granted is usually, but not necessarily,
designed to protect a party during the pendency of the proceedings,
and which are potentially subject to alteration or elimination in the
final award; (11) (b) on other occasions, “protective” or “conservatory”
measures refer to relief that is designed to protect or conserve
particular rights, regardless of whether it is granted in an interim or a
final award; (12) and (c) “partial” relief usually refers to measures
which are granted prior to a final award, but which finally resolve
some aspect of the parties' dispute (e.g., an award that finally
decides one or more individual claims and/or resolves one or more
issues). (13) As a practical matter, interim relief usually (but not
always) involves conservatory and/or protective measures, while
conservatory and protective measures are usually (but not always)
granted at an interim stage of proceedings (i.e., before a final
award); partial relief is by definition granted prior to a final award, and
is virtually never concerned with granting one party protection during
the arbitral proceedings, but instead is concerned with finally
resolving part of the dispute.
427
www.kluwerarbitration.com/print.aspx?ids=ipn31431 5 2/4
page "1945"
2 Collins, Provisional and Protective Measures in International

Litigation, 234 Recueil des Cours 9, 234 (1992) (“There can be no
doubt that the procedural power to grant provisional or protective
measures reflects a general principle of law, and that principle
nowadays is based on the need to prevent the judgment of the court
from being prejudiced or frustrated by actions of the parties. That
general principle of law is reflected in the practice of national courts,
administrative bodies, arbitral tribunals, and international courts.”).
3 It has long been recognized that arbitral tribunals in state-to-state
arbitrations possess the power to grant provisional relief. ILC,
Memorandum on Arbitral Procedure, Prepared by the Secretariat,
UN Doc. A/CN.4/35, II Y.B. I.L.C. 157, 167 (1950); ILC, Draft on
Arbitral Procedure Prepared by the International Law Commission at
its Fourth Session, 1952, UN Doc. A/CN.4/59 II Y.B. I.L.C. 60, 64,
Art. 17 (1952) (“The tribunal, or in the case of urgency its president
subject to confirmation by the tribunal, shall have power to
prescribe, if it considers that circumstances so require, any
protective measures to be taken for the protection of the respective
interests of the parties”); E. Dumbauld, Interim Measures of
Protection in International Controversies (1932); Application of the
Convention on the Prevention and Punishment of the Crime of
Genocide (Bosnia and Herzogovina v. Yugoslavia (Serbia and
Montenegro)), Provisional Measures, Order of 8 April 1993, 32 Int'l
Legal Mat. 888 (I.C.J.) (1993); Passage Through the Great Belt
(Finland v. Denmark ), Provisional Measures, Order of 29 July 1991,
31 Int'l Legal Mat. 107 (I.C.J.) (1992); Case Concerning the Vienna
Convention on Consular Relations (Germany v. USA), Provisional
Measures, Order of 3 March 1999, 40 Int'l Legal Mat. 1069 (2001)
(I.C.J.).
4 See infra pp. 1949-1951.
5 See infra pp. 1975-1978.
6 See infra pp.1951-1958.
7 See infra pp. 1975-1976.
8 Van Uden Maritime BV v. Kommanditgesellschaft in Firma Deco-
Line, C-391/95 [1998] E.C.R. I-7091, 7133 (E.C.J.). See also
Collins, Provisional and Protective Measures in International
Litigation, 234 Recueil des Cours 9, 19-24 (1992).
9 See infra pp. 1995-1999. The 2006 revisions to Article 17 of the
UNCITRAL Model Law define “interim measures” as follows: “An
interim measure is any temporary measure, whether in the form of
an award or in another form, by which, at any time prior to the
issuance of the award by which the dispute is finally decided, the
arbitral tribunal orders a party to: (a) Maintain or restore the status
quo pending determination of the dispute; (b) Take action that would
prevent, or refrain from taking action that is likely to cause, current
428
or imminent harm or prejudice to the arbitral process itself; (c)

Provide a means of preserving assets out of which a subsequent
award may be satisfied; or (d) Preserve evidence that may be
relevant and material to the resolution of the dispute.” UNCITRAL
Model Law, 2006 Revisions, Art. 17(2).
10 UNCITRAL Model Law, Art. 9 (“interim measures” and “interim
measure of protection”); Swiss Law on Private International Law, Art.
183 (“provisional or conservatory measures”); ICC Rules, Art. 23(2)
(“interim or conservatory measures”); LCIA Rules, Art. 25 (“interim
and conservatory measures”); ICSID Arbitration Rules, Rule 39
(“provisional measures for the preservation of [a party's] rights”).
11 Examples of provisional or interim decisions include grants of
interim protective measures aimed at preserving the status quo or
interim determinations (such as permitting a party to remain in
possession of property or to exercise contract rights) during the
pendency of a proceeding. See infra pp. 1994-2011.
12 Examples of “protective” measures include provisional or final
orders prohibiting a party from engaging in particular conduct (e.g.,
using intellectual property rights or other property).
13 The granting of “partial” relief is usually dealt with separately in
national arbitration statutes and institutional rules from the question
of provisional relief. The former is typically addressed in provisions
providing for partial awards (see, e.g., UNCITRAL Model Law, Art.
33; UNCITRAL Rules, Art. 32(1); ICC Rules, Art. 2(iii); LCIA Rules,
Art. 26(7)), rather than in separate provisions dealing with provisional
measures of protection. The subject of partial awards is discussed
below. See infra pp. 2430-2433.

7 429

Arbitration - B. Provisional Measures
Ordered by International Arbitral Tribunals
Chapter 16
Author
Gary B. Born
Gary B. Born
Source
B. Provisional Measures Ordered By International Arbitral
Tribunals Provisional Measures
in International
Arbitration - B.
Provisional measures in connection with an international arbitration Provisional Measures
are, in principle, available from either an arbitral tribunal or a national Ordered by
court. This section first considers the circumstances in which International Arbitral
arbitral tribunals are authorized – under the parties' arbitration Tribunals in Gary B.
agreement, any relevant institutional rules and applicable national Born , International
law – to grant provisional relief. (14) The section next discusses Commercial Arbitration,
whether and how an arbitrator will in practice exercise any power he (Kluwer Law
International 2009) pp.
or she may enjoy to order page "1945" provisional relief. (15)
1945 - 2019
Finally, the section considers when national courts will grant
provisional relief in aid of an international arbitration. (16)
1. Arbitrators' Authority to Order Provisional Relief
The threshold question for a party seeking pre-award relief is

whether the arbitral tribunal possesses the authority to order
provisional measures. (17) In general, that question requires
consulting three sources: (a) any applicable international arbitration
convention; (b) applicable national laws; and (c) the parties'
arbitration agreement, including any relevant institutional rules. As
detailed below, all of these sources show a continuing evolution,
away from historic limits on, or prohibitions against, tribunal-ordered
provisional measures and towards broad powers on the part of
arbitrators to grant effective provisional relief. (18)
a. Power of Arbitrators to Order Provisional Relief under

International Arbitration Conventions
For the most part, international arbitration conventions do not

430
expressly deal with the authority of arbitrators to order provisional

measures. Like the Geneva Protocol and Geneva Convention before
it, (19) the New York Convention contains nothing referring
specifically to awards of provisional measures by arbitrators or to the
power of arbitrators to make such orders; the Inter-American
Convention is the same. (20)
The European Convention does address the general subject of

provisional relief, but it only provides that “[a] request for interim
measures or measures of page "1946" conservation addressed
to a judicial authority shall not be deemed incompatible with the
arbitration agreement, or regarded as a submission of the substance
of the case to the court.” (21) This language permits parties to an
international arbitration agreement to seek provisional measures
from a national court without thereby waiving their rights to arbitrate
or violating their agreement to arbitrate. (22) Like the New York
Convention, however, the European Convention does not specifically
address whether or when an arbitral tribunal may itself grant
provisional measures, or the relationship between applications for
tribunal-ordered and court-ordered provisional measures.
Unlike the New York and European Conventions, the ICSID

Convention expressly recognizes at least limited power on the part
of ICSID arbitral tribunals to grant provisional relief. Article 47 of the
ICSID Convention provides that arbitral tribunals may “recommend”
that a party adhere to “any provisional measures which should be
taken to preserve the respective rights of either party.” (23) The
Convention thus, unusually, expressly recognized the power of
arbitral tribunals to consider and rule upon requests for provisional
relief; its reference to “recommendations” for provisional relief was
originally motivated by concerns about interfering with state
prerogatives and sovereignty, (24) but recent ICSID arbitral awards
have interpreted Article 47 as also permitting the ordering of binding
provisional measures. (25)
page "1947"
b. Effect of New York Convention on Power of Arbitrators to

Order Provisional Measures
Although the issue has not been expressly considered in any detail
by national courts or other authorities, the better view is that the
New York Convention impliedly precludes Contracting States from
adopting national laws that deny effect to international arbitration
agreements granting arbitrators the power to order provisional
measures. (26) As discussed above, Article II of the Convention
obliges Contracting States to recognize and give effect to the
material terms of agreements to arbitrate. (27) Where the parties'
arbitration agreement grants the arbitral tribunal the power to decide
requests for provisional relief, Article II in principle therefore requires
that the parties' agreement be upheld and forbids Contracting States
431
from simply denying effect to all such agreements. A Contracting

State that was the arbitral seat might seek to characterize requests
for provisional measures as non-arbitrable, but it is doubtful that
such a rule would comply with the Convention's general
requirements that non-arbitrability rules be exceptional escape
devices that are consistent with state practice among Contracting
States. (28)
The foregoing argument might be considered to be in tension with

historical legislation, extant in some countries when the New York
Convention was drafted, denying arbitrators the power to order
provisional measures. (29) Such legislation was nowhere expressly
said at the time to violate the Convention, as arguably would have
been the case had the Convention been intended to effect the status
of tribunal-ordered provisional relief.
On the other hand, as discussed elsewhere, (30) the Convention was

recognized as a “constitutional” instrument, which would inevitably
impose obligations on Contracting States to eliminate historic
national law rules restricting the efficacy of international arbitration
agreements. Given this, the better view is that the text and structure
of the New York Convention forbid Contracting States from simply
denying effect to all arbitration agreements empowering arbitrators to
grant page "1948" provisional measures. (31) It is conceivable
that a state might, consistent with the Convention, refuse to
recognize particular categories of agreements granting arbitrators
power to issue provisional measures, but it is very difficult to see
what the reasons for such a rule might be.
c. Power of Arbitrators to Order Provisional Relief under

National Arbitration Statutes
National arbitration legislation plays a significant role in the

availability of provisional relief from international arbitral tribunals. An
arbitrator will seldom grant provisional relief unless he or she is
satisfied that the law applicable to the arbitral proceedings (typically,
the arbitration legislation of the arbitral seat) (32) allows the tribunal
to do so. (33) Likewise, tribunal-ordered provisional relief will often
not be enforceable in a national court unless the law(s) governing the
arbitral proceedings permits such relief. (34)
i. Historic Prohibitions Against Tribunal-Ordered Provisional

Relief
Historically, national law not infrequently denied arbitrators the

power to order interim measures. (35) This was the case, for
example, in Switzerland, where the 1969 Cantonal Concordat
reserved the power to issue provisional relief to the Swiss courts
(although arbitrators were permitted to recommend interim relief).
(36) page "1949" Legislation in a number of other states,
432
including Austria, Italy, Spain and Greece, imposed similar

prohibitions against tribunal-granted provisional measures. (37)
The rationale for historic prohibitions against tribunal-ordered relief

appears to have been an application of the traditional precept that
arbitrators (in contrast to national courts) may not issue coercive
measures, coupled with the view that provisional relief is a coercive
measure. (38) This rationale was manifestly unsatisfactory.
An arbitral tribunal's issuance of provisional measures, by way of an

order or interim award directed at a party, was no more the exercise
of coercive powers than the making of a final award granting
injunctive relief. In each case, the tribunal's order or award directs a
party to do (or not to do) specified actions, but the tribunal itself
lacks the power directly to require compliance with such an order or
to punish non-compliance. Rather, orders of both provisional relief
and final relief can only be coercively enforced by proceedings in
national courts. Historic national law prohibitions against orders of
provisional relief by arbitral tribunals therefore rested from the outset
on a faulty characterization of such orders.
Equally important, prohibitions against provisional relief by arbitral

tribunals are inconsistent with the terms of (most) international
arbitration agreements and the purposes of the arbitral process. By
agreeing to arbitrate, parties presumptively wish to have their
disputes resolved in a single proceeding before a neutral tribunal:
(39) insofar as possible, that includes disputes regarding the
availability of provisional measures, which are not infrequently a
central aspect of commercial disputes. (40)
Indeed, particular risks arise from requiring requests for provisional

measures to be resolved by national courts. Such requests often
require consideration (at least page "1950" to some extent) of
the merits of the parties' underlying claims, thereby creating a risk
that national courts will purport to preempt or prejudge decisions of
the arbitral tribunal on the merits of the parties' dispute. This is
inconsistent with the objectives of the international arbitral process.
(41)
ii. National Legislation Recognizing Power of Arbitral Tribunal

to Order Provisional Relief
Consistent with the foregoing analysis, over the past several

decades, most developed jurisdictions have rejected historic
prohibitions against any grant of provisional measures by arbitral
tribunals. Instead, they have adopted arbitration legislation that
expressly confirms the power of arbitrators to issue provisional relief
(provided that this is consistent with the parties' agreement); this
power is subject to various limits (detailed below), which vary from
jurisdiction to jurisdiction, but which merely affirm the general
authority of international arbitral tribunals to grant provisional relief.
(42) Most developed national laws also provide, or national courts
433
have held, that the parties will be presumed, absent contrary

indication, to have agreed to permit the arbitral tribunal to grant
provisional measures (or, at least, certain types of provisional
measures). (43)
The trend towards recognition of greater powers on the part of

arbitrators to order provisional measures reflects the increasing
acceptance of arbitration as a satisfactory mechanism for resolving
complex international commercial disputes, (44) an increasing
recognition by national courts that interlocutory judicial interference
in the arbitral process is often counterproductive (45) and an
acknowledgement that (in many cases) it is desirable to have the
same tribunal resolve both the merits of a dispute and any requests
for provisional relief. Of course, as with most other aspects of
international arbitration, the parties remain free to alter this general
approach by agreeing that the arbitrators shall not have the power
(or shall have only limited power) to grant provisional measures. (46)
Absent such agreement, however, parties presumptively intend to
confer power to award provisional measures on the arbitrators.
Although historic limitations on arbitrators' power have been removed

in most states, some nations continue to impose mandatory
prohibitions that forbids arbitrators from ordering provisional relief.
That remains the case, for example, in Italy, China, Quebec and
Argentina, where local legislation provides that the granting of
provisional measures is reserved exclusively to local courts, which
are authorized page "1951" to issue provisional relief in aid of
arbitration. (47) Where parties agree to arbitrate in such a
jurisdiction, without also expressly granting the arbitral tribunal
power to order provisional measures, there is a credible argument
that they have contracted into the arbitral seat's limits on the
arbitrators' authority. (48)
(1). UNCITRAL Model Law: Original Text and 2006 Revisions
The UNCITRAL Model Law is a leading example of the trend towards

expansive arbitral authority to grant interim relief. That is particularly
true when the 2006 revisions to the Model Law are considered.
Article 17 of the Model Law, as adopted in 1985, provides that

“[u]nless otherwise agreed by the parties, the arbitral tribunal may,
at the request of a party, order any party to take such interim
measure of protection as the arbitral tribunal may consider
necessary in respect of the subject-matter of the dispute.” (49) While
the original text of Article 17 placed restrictions on a tribunal's
powers to order interim relief (i.e., such relief must “necessary” and
“in respect of the subject-matter of the dispute”), (50) it expressly
confirms the power of an arbitral tribunal to order at least a
significant range of provisional measures (provided that the parties'
arbitration agreement is not to the contrary).
Properly interpreted, Article 17's original limitation to provisional

434
12
measures “in respect of the subject matter of the dispute” does not
restrict the arbitral tribunal to orders presenting or detaining a
particular item of disputed property (e.g., a page "1952"
shipment of goods or parcel of real property). Rather, as discussed
below, the original text of Article 17 permits such orders as one
example of available provisional relief, but more broadly allows any
provisional measures that the tribunal considers “necessary,”
provided that such measures have a reasonable relation to the
subject matter of the dispute. (51)
As discussed in greater detail below, Article 17 of the Model Law

was extensively revised in 2006. (52) Among other things, Article
17(1) was amended to provide that, “[u]nless otherwise agreed by
the parties, the arbitral tribunal may, at the request of a party, grant
interim measures.” (53) This formulation confirms the expansive
scope of Article 17, by omitting the provision's original language that
interim measures may be granted where a tribunal considers them
“necessary” and “in respect of the subject-matter of the dispute.”
(54)
Article 17 of the Model Law also provides that, “[u]nless otherwise

agreed,” arbitrators have the power to order interim measures of
protection. This provision presumes that the parties intended to
confer the power to order specified “interim measures of protection”
on the arbitral tribunal and effectively requires evidence of a contrary
agreement to deny a tribunal such power. (55) As most commentary
concludes, the Model Law does not require an express agreement
granting the arbitrators the power to order interim measures, but
instead an agreement withdrawing such power. (56)
page "1953"
This approach is sensible and consistent with the parties' objectives

in agreeing to arbitrate. In concluding agreements to arbitrate,
reasonable parties intend that the international arbitral process will
be effective and capable of resolving all of their disputes. (57) They
also should be presumed to intend that the arbitral tribunal have the
authority, even when not expressly granted, to resolve the sorts of
disputes that ordinarily arise during the arbitral process, including
disputes over interim relief. Conversely, reasonable parties cannot
be presumed to intend that their chosen dispute resolution
mechanism should lack important procedural protections, or should
reward dilatory tactics by one party, or should require recourse to
national courts for effective relief. Accordingly, absent explicit
contrary indication in the parties' agreement, it is both sensible and
necessary to presume that arbitration agreements include a grant of
authority to order interim relief.
(2). Swiss Law on Private International Law
The historic trend rejecting legislative limitations on arbitrators'

authority to order provisional measures is well-illustrated by Swiss
435
law. There, the prohibitions in the 1969 Cantonal Concordat (58)

were reversed by the 1987 Swiss Law on Private International Law,
which expressly confirmed the arbitrators' power to grant provisional
relief. Thus, Article 183 of the Swiss Law on Private International
Law now provides “[u]nless the parties have agreed otherwise, the
arbitral tribunal may, at the request of a party, order provisional or
protective measures.” (59) Under this provision, Swiss authority now
recognizes broad power (absent contrary agreement) on the part of
international arbitral tribunals seated in Switzerland to grant
provisional relief. (60)
(3). U.S. Federal Arbitration Act
In the United States, the text of the FAA is silent on the arbitrators'
powers to order provisional measures, but U.S. courts now
recognize broad powers to grant interim relief on the part of arbitral
tribunals (absent contrary agreement). Early U.S. judicial page
"1954" decisions frequently held that arbitrators lacked the
authority to issue provisional relief (generally relying on narrow
readings of the parties' arbitration agreement). (61) In contrast, more
recent U.S. lower court decisions have consistently held that
arbitrators may issue provisional relief (provided that the parties have
not agreed to the contrary). (62)
Indeed, a refusal to give effect to an agreement providing arbitrators

power to grant provisional measures would be inconsistent with the
FAA's basic rule that agreements to arbitrate are enforceable. (63)
Although of limited direct relevance in international matters, U.S.
state arbitration statutes also increasingly contain language
specifically granting arbitrators the authority to grant provisional
measures. (64)
page "1955"
U.S. courts generally hold that the parties' agreement that the
arbitrators have the power to grant interim measures will be implied,
absent contrary indication. (65) As one U.S. lower court decision
reasoned:
“in general …, in the absence of an agreement or

statute to the contrary, an arbitrator has inherent
authority to order a party to provide security while the
arbitration is continuing. It is reasonable to assume
that parties, in agreeing to arbitration, implicitly
intended that the arbitration not be fruitless and that
interim orders to preserve the status quo or to make
meaningful relief possible would be proper. In such a
circumstance, the arbitrator's authority to act would
reasonably be implied from the agreement to arbitrate
itself.” (66)
14 436
Most U.S. commentators also conclude that arbitral tribunals

presumptively have the power to order provisional relief (unless
otherwise agreed). (67) Equally, as discussed below, U.S. courts
have not imposed significant limitations on the scope of the
arbitrators' authority to grant provisional measures (other than any
limits contained in the parties' agreement). (68)
(4). English Arbitration Act, 1996
The 1996 English Arbitration Act provides that, absent contrary

agreement, an arbitral tribunal may issue orders concerning the
preservation, detention, inspection, page "1956" or sampling of
“property which is the subject matter of the dispute,” (69) and
concerning the preservation of evidence. (70) For other types of
provisional measures, the Arbitration Act provides that “the parties
are free to agree that the tribunal shall have power to order on a
provisional basis any relief which it would have power to grant in a
final award.” (71) The apparent result is that, absent evidence of an
affirmative agreement that the tribunal shall have power to grant
provisional measures beyond those relating to
preservation/inspection of disputed property, no such power exists.
(72)
The approach under the English Arbitration Act is less desirable

than that of the Model Law and FAA, both of which assume that
parties intend to grant the arbitral tribunal broad powers to grant
interim measures (subject, of course, to contrary agreement). For
the reasons outlined above, this latter approach accords better with
the likely expectations of most commercial parties and is, in
practice, more likely to achieve fair and efficient results than the
more limited English statutory provision. (73)
(5). Other Jurisdictions
Most developed jurisdictions have taken courses similar to that

under the Model Law and FAA. That is true in countries such as
Germany, (74) Austria, (75) Sweden, (76) page "1957" Japan,
(77) India, (78) New Zealand, (79) Canada (80) and elsewhere. (81) As
under the Model Law and FAA, most such national laws rest on the
premise that the arbitrators' authority to grant provisional measures
will be implied and that an express agreement is required to
withdraw such power.
Of course, in all cases, the parties are free to withhold or limit the
arbitrators' power to grant provisional relief. Such limitations are
unusual, but if parties wish to channel all requests for provisional
measures into national courts (or a particular national court), they
are free to do so. Alternatively, as discussed in greater detail below,
the parties may agree to arbitrate pursuant to institutional rules,
which sometimes limit the arbitrators' power to grant provisional
437
relief. (82)
d. Institutional Arbitration Rules
Many leading institutional rules address the power of the arbitrators

to grant provisional measures. For the most part, these rules
specifically provide arbitrators power to grant provisional measures,
usually in relatively broad terms. (83)
i. UNCITRAL Arbitration Rules
The UNCITRAL Rules are representative of many contemporary

institutional regimes. Article 26 of the UNCITRAL Rules grants an
arbitral tribunal the power to issue “interim measures” which it
deems “necessary in respect of the subject matter of the dispute,
including measures for the conservation of the goods forming
page "1958" the subject matter of the dispute.” (84) This
provision is properly understood as granting arbitrators broad powers
to order provisional measures which they deem necessary, imposing
only the relatively modest limitation that such measures be “in
respect of the subject matter of the dispute.”
As with Article 17 of the UNCITRAL Model Law, (85) this limitation

should not be interpreted to restrict a tribunal to orders for the
preservation, detention, or inspection of disputed goods or property.
Rather, the UNCITRAL Rules are correctly understood as granting a
tribunal the authority to issue any measures against a party that it
deems necessary for protective or conservatory purposes, provided
only that these measures have some connection to the contract,
contractual or legal rights, property, requested relief, or other issues
in dispute. (86)
ii. ICC Rules of Arbitration
Even more expansively than the UNCITRAL Rules, Article 23 of the

ICC Rules grants the arbitral tribunal authority to order “interim or
conservatory measures it deems appropriate,” absent contrary
agreement by the parties. (87) This provision was deliberately
extended, beyond that contained in Article 8(5) of the 1988 version
of the ICC Rules, in order expressly to grant ICC arbitrators the
power to award provisional relief. (88)
page "1959"
iii. LCIA Rules
To the same end, Article 25(1) of the LCIA Rules authorizes an LCIA
tribunal to order various provisional measures (including security for
claims, preservation or sale of disputed property, and any other relief
which could be made in a final award), subject to contrary
438
16
agreement by the parties. (89) The LCIA Rules specifically (and

unusually) grant the arbitrators authority to order security for costs.
(90)
iv. Other Institutional Rules
Most leading institutional rules have been revised in recent years to

provide the arbitrators with the power to grant provisional relief. (91)
Thus, the AAA Commercial Rules historically did not authorize
tribunal-ordered provisional relief, (92) but have been revised, to
provide an express grant of authority to order provisional relief. (93)
Similarly, the Stockholm Arbitration Institute's Rules until recently
provided only page "1960" for the ordering of specific
performance, (94) but were revised in 2007 to authorize the arbitral
tribunal to “grant any interim measures it deems appropriate.” (95)
The ICDR, WIPO and JCAA Rules are almost identical. (96)
In contrast, the CIETAC Rules provide that the arbitral tribunal may
not order provisional measures, which must be sought instead only
from national courts. (97) This remains an outlier among leading
institutional arbitration rules.
Even where institutional rules do not expressly provide the power to

grant provisional measures, national courts and/or arbitral tribunals
have sometimes interpreted them to authorize such action. (98) For
example, under the 1988 ICC Rules (which did not expressly
authorize tribunal-ordered provisional measures (99) ), tribunals
concluded that they had the authority to grant provisional relief. (100)
In contrast, some early national court decisions refused to imply a
power to order provisional measures into institutional rules that did
not expressly address the subject. (101) As discussed above,
however, the overwhelming trend, among more modern decisions, is
to permit arbitral tribunals the authority to order provisional
measures absent contrary agreement by the parties. (102)
e. Choice of Law Applicable to Arbitral Tribunal's Power to

Grant Provisional Measures
Relatively little attention has been devoted to the question of what

law applies to determine an arbitral tribunal's power to grant
provisional measures in an page "1961" international arbitration.
(103) Preliminarily, the law governing the tribunal's power to grant
provisional measures is to be distinguished from the law governing
the standards applicable to a grant of provisional measures (which is
discussed separately below). (104)
In many cases, the law applicable to the arbitral tribunal's power to

grant provisional measures will be the procedural law of the
439
arbitration, (105) typically the arbitration legislation of the arbitral

seat. (106) Most awards look to the law of the arbitral seat as
defining the arbitrators' power to grant provisional relief, (107) as
does most national court authority (108) and commentary. (109)
Likewise, national arbitration statutes that address the issue of the
tribunal's power to grant provisional measures are generally
applicable (and only applicable) in arbitrations seated within national
page "1962" territory. (110) Where the law of the arbitral seat
forbids arbitrators from ordering provisional measures, they will
ordinarily not do so. (111)
There is no reason to doubt this choice-of-law approach, although it

is important to appreciate what precisely it means. The law
governing the arbitration proceedings (almost always that of the
arbitral seat) is the most natural legal system governing the powers
of an arbitral tribunal (112) and, absent contrary agreement, is that
legal system most likely intended by the parties to govern the
powers of the tribunal. In principle, therefore, the law governing the
tribunal's power to grant interim relief is that of the arbitral seat. (113)
As noted above, however, there are instances in which the national

law of the arbitral seat may deny an arbitral tribunal the power to
grant provisional relief (e.g., Argentina, China, Italy). (114) That
presents the question of what law should apply when parties (a)
agree to arbitrate in such a state, which forbids tribunal-ordered
provisional measures, but also (b) expressly agree that the arbitral
tribunal has the power to order provisional measures.
The answer to the foregoing question remains the same – that is,
the law of the arbitral seat continues to govern the arbitrators'
authority to order provisional measures – but subject to the
important qualification that, where the parties have expressly
granted the arbitrators power to order provisional measures, the law
of the arbitral seat should generally be regarded as violating the New
York Convention's requirement that Contracting States recognize
international arbitration agreements, including with regard to the
arbitral procedure. (115) On this analysis, the page "1963"
arbitral tribunal should consider itself competent to order provisional
measures in accordance with the parties' agreement
(notwithstanding the contrary provisions of the law of the arbitral
seat) and national courts outside the arbitral seat should consider
themselves free to recognize and enforce awards granting such
relief. (116) Conversely, where the parties have agreed to arbitrate in
such a jurisdiction and not expressly granted the arbitrators power
to order provisional relief, their choice of arbitral seat should
ordinarily be interpreted as an exclusion of the arbitrators' power in
this regard. (117)
Of course, in practice, such circumstances are unlikely. Most

tribunals will be reluctant to grant provisional measures despite local
law denying them such power (and many parties will, out of
440
prudence, refrain from seeking relief where the law of the arbitral
seat is to this effect). One practical alternative is for the tribunal to
make a precatory or advisory decision, urging (but not ordering) the
parties to take specified steps. This may have substantial practical
consequences for the parties, since they and their counsel usually
will not want to risk the consequences of flouting the tribunal's
admonitions. (118) On the other hand, in cases where provisional
measures really matter, parties may well be prepared to run such
risks because of the countervailing rewards.
Relatively little attention has been devoted to the question whether

parties could “contract out” of the law of the arbitral seat with regard
to the arbitrator's power to award provisional relief. Some authorities
have answered this question in the negative (under particular
legislative regimes), (119) apparently relying on the notion that the
arbitration legislation of the arbitral seat is mandatory. (120)
page "1964"
f. Limitations on Arbitral Tribunal's Power to Order Provisional

Relief
Although most developed jurisdictions now recognize the power of

international arbitral tribunals to order provisional measures, there
are several significant limitations on this power. These limitations
arise in part from the inherent nature of the arbitral process, which is
a contractual mechanism between particular parties, and which
requires constitution of a tribunal for each dispute that arises; these
limitations also arise in part from the terms of some national
arbitration statutes.
i. Arbitral Tribunal Lacks Power to Order Provisional Measures

Against Third Parties
First, an arbitral tribunal's powers are virtually always limited to the

parties to the arbitration and the arbitration agreement. (121) As a
consequence, an arbitrator generally can (and will) order provisional
measures only against the parties to the arbitration. He or she will
not have the power to order, for example, attachment or preservation
of property held by a third party. (122)
This limitation is evident in some national arbitration legislation,

including the UNCITRAL Model Law, which authorizes an arbitral
tribunal to “order any party to take such interim measures of
protection” deemed necessary. (123) This is also made explicit by
the Belgian Judicial Code, which provides that “the arbitral tribunal
may, at the request of a party, order provisional or protective
measures, with the page "1965" exception of an attachment
order.” (124) Even where no such statutory limit exists, the
contractual nature of the arbitral process implies that the tribunal's
authority is limited to the parties to the arbitration. (125) Among
441
other things, a tribunal may not order the attachment of assets in

the custody and control of a non-party. (126)
Despite the foregoing, an arbitral tribunal would have the power to

order a party to take steps vis-à-vis third parties to prevent or
accomplish specified actions. For example, a corporate entity could
be ordered to direct its subsidiary to take certain steps (e.g., return
or preserve specified property, deliver or safeguard funds). Such
orders test the limits of arbitral powers, but, in appropriate cases,
where necessary to accomplish justice, a tribunal should be
prepared to issue them.
ii. Arbitral Tribunal Lacks Power Directly to Enforce Provisional

Measures
Second, it is also clear that an arbitral tribunal ordinarily lacks the

authority directly to enforce its provisional measures. Rather, such
enforcement is the responsibility of national courts, at the
application of one or more of the parties. As with final relief, an
arbitral tribunal lacks direct coercive power to compel compliance
with its awards or orders of provisional measures. This is evident, for
example, in the language of the Swiss Law on Private International
Law, which provides that “[i]f the party so ordered [by the arbitral
tribunal to take specified provisional measures] does not comply
therewith voluntarily, the arbitral tribunal may request the assistance
of the competent court.” (127)
Even absent such statutory language, however, it is clear under

virtually all national arbitration regimes that an arbitral tribunal
cannot ordinarily apply direct coercive enforcement measures to
obtain compliance with its provisional orders. (128) page "1966"
This is merely a specific application of the more general rule,
discussed below, that an arbitral tribunal is not competent to exert
direct coercive measures to enforce its own final awards. (129)
Despite the foregoing, the line between “direct coercive measures of

enforcement,” and other actions by an arbitral tribunal, is sometimes
less clear than often assumed. A tribunal may, for example, order a
party to deliver property or funds to it, for safekeeping during the
course of arbitral proceedings. Once such an order is complied with,
the tribunal does, in almost all practical senses, exercise direct
coercive authority to enforce its awards (i.e., it controls disposition
of the disputed property or funds). Although the tribunal lacks the
coercive authority to force a transfer of the disputed funds or
property in the first instance, once this occurs, it exercises powers
very close to a direct enforcement authority.
Nevertheless, the better way of considering such powers is that they

arise only in rare instances, where the parties have granted a
tribunal a type of self-executing authority, which any private party
could exercise in a contractual manner (e.g., an escrow agent). This
sort of power is not strictly equivalent to direct coercive authority,
such as imposing fines, penalties, or criminal sanctions, which
442
remains the sole prerogative of national courts.
It has also occasionally been suggested that an arbitral tribunal

could order financial penalties of a contractual nature, in order to
compel a party to comply with provisional measures. (130) Indeed,
some national laws provide arbitrators with the power to impose
sanctions on a party for failing to comply with their interim orders.
(131) On the other hand, a tribunal's imposition of penalties raises
enforceability issues under at least some national laws. (132)
It is often said that an arbitral tribunal can indirectly procure

compliance with its provisional measures through the express or
implied threat of adverse inferences against a non-compliant party.
In one commentator's views:
page "1967"
“the fact that arbitral tribunals can draw adverse

conclusions from failure to comply with their decisions
concerning [provisional] measures encourages
voluntary compliance with such orders.” (133)
This overstates somewhat the practical consequences of a tribunal's

order and, more importantly, fails to identify the limitations on an
arbitral tribunal's “informal” powers of encouraging compliance with
its provisional measures. As for practical effects, parties often
adduce reasons of local law, changed circumstances, acts of third
parties, or other issues that at least partially excuse or blur their
non-compliance. Equally important, parties may well be willing to
sacrifice some measure of their appearance as “good citizens” if
non-compliance with provisional measures brings them significant
benefits. (134)
As for legal consequences, it bears emphasis that a tribunal is

obligated to resolve the parties' dispute on the merits. Even if a party
has not behaved as a “good citizen,” the tribunal remains obliged to
decide the parties' claims in accordance with the law and evidentiary
record. If an arbitral tribunal were to draw adverse inferences from a
parties' refusal to comply with provisional measures (other than
disclosure-related orders), it might very well depart from its arbitral
mandate and obligation to resolve the dispute impartially. (135)
iii. Limitation to “Subject Matter of Dispute”
Third, arbitration legislation also sometimes limits the scope of the

arbitral tribunal's power to grant provisional measures. That is
arguably true under the original text of Article 17 of the UNCITRAL
Model Law, as well as other national arbitration statutes.
As discussed above, the original text of the 1985 UNCITRAL Model

Law grants arbitral tribunals the power to issue provisional measures
which they “consider necessary in respect of the subject matter of
the dispute.” (136) It is sometimes said that this language limits the
443
21
arbitrators' authority to grant provisional measures, (137) page

"1968" and there is general support for this conclusion in the Model
Law's drafting history. (138) The better view is that the drafting
history is ambiguous, (139) and that such interpretations are
inconsistent with the Model Law's objectives. (140)
The requirement that provisional measures be issued “in respect of

the subject matter of the dispute” ought not limit a tribunal's power
to particular items whose ownership is in dispute. Instead, Article 17
can readily be interpreted as extending to the preservation of
contractual rights or of the equilibrium between the parties (e.g., the
maintenance of a contractual relationship for licensing intellectual
property or purchase/sale of goods); where the parties' dispute
concerns the continued existence or nature of their contractual
relationship, then provisional measures preserving all aspects of that
relationship are properly regarded as being “in respect of the subject
matter of the dispute.” The same analysis can be extended to the
preservation of assets sufficient to satisfy a party's claims (e.g.,
security for costs or damages); such relief is properly considered as
being “in respect” of the subject matter of the parties' dispute,
because it is “necessary” in order that the parties' dispute can be
resolved fairly at all. Indeed, in the majority of arbitrations, the
“subject matter of the dispute” is not specific property, and it makes
little sense to limit Article 17's reach solely to relatively atypical
circumstances. (141)
page "1969"
As discussed above, the text of the Article 17 of the UNCITRAL

Model Law was revised in 2006. Among other things, Article 17(1)
was amended to omit the requirement that provisional measures be
“in respect of the subject-matter of the dispute.” (142) This
amendment streamlined (this aspect of) the Model Law, confirming
the arbitral tribunal's broad authority to grant provisional measures.
(143) Properly understood, however, the amendment clarified the
existing substance of the Model Law rather than expanding
previously-limited powers.
Other arbitration legislation imposes limits on the scope of the

arbitrators' powers to order provisional measures. As noted above,
the English Arbitration Act, 1996, provides that an arbitral tribunal
has the power to grant provisional measures “in relation to any
property which is the subject of the proceedings or as to which a
question arises in the proceedings.” (144) Although it expands on
earlier English legislation, the scope of this provision is uncertain
and potentially fairly limited. (145) The Arbitration Act also permits
parties by agreement to grant the arbitrators broader power to order
provisional measures. (146) Some other national arbitration statutes
have comparable limitations. (147)
iv. Arbitral Tribunal Lacks Power to Order Provisional Measures
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22 444 15/89
Until It Is Constituted
Fourth, an arbitral tribunal obviously cannot issue provisional

measures until it has been constituted. This is implied by arbitration
legislation limiting the power to grant provisional measures to
“arbitral tribunals.” (148) In any case, until an arbitral tribunal has
been legally-constituted, it has no powers and cannot issue
provisional measures. Institutional arbitration rules impose similar
(149) (or more demanding (150) ) requirements.
Although self-evident, this limitation can have substantial practical

importance. The most critical time for seeking provisional measures
is often at the outset of the page "1970" parties' dispute: one
party may seek to dispose of disputed property or evidence, to alter
the contractual or commercial status quo ante (by terminating an
agreement or commercial relationship) or to take other steps to
preempt or position itself for the arbitration. The absence of any
arbitral tribunal to which requests for provisional relief may be
directed in the initial weeks or months of a dispute (151) may
effectively prevent the tribunal from granting meaningful interim
measures. (As discussed below, this is one of the reasons that
national courts are also accorded concurrent jurisdiction, under
most legal systems and institutional rules, to grant provisional
measures. (152) )
v. Specialized Institutional Arbitration Rules for Expedited

Some arbitral institutions have adopted specialized rules that seek

to provide a non-judicial mechanism for obtaining urgently-needed
provisional relief at the outset of arbitral proceedings. The ICC Rules
for a Pre-Arbitral Referee Procedure are the leading example of such
efforts. (153) At least to date, however, these rules have been used
only very rarely (less than a dozen instances). (154) That is because
parties must agree in writing to the use of this specialized procedure
and, given the realities of litigation, this cannot often be expected to
occur after a dispute has arisen. At earlier stages, when the
underlying contract and arbitration agreement are negotiated, parties
have not generally been sufficiently focused on the procedural
intricacies of future disputes to make provision for specialized
issues.
A more practical approach is that taken by the Netherlands

Arbitration Institute's current Arbitration Rules and the recently-
revised ICDR Rules. Each of these sets of rules provides for the
appointment, in cases of urgency, of a sole arbitrator to resolve
requests for provisional measures prior to constitution of the full
arbitral tribunal. (155) As soon as the full tribunal is constituted, the
arbitrator responsible for considering initial requests for provisional
measures ceases to play any further role in the arbitral proceedings.
(156)
445
page "1971"
Because the NAI and ICDR Rules do not require a separate

agreement by the parties to this mechanism, they offer a reasonable
prospect of being used in actual dispute resolution. (157) At the
same time, they require very prompt and professional action by the
arbitral institution, which imposes burdens and risks on the
institution (and thus, the parties). Despite this, unless practical
application in coming years is to the contrary, the NAI and ICDR
approaches appear to be sensible steps towards improving the
arbitral process.
Finally, an alternative approach to obtaining expeditious tribunal-

ordered provisional measures has been adopted in the LCIA Rules.
The LCIA Rules provide for expedited constitution of arbitral tribunals
in appropriate cases, thereby enabling a tribunal to be formed and
be in a position to consider requests for provisional measures in a
matter of days or weeks. Although not directly addressing the need
for rapid mechanisms for tribunal-ordered provisional measures, this
appointment procedure is a very sensible and practical means for
making tribunal-ordered provisional relief a realistic possibility in
many cases.
2. Arbitral Tribunal's Authority to Order Provisional Relief Is Not

Exclusive: Concurrent Jurisdiction of National Courts to Grant
Provisional Relief
Although most contemporary national laws in developed jurisdictions

recognize the power of international arbitral tribunals to order
provisional relief, this authority is generally not exclusive. Rather,
absent contrary agreement, the arbitration regimes in virtually all
developed states contemplate concurrent authority of the arbitral
tribunal and national courts to order provisional relief. (158) That is, a
request for page "1972" provisional measures in connection
with a dispute which is subject to international arbitration may
properly be directed to a national court, as well as to an arbitral
tribunal.
This overlapping jurisdiction of national courts and arbitral tribunals

to order provisional measures is unusual (in that, in virtually all other
respects, an agreement to arbitrate divests national courts of any
competence over the parties' dispute). (159) This overlapping
competence also has the potential for costly or duplicative parallel
proceedings, inconsistent or conflicting results and judicial
interference in the arbitral process. (160) Nonetheless, it is deeply-
engrained in the contemporary framework for international arbitration
and necessary as a practical matter. We consider the power of
national courts to issue provisional measures in connection with
international arbitrations in detail below. (161)
3. Parties' Agreement Excluding Arbitral Tribunal's Power to

Order Provisional Measures
446
As discussed above, almost all developed arbitration regimes permit

arbitral tribunals to order provisional measures (subject to the
parties' contrary agreement). (162) Consistent with basic principles
of party autonomy, however, nothing precludes parties from agreeing
that the arbitral tribunal shall not have the power to award provisional
relief (or that such relief shall be ordered only in specified
circumstances).
In practice, it is very unusual for arbitration agreements to exclude

the arbitral tribunal from ordering provisional measures. For the
reasons detailed above, parties typically want the arbitrators to have
the power to grant provisional relief. (163) Nevertheless, it is
conceivable that parties would wish to centralize all provisional
measures applications in a single (national court) forum. In these
circumstances, as already detailed above, leading national
arbitration laws (164) and institutional page "1973" rules (165)
give effect to agreements withholding the power to grant provisional
measures from the arbitral tribunal.
It is self-evident that an agreement to arbitrate does not, without

more, constitute an agreement excluding the tribunal's power to
order interim measures (by failing to affirmatively grant such
authority). On the contrary, as already noted, an agreement to
arbitrate should be understood as including an agreement that the
arbitral tribunal will have the power to order provisional measures.
(166) Nor should an agreement to arbitrate in accordance with
institutional rules which do not expressly provide the arbitral tribunal
with the power to order provisional relief be treated as an exclusion
of such power. (167) Again, an agreement to arbitrate should
ordinarily be understood as implying or encompassing the possibility
of tribunal-ordered provisional measures, even when such authority
is omitted from a listing of the tribunal's powers. (168)
Similarly, the parties' agreement that a particular national court will

have the power to order provisional relief should not ordinarily be
treated as an agreement denying or withholding such power from the
arbitral tribunal. As discussed elsewhere, it is well-settled that
national courts generally possess concurrent jurisdiction to order
provisional measures (together with arbitral tribunals). (169) The
parties' specification of a particular national court to consider such
requests, or their confirmation that provisional measures may be
obtained from national courts, should not be considered as an
exclusion of concurrent power on the part of the arbitral tribunal.
In most circumstances, the only type of agreement that should

suffice to exclude the arbitral tribunal's power to order provisional
relief should be a written provision expressly denying such authority
or, less clearly, an ad hoc agreement to arbitrate in an arbitral seat
that forbids tribunal-ordered relief. (170) Given the likely expectations
of reasonable business parties, and the benefits in terms of fairness
447
and efficiency, no agreement to exclude the arbitrators' power to

order provisional measures should otherwise be presumed or
implied, save in unusual circumstances.
page "1974"
4. Arbitral Tribunal's Exercise of Authority to Order Provisional

Relief
Assuming that an arbitral tribunal possesses the power to order

provisional relief under national law, it is critical to consider how
international arbitrators exercise that authority. The short answer is
that arbitrators were historically hesitant to grant provisional relief,
even when authorized by national law to do so, but that in recent
years tribunals have shown greater decisiveness. Nonetheless, the
circumstances in which international arbitral tribunals will grant
provisional relief vary widely, depending on the applicable law(s),
relevant contractual terms and the tribunal's assessment of
discretionary considerations.
a. Increased Willingness of Arbitral Tribunals to Grant

Provisional Relief
Historically, tribunal-ordered provisional measures were not

common. The Secretary General of the ICC Court of Arbitration
reported in 1992 that in the past 15 years (i.e., between 1977 and
1992), only 25 ICC cases had addressed the subject of provisional
relief. (171) This statistic reflected an historic reticence on the part of
tribunals to grant (and parties even to request) provisional relief.
(172)
This reticence had various causes. Historic prohibitions in some

national laws forbidding arbitrators from ordering provisional
measures were obviously important. (173) Perceived difficulties in
enforcement also contributed to arbitrators' reticence. Similarly,
arbitral tribunals were (and continue to be) concerned about
prejudging the merits of the parties' dispute or appearing partial to
one party at an early stage of the arbitral proceedings. Further, the
process of considering whether to order provisional measures can be
time-consuming and distracting. For all these reasons, arbitrators
were (and to some extent still may be) more hesitant to order
compulsory provisional measures than a national court might be.
Nevertheless, arbitrators want to fulfill their mandate of resolving the

parties' dispute fairly, efficiently and effectively. There are many
circumstances where this can be accomplished only by granting
provisional measures, safeguarding the subject matter of the
dispute, protecting one party from irreparable harm, or otherwise.
page "1975" Further, doubts about arbitrators' power to grant
provisional measures have progressively eroded, while published
instances of tribunal-ordered provisional measures have become
familiar, and practical obstacles have diminished. (174) Thus, in
448
contrast to earlier ICC experience, a review of ICC awards between

1985 and 2000 identified some 75 cases in which some form of
provisional measures were requested. (175)
For all these reasons, arbitral tribunals have demonstrated an

increasing willingness over the past decade to entertain and grant
applications for provisional measures. Today, tribunals not
infrequently issue orders or awards granting provisional relief in
terms little different from those of national courts. The essential
criteria determining whether such relief will be granted are the legal
standards applied by the arbitral tribunal, the tribunal's assessment
of discretionary factors relating to the requested relief and any
relevant terms of the parties' contract.
b. Choice of Law Governing Arbitral Tribunal's Exercise of

Authority to Grant Provisional Relief
Assuming that an arbitral tribunal has the power to order provisional

measures (under applicable law and the parties' arbitration
agreement (176) ), it is necessary to consider what standards govern
its decision whether or not to grant such measures. This is a topic
to which limited attention has been devoted. Nonetheless, with the
increasing importance of provisional measures in international
arbitration practice, this question has considerable practical, as well
as theoretical, significance.
The choice of the law providing the standards for the granting of
provisional measures in international arbitration is distinguishable
from the choice of the law governing the arbitral tribunal's power to
order provisional measures. As discussed above, the law governing
the tribunal's power to order provisional measures is fairly clearly the
law of the arbitral seat (or the procedural law of the arbitration). (177)
In contrast, the law providing the standards for a tribunal's decision
whether to grant provisional measures is at least arguably supplied
by a different legal system than that of the arbitral seat. In particular,
three principal choices are possible for page "1976" the law
governing the granting of provisional measures: (1) the law of the
arbitral seat; (178) (2) the law governing the parties' underlying
contract or relationship; (179) or (3) international standards. (180)
First, there is little reason to conclude that the law of the arbitral
seat provides the substantive standards for an arbitral tribunal's
decision whether to grant provisional measures. It is noteworthy that
no national arbitration statute – other than the 2006 revisions to the
Model Law – provides meaningful standards governing an arbitral
tribunal's decision whether to grant provisional measures. As
discussed above, many arbitration statutes merely recognize the
arbitral tribunal's power to grant provisional measures, without
specifying the standards governing the exercise of such power. (181)
The most that arbitration statutes have historically done in this
regard is to provide, as the Model Law and other legislation does,
that interim measures may be granted if the tribunal “consider[s]” it
449
“necessary” or “appropriate” to do so. (182) These formulations

merely acknowledge the tribunal's broad powers page "1977"
with regard to provisional relief, without purporting to provide
substantive standards as to how such power is to be exercised.
The absence from national arbitration statutes of any statutory

standards for the grant of provisional relief suggests that the law of
the arbitral seat does not in fact necessarily provide such standards.
If the law of the arbitral seat were the source of such standards, one
would expect them to be set forth in the applicable arbitration
legislation. Their absence indicates that some other legal source
provides the standards determining the circumstances in which
provisional measures are to be granted.
Similarly, the standards governing the decision to grant provisional

measures are not logically connected to the law of the arbitral seat.
For example, a dispute over the preservation (or sale) of disputed
goods, where the underlying contract between U.S. and French
parties is governed by English law, should not be resolved differently
in England, France, the United States, or elsewhere, depending on
where the arbitration is seated. Consistent with this, practical
experience teaches that parties seldom consider that their choice of
arbitral seat affects the substantive standards for granting provisional
relief.
Second, there is also little reason for concluding that the law
governing the parties' agreement or the merits of the parties'
underlying dispute provides the standards for granting provisional
measures. The fact that the parties have agreed that their contract
will be governed by some legal system provides little indication as to
their intentions regarding provisional measures. Further, most
national legal systems contain no corpus of law providing standards
for international arbitral tribunals to grant provisional measures:
rather, national legal systems will set forth standards by which
national courts grant provisional measures, but these standards
have no decisive importance or precedential value for international
arbitral tribunals. Finally, looking to the law governing the substance
of the parties' dispute would produce the unattractive result that
requests for provisional measures with regard to different substantive
claims in an arbitration (e.g., tort and contract claims; claims under
different contracts) might well be governed by different national laws
and standards (where different substantive law is applied to different
underlying claims on the merits).
The better view is that international sources provide the appropriate

standards for granting provisional measures in international
arbitration. These sources consist of arbitral awards, where tribunals
have considered similar issues, drawing on common principles of
law in developed states. These international sources are consistent
with the parties' reasonable expectations, because they ensure that
(a) a single, uniform standard will be applied to requests for
provisional measures in an arbitration; (b) a single, uniform standard
will apply to the same sorts of requests regardless what the seat of
the arbitration may be; and (c) the standard for provisional relief will
450
28
be tailored to international arbitral procedures, rather than to the

procedures of a national court system. This approach also reduces
the importance page "1978" of choice-of-law questions and
encourages uniform results, both of which are important objectives of
the arbitral process. (183)
This also accords with the limited precedent that exists on the topic.
Most arbitral awards concerning provisional measures look to
international standards (expressed in earlier awards and
commentary), rather than to national court provisions. (184) This also
accords with the treatment of other “procedural” issues in
international arbitral proceedings – such as standards for disclosure,
evidence-taking and conflicts of interest – which are generally
governed by international standards (including pursuant to the IBA
Rules on the Taking of Evidence or Guidelines for Conflicts of
Interest). (185)
The 2006 revisions to the UNCITRAL Model Law adopt an approach

that is in tension with the foregoing analysis. Revised Article 17A
provides that a party seeking interim measures must satisfy the
tribunal that specified conditions exist (irreparable harm, outweighing
possible injury to other parties; reasonable possibilities of success
on the merits). (186) This revision of Article 17 has little to
recommend it.
Putting aside specific criticism of the particular formula adopted by

Article 17A, (187) the basic concept of prescribing substantive
standards for interim relief page "1979" binding on arbitral
tribunals seated on local territory is unwise. It is unnecessary,
because of the ongoing development of better-formulated, more
nuanced international standards by arbitral tribunals, which are
tailored to the circumstances of particular categories of cases (as
discussed below). (188) Indeed, Article 17A's approach is also
affirmatively damaging, because it threatens this ongoing
development of international standards, tailored to the needs of
particular cases, with national standards that ignore the specifics of
particular types of cases. Considered constructively, if Article 17A is
adopted, it should be interpreted in light of international authority
from other national courts and arbitral tribunals seated elsewhere, in
order to avoid the costs of a purely national approach to this issue.
c. Standards for Granting Provisional Relief in International

Arbitration
In practice, arbitral tribunals apply relatively straightforward

standards to requests for provisional relief. Preliminarily, the
standards applied by an arbitral tribunal will be determined, or at
least heavily influenced, by any contractual standards agreed by the
parties. Although it seldom occurs, parties sometimes agree that
provisional measures or injunctive orders may be issued upon the
claimant making certain showings. (189) When this occurs, there is
no reason not to give effect to the parties' agreement (absent some
451
29
unusual public policy prohibition).
Also preliminarily, institutional rules typically do not provide

meaningful standards for the grant of provisional measures.
Paralleling national arbitration legislation, most institutional rules
provide only that a tribunal may issue such provisional relief that it
“deems necessary” (190) or “appropriate.” (191) These formulations
merely confirm the tribunal's broad authority to grant provisional
relief, and do not establish standards for when that authority should
be recognized.
Equally, however, these formulations do not purport to leave

provisional measures entirely to the arbitrators' unguided discretion.
(192) Rather, they should be understood as contemplating that
arbitral tribunals will formulate and apply legal standards specifying
when provisional measures will be granted. In practice, that page
"1980" is what arbitral tribunals have done, generally applying fairly
careful and structured analysis to the question whether or not to
order provisional measures.
Stated generally, most international arbitral tribunals require

showings of (a) serious or irreparable harm to the claimant; (b)
urgency; and (c) no prejudgment of the merits, while some tribunals
also require the claimant to establish a prima facie case on the
merits. Considered more closely, and as detailed below, most
arbitral tribunals also look to the nature of the provisional measures
that are requested, and the relative injury to be suffered by each
party, in deciding whether to grant such measures. (193) In
particular, some provisional measures (e.g., preserving the status
quo or ordering performance of a contract or other legal obligation)
will typically require strong showings of serious injury, urgency and
a prima facie case, while other provisional measures (e.g.,
preservation of evidence, enforcement of confidentiality obligations,
security for costs) are unlikely to demand the same showings.
It is also unclear precisely what sort of showing is required for the

various elements of a request for provisional measures. It is
sometimes suggested that arbitral tribunals may order provisional
measures based simply on a “probability” – in the sense of a
substantial risk, rather than a 50%or greater likelihood – that the
requirements of serious injury, urgency and a prima facie case are
satisfied. (194) This standard makes most sense with regard to the
related requirements of serious injury and urgency (195) – where
relief can often appropriately be granted based upon a material risk
that serious harm is imminent if provisional measures are not
granted. It is more difficult to justify this reduced standard of proof
with regard to prohibitions against prejudgment.
i. “Irreparable” or “Serious” Injury
First, arbitral tribunals frequently require that the party seeking

provisional measures demonstrate that it may suffer either
452
“irreparable” or “serious” injury unless provisional relief is granted.

(196) In the words of one frequently-cited award, “the page
"1981" Arbitral Tribunal may only order provisional measures, if the
requesting party has substantiated the threat of a not easily
reparable prejudice.” (197) Or, as formulated by an experienced
practitioner, “it is not appropriate to grant a measure where no
irreparable or substantial harm comes to the movant in the event the
measure is not granted.” (198)
Some authorities suggest that “irreparable” harm is required for a

grant of provisional measures. As the tribunal in a leading ICSID
arbitral award observed, “a provisional measure is necessary where
the actions of a party ‘are capable of causing or of threatening
irreparable prejudice to the rights invoked.’” (199) In contrast, other
authorities appear to require only a showing of “serious” or
“substantial” harm, without requiring that the injury be “irreparable” in
a literal sense. (200)
Most commentary and decisions gloss over the potentially

substantial difference between the risks of “irreparable” and “serious”
damage. (201) Obviously, it is difficult (and not infrequently
impossible) to demonstrate truly “irreparable” harm that cannot be
compensated by money damages in a final award; a literal
“irreparable harm” requirement would limit provisional measures
principally to cases where one party was effectively insolvent or
where enforcement of a final award would page "1982" be
impossible. (202) In reality, however, most decisions which state
that damage must be “irreparable” do not appear to apply this
formula, but instead require that there be a material risk of serious
damage to the plaintiff. (203)
In fact, even this formulation obscures more complex

considerations. On close examination, tribunals appear to consider
the extent to which (a) the claimant will suffer serious injury during
the arbitral proceedings; (b) the extent to which such injury appears
compensable in a final award; and (c) the extent to which it is just or
fair that the burden or risk of loss during the arbitral proceedings fall
on one party or another (including considerations such as whether
one party is seeking to alter the existing status quo to its advantage
during the arbitral proceeding, the likelihood of success of each
party on the merits of its case, and the relative hardship to each of
the parties if provisional measures are or are not granted). Some
authorities page "1983" refer to this, accurately, as a “balancing
of interests” or a “balancing of hardships.” (204) The 2006 revisions
to Article 17 of the UNCITRAL Model Law adopt a similar approach.
(205)
For example, where the claimant, asserting a prima facie credible

claim, appears likely to suffer serious (but not irreparable) injury as a
consequence of steps threatened by the respondent to alter the
existing status quo, provisional measures are likely; that is
particularly true where the respondent's actions appear designed to
453
make ultimate enforcement of an award more difficult (e.g.,

transferring disputed property outside the ordinary course of
business) and/or the respondent does not appear likely to suffer
material harm from a grant of provisional measures. Conversely,
where a respondent is merely pursuing business in the ordinary
course, its contemplated actions appear unaffected by litigation
considerations and it will suffer demonstrable damage from the
requested provisional measures, tribunals are more likely to require
a showing of truly “irreparable” harm by the claimant.
Some tribunals appear prepared to issue provisional relief designed

simply to ensure that the commercial damage resulting from the
arbitral process is, insofar as possible, minimized. Thus, there are
instances where tribunals will require specified actions (e.g.,
continued licensing of intellectual property, continued sales of
products) even where the requesting party cannot show irreparable
or even serious harm, merely because ordering these actions
reduces the overall damages to the respondent and claimed in the
arbitration. (206) The grant of provisional measures in these
circumstances is arguably commercially-sensible, but would
ordinarily exceed the limits of existing legal standards which require
a genuine showing of grave harm.
Some forms of measures which are characterized as “provisional

relief” do not require showings of serious or irreparable injury. Many
authorities treat requests for the preservation of evidence, or the
sampling of goods, as requests for provisional page "1984"
relief. (207) Properly characterized, however, these are best not
considered as true requests for provisional measures of protection,
but rather as requests for disclosure or the taking of evidence.
It also makes little sense to require a showing that “irreparable”

harm will occur if disputed goods are not sampled or if relevant
evidentiary materials are not produced or secured. (208) Rather, as
discussed in greater detail below, applications for these types of
measures should be regarded as disclosure requests, handled in
accordance with the tribunal's overall responsibility for determining
the facts of the case in a fair and efficient manner. In many cases, it
will be appropriate to secure, sample, or preserve evidence even if
there is no serious risk of irreparable harm. (209) Similarly, as also
discussed below, applications for security for legal costs typically
do not require showings of an urgent risk of irreparable harm. (210)
Parties sometimes take steps that will (and may be designed to)
frustrate the tribunal's jurisdiction and remedial authority. The
classic examples of such conduct are disposing of the subject
matter of the arbitration (e.g., intellectual property, disputed shares
in a company) or fundamentally altering circumstances so that
requested relief cannot be granted or is meaningless (e.g., removing
assets from a company whose ownership is in dispute, terminating
contractual relations with other parties in a multiparty context).
Tribunals are particularly likely to consider such conduct as causing
sufficient harm to warrant the issuance of provisional measures.
454
(211)
page "1985"
ii. Urgency
Second, and related to the requirement of serious/irreparable

damage, many arbitral awards and commentators declare that an
award of interim relief requires a showing of “urgency.” (212) That is,
the tribunal must be persuaded that immediate (or at least prompt)
action is necessary in order to prevent serious or irreparable damage
to the claimant. This requirement has been formulated as follows:
“urgency is necessary … in order to make a provisional decision as
quickly as possible without awaiting a final decision.” (213) Or,
alternatively, as one ICSID award put it, “provisional measures will
only be appropriate where a question cannot await the outcome of
the award on the merits.” (214) (In contrast, and unwisely, the 2006
revisions to the UNCITRAL Model Law omit any reference to
urgency. (215) )
page "1986"
As already noted, the “urgency” requirement is closely-related to the

“serious harm” requirement: just as relief prior to a final award is
generally not ordered, save to prevent serious damage from
occurring during the course of the proceedings, so pre-award relief is
generally not ordered until such time as it is necessary to prevent
such serious damage from taking place. If the possibility of such
damage remains contingent, or capable of being avoided or
mitigated in other ways, tribunals should generally not intrude into
the parties' relations. (216) Where the risk of damage is “urgent,”
however, international practice is to grant provisional relief (provided
that other applicable requirements are satisfied). (217)
As with the requirement of “irreparable” harm, the “urgency”

requirement is not interpreted literally or mechanically. Tribunals
typically do not delay granting provisional measures until dire
consequences are only days away, but rather take a realistic
commercial view of the likelihood that serious damage will occur
prior to the end of the arbitral proceedings. (218) As one award
explained, “[a] measure is urgent where action prejudicial to the
rights of either party is lik ely to be taken before such final decision
is taken.” (219) If this possibility is conditional on other page
"1987" circumstances (e.g., the outcome of third-party
negotiations, court decisions, etc.), the tribunal will grant relief
based on its assessment of the likely course of future events and its
own ability to grant effective relief in the future (if the relevant
conditions materialize). (220)
iii. No Prejudgment of the Merits
455
Third, it is often said that provisional measures must not “prejudge

the merits” of the parties' underlying dispute. (221) That is, “an
arbitral tribunal must refrain from prejudging the merits of the case.”
(222)
It is unclear precisely what this requirement means: in particular,

does it argue against the tribunal making a decision that might
prejudice or bias its final decision on the merits, or does it argue
against the tribunal granting the same relief that is requested on the
merits? As to the former, it is very unclear why any decision on
provisional measures ever need “prejudge the merits.” (223) As a
provisional decision, subject to alteration at any time and to
revocation in the final award, the outcome of a provisional measures
application should not as a technical matter prejudge or
predetermine the final award. (224) Even in cases where a tribunal
considers the likelihood that the claimant's case will succeed (see
below), that consideration is only preliminary and in no way a final
determination on the merits; it in no way constitutes res judicata in
the final award and should in no way prejudge the merits.
As to the argument that provisional measures should not grant the

relief sought in the final award, (225) this too is overstated. There
may well be cases where the page "1988" requested provisional
measures seek – on a provisional basis during the pendency of the
arbitration – precisely the same relief requested in the final award
(e.g., continuation of a long-term contract, notwithstanding a
purported termination; preservation of ownership/control rights in
property). Whether termed “preservation of the status quo” or
otherwise, this sort of relief can well grant one party, on a provisional
basis during the pendency of the arbitration, almost exactly what it
seeks in the final award. This should not, however, prevent the
granting of provisional measures.
Properly analyzed, the “no prejudgment” requirement stands for the

fairly basic, but nonetheless important, propositions that (a) a grant
of provisional measures may not preclude the tribunal from
ultimately deciding the arbitration in any particular manner after the
parties have presented their cases (e.g., provisional measures
should not make it more difficult to render a decision in favor of one
party or the other); (b) provisional measures have no res judicata or
similar preclusive effect with regard to a decision on the merits; (c) a
tribunal must take care to ensure that it does not, in considering and
deciding an application for provisional measures, even partially close
its mind to one party's submissions or deny one party an
opportunity to be heard in subsequent proceedings; and (d) the
same relief that is sought as final relief may ordinarily be issued on
a provisional basis, subject to later revision (although it may also be
issued as partial final relief prior to a final award). (226) As noted
above, the “no prejudgment” requirement does not mean that a
tribunal may not consider and decide upon the likely prospects of a
claim (e.g., whether the claimant has presented a prima facie case?
which party preliminarily appears more likely to prevail?). Rather, a
tribunal is entirely free to take such matters into account, provided
456
34
that the arbitrators do not in any way close their minds to the
parties' subsequent submissions nor accord the provisional
measures decision any preclusive effect.
iv. Prima Facie Case or Probability of Success on Merits
Fourth, some tribunals and commentators have held that the party
requesting provisional measures must demonstrate a prima facie
case on the merits of its claim (or, in other formulations, a
probability of prevailing on its claim). (227) As formulated by one
award:
page "1989"
“The present Arbitral Tribunal is not a referee

jurisdiction, but a jurisdiction of the merits seized of
provisional measures. … The powers of the merits
ruling provisionally are not limited like those of the
referee judge and a serious dispute does not prevent a
broader appreciation, although on a provisional basis,
of the respective arguments of the parties.” (228)
At the same time, other awards and commentators have refused to

consider whether one party (or both parties) have stated a prima
facie case, (229) sometimes saying that this conflicts with the
requirement that provisional measures not prejudge the merits of the
tribunal's final award. (230)
page "1990"
The better view is that an arbitral tribunal should consider the prima
facie strength of the parties' respective claims and defenses in
deciding whether to grant provisional measures. As already
discussed, an assessment of the existence of a prima facie case
does not prejudge the merits of the case: it is a purely provisional
assessment based upon incomplete submissions and evidence,
without preclusive effects. (231)
Further, it is essential for a tribunal to assess the existence of a

prima facie case in order to make rational and commercially-
sensible decisions regarding provisional measures. For example, if a
claimant licensee has failed to present a prima facie case of
wrongful termination of a license agreement, while the respondent
licensor has presented a comprehensive defense as to why it was
contractually entitled to terminate, then a tribunal should be quite
hesitant to order the respondent licensor to continue to permit use of
licensed property and to supply updates and similar assistance on a
provisional basis during the pendency of the arbitration. In such
circumstances it would only be a rare case, involving very strong
showings of an urgent risk of grave and irreparable damage to the
claimant, that provisional measures should be ordered. Conversely,
if the claimant licensee has advanced a very thorough case as to
wrongful termination, countered by no serious argument or evidence
457
from the respondent licensor, provisional measures should be much

more readily granted.
In both the foregoing cases, the tribunal's decision on provisional

measures may quite properly consider the legal sufficiency and
strength of the parties' respective cases. This is the approach to
provisional measures in domestic judicial proceedings in many
developed legal systems. (232) It is also a commercially-sensible
basis for issuing provisional measures. It makes very little sense to
“protect” one party, by requiring the adverse party to continue
providing goods, services, or licensed property during the pendency
of the arbitration, if there appears to be little page "1991"
prospect that the “protected” party will prevail in a final award: in
fact, a grant of provisional measures in these circumstances does
not amount to “protection,” but rather an unjustified windfall that
damages an innocent party.
Furthermore, in cases where a party seeking provisional measures

has made a credible, but no stronger, case of serious harm, during
the course of the arbitral proceedings, then consideration of the
merits of the case appears both appropriate and sensible. In such
circumstances, the real issue is how interim damage arising during
the arbitral proceedings (and the risks of such damage) should be
allocated pending a final decision in the arbitration that will
determine the parties' rights. This allocation of interim damage is
necessary precisely because the tribunal's final determination is not
yet known; if the final determination were known, then the proper
allocation of interim damage could be made. Given this, it is entirely
appropriate for a tribunal to consider – recognizing that it is not
making a decision, but instead a preliminary prediction based on
partial submissions – the possible outcomes of a final award.
Indeed, it would in many respects be both irrational and unjust not to
do so: it would result in parties that have conducted themselves
entirely appropriately, and that have thoroughly rebutted implausible,
defective and/or unsupported claims, being required to act (prior to
any arbitral award) as if they had no defense to claims against them.
v. Jurisdiction
It is also sometimes said that a tribunal requires jurisdiction in order

to be able to issue provisional measures. (233) This statement
requires elaboration. In fact, a tribunal is able to issue provisional
measures notwithstanding the existence of a jurisdictional challenge
and notwithstanding the fact that the tribunal has not ruled on this
challenge. (234)
page "1992"
Thus, arbitral tribunals have not infrequently ordered provisional relief

notwithstanding the existence of an unresolved (and therefore
possibly well-founded) jurisdictional challenge. One commentary
cited “the well-settled position in international adjudication … that an
international tribunal may decide on provisional measures prior to
458
36
establishing its jurisdiction over the dispute if it appears that there

is, prima facie, a basis for asserting such jurisdiction.” (235) Other
arbitral awards have also considered whether there is a prima facie
jurisdictional basis. (236) Commentary is to the same effect. (237)
Of course, if a tribunal concludes that a jurisdictional challenge is

well-grounded, then it will lack any authority to maintain its previous
provisional measures. Until such a determination, however, the
tribunal's provisional measures are entitled to the same force as its
directions regarding conduct of the arbitration.
page "1993"
d. Tribunal's Discretion Regarding Type of Provisional

Measures
Assuming that the general criteria for granting provisional measures

are satisfied, then tribunals often say that they have substantial
discretion in selecting and ordering appropriate provisional relief.
According to one commentator, “arbitral tribunals have very wide
discretion in determining the appropriate measure.” (238) Or, “[i]n
international arbitration, there are no clear guidelines to the types of
relief available or when they should be granted.” (239)
It is unclear what these statements mean. The granting of

provisional measures is not a “discretionary” or arbitrary exercise,
but must instead conform to principled standards and the evidentiary
record. Although the standards applicable to the granting of
provisional measures continue to develop, it is wrong to treat the
subject as a matter of discretion, and not of legal right. (240)
e. Differing Standards for Provisional Measures for Different

Categories of Relief
In practice, a wide variety of different types of provisional measures

are commonly encountered in international arbitration. For the most
part, and as detailed below, developed legal systems and
institutional rules provide for the same general categories of
provisional measures.
The standards discussed above for granting provisional relief should

be considered in the context of each of these specific types of
provisional measures. Both in practice and analytically, the type of
provisional relief that is at issue can affect significantly the precise
showing required for granting provisional relief. Indeed, it is important
to avoid mechanically transposing standards adopted for one form of
provisional measures to other types of relief.
In principle, the forms of provisional relief available in international

arbitration are very broad, constrained only by the requirements that
provisional measures be directed towards parties to the arbitration
(not non-parties) (241) and not exceed any limits in applicable
459
37
national law (242) or the parties' arbitration agreement. (243) Subject

to these limits, the types of provisional relief that may be granted by
an international arbitral tribunal generally extend to any measures
which serve to preserve or protect one of the parties' rights, the
tribunal's jurisdiction, or the subject matter of the page "1994"
arbitration, pending the ultimate resolution of the dispute. (244) Any
relief that is calculated to serve such ends are, presumptively, within
a tribunal's power to order. (245) This is confirmed, among other
things, by the 2006 revisions to the UNCITRAL Model Law. (246)
i. Orders Preserving Status Quo
One common form of provisional relief is an order preserving the

status quo between the parties (or, alternatively, preserving specified
contractual or legal relations or factual circumstances). (247) For
example, a party may be ordered not to take certain steps –
terminating an agreement, disclosing trade secrets, calling a letter
of credit, or using disputed intellectual property – pending a decision
on the merits. (248) Alternatively, a tribunal may order the parties
generally not to take steps that alter the contractual status quo.
(249) In some cases, a party may seek restoration of a status
page "1995" quo ante, to the state of affairs immediately
preceding notice of the parties' dispute or the commencement of the
arbitration. (250)
According to some authorities, the prime examples of interim

protection are “measures that serve to preserve the status quo until
the final decision on the merits is rendered (preservation order).”
(251) In one classic formulation, “[p]rovisional measures, as a rule,
aim at avoiding or preventing a modification of the state of facts or
law of the subject matter of the dispute which could render more
difficult or impossible later performance.” (252) This principle has
been applied with particular force in the context of ICSID and
bilateral investment treaty arbitrations, although the same analysis
applies in other contexts. (253)
page "1996"
Orders preserving the status quo can be issued either to protect one
party from harm during the arbitral proceedings or to preserve the
tribunal's jurisdiction. One commentator thus refers to “[p]rotective
orders maintaining the status quo: Their purpose is to prevent factual
changes that would undermine the enforceability of the eventual
award.” (254) Or, as one arbitral award concluded, “interim measures
… were required to protect the subject matter of the dispute and to
regulate the conduct of and the relations between the parties as
partners in disagreement, pending resolution of their dispute.” (255)
Other tribunals have emphasized that provisional measures
preserving the status quo are appropriate to protect a party from
serious harm arising during the course of the proceedings. (256)
460
38
page "1997"
Arbitral tribunals have been particularly willing to issue provisional

measures maintaining the status quo in order to protect the subject
matter of the dispute (e.g., preservation of disputed property, deposit
of property with custodian for safekeeping, inspection, or sampling).
(257) One ICSID award reasoned:
“an example of an existing right [justifying provisional

measures] would be an interest in a piece of property,
the ownership of which is in dispute. A provisional
measure could be ordered to require that the property
not be sold or alienated before the final award of the
arbitral tribunal. Such an order would preserve the
status quo of the property, thus preserving the rights of
the party in the property.” (258)
Few decisions or commentators carefully consider the question of

what it means to preserve the “status quo.” Most importantly,
questions arise as to whether the “status quo” refers to the status
quo prevailing at the time (a) provisional relief is granted, (b)
provisional relief is requested, (c) the arbitration is commenced,
(259) or page "1998" (d) the parties' dispute arises. (260)
Obviously, there can be an enormous differences in the results of
preserving the “status quo,” depending on which of these dates is
selected. For example, a dispute may arise over a contract, leading
to threats of termination, followed by commencement of an
arbitration, and in turn followed by notice of termination and,
eventually, a request for interim relief: what status quo should the
tribunal then preserve? Arbitral awards seldom address the issue.
The appropriate analysis is not to attach decisive importance to the

state of affairs at the time of either a request for arbitration or a
request for interim relief. Rather, tribunals should look to the relative
injury that is likely to be suffered by both parties, respectively,
during the course of the arbitral proceedings, as well as the
existence of prima facie claims and defenses on the part of each of
the parties. If one party has a strong prima facie case on the merits
and faces serious injury during the course of the proceedings, while
the other party has not demonstrated a prima facie defense, the
tribunal should be fully prepared to order restoration of the status
quo prevailing when the parties' dispute arose. Doing so
accomplishes justice between the parties and is entirely consistent
with the tribunal's jurisdictional authority. (261)
The generally-applicable standards for issuance of provisional

measures apply with few exceptions to requests for preservation of
the status quo. In considering such requests, tribunals usually
consider the risk of serious or irreparable harm, urgency, lack of
prejudgment and (sometimes) existence of a prima facie case. (262)
ii. Orders Prohibiting Aggravation of Parties' Dispute

461
One type of provisional measure preserving the status quo is an

order prohibiting actions that would aggravate or exacerbate the
parties' dispute. (263) Such orders may be directed towards
forbidding public statements (potentially in breach of confidentiality
obligations (264) ) or interference with contractual performance.
The principle that an arbitral tribunal may take steps to prohibit

aggravation of a dispute is well-described in the order of one arbitral
tribunal: “As held by several ICC awards, provisional measures may
be ordered not only in order to prevent irreparable damage but also
to avoid aggravation of the dispute submitted page "1999" to
arbitration.” (265) The principle has been stated authoritatively by an
ICSID tribunal as follows, “[t]he parties to a dispute over which ICSID
has jurisdiction must … refrain from any action of any k ind which
might aggravate or extend the dispute.” (266)
Arbitral tribunals have not infrequently issued orders forbidding

aggravation of the parties' dispute. In Amco v. Indonesia, the tribunal
referred to “the good and fair practical rule, according to which both
parties to a legal dispute should refrain … to do anything that could
aggravate or exacerbate the same, thus rendering its solution
possibly more difficult.” (267) Another award required that the parties
“shall not commit any act of whatever nature, that might aggravate or
extend the dispute.” (268)
page "2000"
When orders of this nature (aimed at preventing aggravation of the

parties' dispute) are concerned, tribunals typically do not require the
same showings of serious harm and urgency that apply in other
contexts. Rather, tribunals appear to base their decisions more
generally on the commercial desirability of stopping (or inhibiting)
unilateral steps by the parties to improve their respective positions in
the dispute. Thus:
“There is a tendency on the part of many arbitral

tribunals, … consistent with the view that they often
have of their mandate, to construe the requirement of
urgency sufficiently broadly to justify interim measures
designed not so much to prevent irreparable harm as
to avoid the ‘aggravation' of the dispute that is the
subject matter of the arbitration.” (269)
The standards applicable to orders forbidding aggravation of the

status quo cannot necessarily be transposed to other contexts:
such orders derive as much from a tribunal's general authority to
manage the dispute resolution process and prevent unnecessary
damage to the parties and any disputed property, (270) as from
considerations about safeguarding a party from specific damage.
iii. Orders Requiring Specific Performance of Contractual or

Other Obligations
462
Arbitral tribunals frequently order what common law practitioners

refer to as “specific performance,” requiring a party to perform
specified acts pursuant to a pre-existing contractual or other legal
obligation. In some institutional rules, such orders qualify as
ordering “on a provisional basis … any relief which the Arbitral
Tribunal would have power to grant in an award.” (271) For example,
a party may be ordered to continue to perform contractual
obligations (e.g., shipping products, providing intellectual property)
or to ensure the claimant's enjoyment of its rights (e.g., voting
shares in compliance with a shareholders agreement). (272)
page "2001"
One commentator describes such orders as entailing “interim

specific performance of the contract (as when, for example, in a
dispute relating to the termination of a charter party, the court
prohibits any use of the vessel not in accordance with the charter).”
(273) Exercising such authority, one ICC tribunal ordered that “it is
essential, until the final award on all the claims and counterclaims,
that the contractual provisions agreed between the parties keep
producing all their effects…” (274) Commentary questioning the
legitimacy of orders granting specific performance (discussed below)
is ill-considered; (275) such relief is a vital remedial device in
international commercial arbitration.
iv. Orders Requiring Security for Underlying Claims
One type of frequently-ordered provisional relief is for a party to

provide security for the counter-party's underlying claims. (276) This
sort of order is designed to ensure page "2002" that a party's
substantive claim is, although well-founded, not rendered nugatory
because of deterioration in the financial condition of its counter-party
or by deliberate diversion of assets. As noted above, one type of
provisional relief aimed at securing property or funds that is typically
not available from an arbitral tribunal is an “attachment,”
denominating an order that a third party refrain from transferring
disputed property. (277)
Some national laws deny arbitral tribunals the authority to issue

security orders. (278) Likewise, some tribunals have been reluctant
to grant provisional measures of this character:
“the creditor's normal impatience to see his claim

satisfied or at least secured, or the normal risk that
the debtor's ability to pay his debts might deteriorate
in the course of the proceedings, are not sufficient to
justify provisional payment or security measures. In
the absence of factual circumstances which call for an
urgent remedy against the foreseeable risk of an
aggravation of the situation, provisional payments and
providing security in view of the final award fall outside
the scope of provisional and protective measures….”
463
(279)
These views appear unduly restrictive. Requests for security involve

one of the purest efforts to allocate the risks of the delay of arbitral
proceedings. Essentially, the issue in such matters is who should
bear the risk (and the financial cost of mitigating such risk) that a
party will be unable to satisfy the financial obligations of the final
award.
page "2003"
In these circumstances, it is important to recall that parties agree to

arbitration in part to obtain a speedy, efficient resolution of their
dispute. (280) With this background, it is inappropriate to be
demanding with regard to evidence of a party's precarious or
unsatisfactory financial condition: so long as there are reasonable
grounds for believing that a party's financial condition is inadequate
or will deteriorate during the course of the arbitral proceedings,
putting its ability to satisfy a final award into jeopardy, a tribunal is
justified in ordering security (subject to the other requirements
concerning urgency, prima facie case, and the like). It is
appropriate, in exercising such authority, for a tribunal to take into
account the parties' respective cases, and to order security more
liberally with regard to claims that appear (provisionally) well-
grounded.
v. Orders Requiring Security for Legal Costs (281)
A related form of provisional relief involves orders for security for legal
costs, often termed “security for costs” (as opposed to security for
underlying substantive claims). These orders require one party (or
both parties) to post security to cover the likely amounts that would
be awarded to the counter-party in the event that it prevailed in the
arbitration and was entitled to recover its legal costs. (282)
Courts in some Model Law jurisdictions have held that Article 17

does not grant the arbitral tribunal authority to order security for
costs. (283) This form of relief is nonetheless common in arbitrations
with their seat in England or Commonwealth jurisdictions.
Security for costs is expressly provided for by the English Arbitration

Act, 1996, (284) and some other common law arbitration legislation,
(285) as well as in the page "2004" LCIA Rules (and a few other
common law-oriented institutional rules). (286) Further, some
tribunals have concluded, even under institutional rules that make no
express provision for security for costs orders, that they have the
authority to provide such relief. (287) Other tribunals (typically
without English or Commonwealth orientations) have refused to order
security for costs absent an express agreement by the parties
permitting such provisional measures. (288)
Where security for costs may be ordered, tribunals typically

464
consider the financial state of the party from whom security is

requested, the extent to which third parties are funding that party's
participation in the arbitration (while arguably remaining insulated
from a final costs award) and the likely difficulties in enforcing a final
costs award. (289) Where a party appears to lack assets to satisfy a
final costs award, but is pursuing claims in an arbitration with the
funding of a third party, then a strong prima facie case for security
for costs exists. (290) It is doubtful that the likelihood of a party's
success on the merits plays a significant role in determining
whether it is appropriate to order security for costs.
Outside of English and some Commonwealth jurisdictions (where

security for costs orders are a usual feature of litigation in local
courts), arbitral tribunals have been hesitant to make security for
costs orders. (291) Tribunals often conclude that the burden imposed
by a security for costs order on a party may interfere unduly with its
opportunity to be heard, particularly in instances where the party
may lack the financial means to post the required security.
page "2005"
It is relatively clear that parties may not, under most developed

arbitration legislation, (292) apply to national courts (rather than the
arbitrators) for orders granting security for costs. Prior to the 1996
English Arbitration Act, English courts would entertain such
applications, in very limited circumstances, (293) but the Act
eliminated this judicial authority. (294) Courts in other countries have
refused to entertain applications for security for costs of an
arbitration. (295)
vi. Orders for Preservation or Inspection of Property
Another form of provisional relief involves orders for the preservation

or inspection of property (typically for evidentiary purposes). (296)
Such orders can include the appointment of a neutral third person
charged with taking specified actions. For example, an independent
expert can be appointed to inspect goods or other property and
provide a factual report about its condition. (297)
page "2006"
Properly understood, interim relief of this sort often involves little

more than a tribunal's authority to ascertain the facts of the case
and oversee the procedural conduct of the arbitration, including
disclosure and the taking of evidence. (298) Thus, notwithstanding
the (mis-)characterization of the 2006 revisions to the Model Law,
(299) an order requiring preservation or production of materials for
evidentiary purposes cannot usefully be understood as “provisional”
relief: such an order does not require one party to take particular
action, subject to subsequent revision in a final award, but instead
simply gives directions regarding disclosure and evidentiary matters
465
43
as part of the tribunal's fact-finding process. (300)
With regard to orders for the sampling, it makes little sense to

consider matters of urgency, irreparable harm, or prejudgment of the
merits. (301) Rather, the relevant inquiries are whether the materials
in question appear relevant to the issues that are in dispute and
properly (or potentially) subject to disclosure under the parties'
arbitration agreement and any applicable procedural rules. (302) A
tribunal should be alert to (inappropriate) efforts by one party to
attempt unilaterally to pre-empt an orderly disclosure process, (303)
but it need not apply the same standards to requests for
preservation or inspection of evidence as it would to requests for
continued performance of a contract or posting of security. (304)
A different question is presented where a tribunal is asked to order

the sale or detention (for non-evidentiary purposes) of property. (305)
In some cases, such requests are made simply to mitigate loss
arising from the pendency of the arbitration that would fall
symmetrically on both parties – as in the case of the sale of
perishable goods, which would otherwise become valueless. In
these instances, a tribunal should generally order commercially-
reasonable actions, without inquiry into issues of serious harm to
one party or into the prima facie merits of the parties' claims, in
order to minimize the overall losses resulting from the parties'
dispute.
In other cases, parties seek the detention of goods because of

disputes over their ownership. Here, different standards are
appropriate, because the allocation of loss/hardship during the
arbitral proceedings is asymmetric (i.e., only one party page
"2007" will be the legitimate owner). In such cases, a tribunal
should only intrude into the parties' contractual dealings after
inquiring into issues of serious harm to one party and the prima
facie merits of the parties' claims. (306)
vii. Enforcement of Confidentiality Obligations
It is not uncommon for commercial agreements to include

confidentiality provisions, aimed at safeguarding one or both parties'
commercial, financial, or other confidences. Moreover, as discussed
below, either arbitration agreements or national laws frequently
impose confidentiality obligations on parties with regard to the
materials produced in the arbitration. (307) Damages are seldom a
satisfactory remedy for breach of such confidentiality obligations,
because of difficulties in establishing causation and directness. It is
therefore appropriate, and generally necessary, for tribunals to issue
provisional measures ordering compliance with confidentiality
obligations, particularly with regard to obligations to maintain the
confidentiality of the arbitral process itself.
viii. Orders for Interim Payment

466
A largely sui generis type of provisional measure involves orders or

awards for interim payment of amounts claimed. Provisional
measures of this nature differ materially from other types of
provisional relief in that they prejudge the merits of the parties'
dispute, by granting what amounts to a partial, final award for
essentially indisputable sums due. Indeed, a partial award of
indisputable amounts should not, strictly speaking, be considered a
provisional measure; it is instead a partial award of final relief. (308)
Some arbitration legislation provides arbitral tribunals the authority to

grant partial awards of indisputable sums. That is the case under
§39 of the English Arbitration Act, 1996. (309) There would also
appear to be no obstacle in principle under the UNCITRAL Model
Law, or other legislation lacking specific reference to the possibility
of such awards, to an arbitral tribunal granting partial relief following
very rapid proceedings addressing a single issue.
In a few other jurisdictions, local law appears to leave courts with

authority to grant orders requiring interim payment of indisputable
amounts, notwithstanding the existence of an international
arbitration agreement. French and Netherlands law establish “référé-
provision” procedures, where local courts may order amounts that
page "2008" are not “seriously disputable” to be paid following a
summary procedure. (310) French courts have also held that the
parties' agreement to arbitrate does not, without more, exclude
resort to French courts for the “référé-provision” procedure. The
French Cour de cassation reasoned:
“since the existence of an arbitration agreement does

not exclude the jurisdiction of the court, who had in
fact established the urgency of the situation, to order a
provisional payment in favor of a creditor whose claim
was not seriously disputable, the Court of Appeals
rightly rejected the argument that the court lacked the
jurisdiction to do so.” (311)
Despite this, where an international arbitration agreement exists,

French courts will only grant relief under the “référé-provision”
procedure if the arbitral tribunal has not yet been constituted (312)
and if there is an urgent need for such relief. (313)
Insofar as the référé-provision procedure involves a final judgment or

payment order, or a determination of the parties' underlying dispute,
it is contrary to the parties' arbitration agreement and the New York
Convention. That is because the resolution of the parties' dispute
and granting of final relief are, under the agreement to arbitrate, for
the arbitrators, not a national court. (314) If the référé-provision
procedure produces only a provisional order, subject to arbitral
revision, then it can be regarded as an acceptable form of provisional
relief, but even then, care must be taken not to prejudge the parties'
dispute.
467
ix. Antisuit Orders
Finally, a particularly delicate form of provisional measure involves

so-called “antisuit” orders. As discussed above, this sort of order is
typically requested (and ordered) where one party seeks to pursue
litigation outside the contractual arbitral page "2009" forum, in
violation of the parties' arbitration agreement. (315) An antisuit
injunction is directed against a party to the arbitration, not
technically against a national court; the injunction forbids the party
from taking steps that would violate its contractual obligations (e.g.,
pursuing litigation in breach of its agreement to arbitrate or pursuing
litigation that would unacceptably affect the status quo ante or the
subject matter of the dispute). This sort of relief is related to similar
injunctions issued by some national courts, which forbid a litigant
from commencing or pursuing specified legal proceedings in another
jurisdiction. (316)
Antisuit injunctions are controversial when issued by national courts,

because they arguably involve the courts of one nation interfering
with the sovereign, judicial processes of another nation. (317) Such
relief is even more controversial in the case of arbitral tribunals,
which are constituted by private agreement and lack the sovereign
authority of a national court.
Some commentators have concluded that arbitral tribunals have, and

should be prepared to exercise, the power to order a party not to
pursue litigation in breach of its agreement to arbitrate. (318)
Consistent with this view, arbitral tribunals have sometimes issued
orders forbidding a party from proceeding with or commencing
litigation in a national court. (319) As the Iran-U.S. Claims Tribunal
has reasoned, an arbitral tribunal has “inherent power to protect its
own jurisdiction in cases where the risk of inconsistent decisions in
parallel and duplicative proceedings instituted page "2010" in
other fora have rendered this necessary.” (320) Where parties to
national court litigation differ from the parties to the arbitration
agreement, an antisuit injunction will ordinarily be unavailable. (321)
There should be little doubt that arbitral tribunals in principle have

the power to issue antisuit injunctions. (322) In particular, this sort of
relief is appropriate to preserve the tribunal's jurisdiction – for
example, where a party seeks through litigation to dispose of the
subject matter of the dispute or to otherwise pre-empt the tribunal's
jurisdiction. Nonetheless, it is for obvious reasons a delicate
authority that should be exercised with special care and restraint.
f. Relevance of Prior Consideration of Provisional Measures by

National Courts
As discussed below, national courts also generally have the power

to issue provisional measures in connection with a dispute that is
subject to arbitration (particularly prior to constitution of the arbitral
468
46
tribunal). (323) In cases where this occurs, questions arise as to the

relevance of national court decisions either granting or denying
provisional measures for subsequent arbitral proceedings concerning
requests for similar provisional relief. (324)
Some arbitral tribunals have concluded that an earlier national court

decision granting (or denying) provisional measures is either binding
on a tribunal considering the same request or, alternatively, entitled
to a high degree of deference. According to one tribunal, it would be
“very serious” to order the parties to modify a provisional measure
previously ordered by a national court, and the tribunal therefore
declined to do so. (325) Another tribunal concluded flatly that it was
“not competent to lift such sequestration [of property ordered by a
national court] or to order the defendants to renounce it.” (326)
page "2011"
In principle, these decisions (or at least their rationales) are

misconceived. A national court's decision regarding provisional
measures should not be regarded as res judicata in subsequent
arbitral proceedings: the national court applies its own law, often
taking into account the exceptional nature of court-ordered
provisional measures in connection with an arbitration, rather than
applying international standards. (327) In these circumstances, the
national court's provisional decision should not necessarily be
considered as binding in an application for the same or similar
provisional measures in the parties' contractual arbitration forum.
Nor should a tribunal necessarily give substantial weight to a

national court's consideration and resolution of a request for
provisional measures. Properly understood, a national court's
decision on provisional measures should be regarded as supportive
of the arbitral process, available in circumstances where an arbitral
tribunal is unable to act, but subject to subsequent decisions of the
arbitral tribunal; this accords with the arbitral tribunal's authority to
conduct the dispute resolution process and finally resolve the
parties' dispute. (328)
Of course, an arbitral tribunal should take into account the record

and analysis of a national court which, ideally, would reach similar
results to those of the tribunal. Equally, an arbitral tribunal may
conclude that a party which has chosen to seek interim relief from a
national court, and failed, is estopped from seeking the same relief
from the tribunal. (329) But, where an arbitral tribunal concludes that
provisional page "2012" measures are (or are not) necessary, a
contrary national court decision should not cause the tribunal to
alter its conclusion. (330)
g. Form of Provisional Measures: Order or Award
Assuming that a tribunal concludes that provisional measures are

appropriate, questions arise as to what form such measures should
469
47
take. In principle, provisional measures can be granted as either an

order or an award. (331) Additionally, a tribunal can “invite” or
“recommend” that parties comply with specified directions. (332) A
tribunal generally has discretion in deciding upon the form of its
provisional measures, although that discretion must be guided by
the objective of achieving the ends aimed at by the provisional
measures. (333)
page "2013"
Typically, an order can be issued more promptly than an award. An

order is ordinarily accompanied by fewer formalities than an award
(e.g., a less extensive text and statement of reasons, sometimes
signed by only the presiding arbitrator); moreover, in some
institutional arbitrations (e.g., ICC), an award requires internal
scrutiny by the administering institution, while an order does not.
(334) For these reasons, an order can usually be issued more
promptly than an award (and, therefore, if complied with, can have
greater prospects for preventing damage, or further damage, to the
party seeking relief).
In contrast, provisional measures issued in the form of an interim

award may enjoy greater enforceability in national courts, as
compared to an order. Thus, some arbitration legislation and
national court decisions hold that an order is not an “award” for
purposes of the New York Convention (and national arbitration
legislation), and therefore does not benefit from the Convention's
guarantees regarding the recognition of foreign arbitral awards. (335)
On the other hand, other arbitration statutes provide, or judicial
decisions hold, either that orders granting provisional measures are
enforceable to the same extent as interim awards of provisional
measures (336) or that interim “awards” of such measures are also
not enforceable. (337)
Some tribunals seek “the best of both worlds,” by issuing provisional

measures as an order, followed by a subsequent award. (338) This
approach endeavors to provide immediate relief (via an order), as well
as maximally-enforceable relief (via an award). There is no reason
that a tribunal may not take this course, particularly where there are
concerns regarding compliance with its provisional measures. In any
event, the tribunal's grant of provisional measures should ordinarily
be addressed page "2014" to the parties in mandatory, not
optional terms, as an order or direction, rather than a
recommendation. (339)
h. Security as Condition for Provisional Relief
The grant of provisional measures is sometimes conditioned upon

the posting of security by the party requesting such measures, to
preserve the adverse party's ability to recover damages resulting
from provisional measures that prove to have been wrongfully
470
48
requested. For example, if a party successfully obtains provisional

measures forbidding its counterparty's sales of a product, or use of
intellectual property, it may be required to post security sufficient to
cover monetary damages claims for lost sales or profits.
Some national laws expressly provide for the ordering of security by

an arbitral tribunal. (340) Leading institutional rules are generally
similar. (341) Even in the absence of such express authorization, an
arbitral tribunal's power to order provisional measures clearly
subsumes the authority to impose requirements for posting security.
(342) A tribunal's authority should also extend to the consideration of
damages claims to be satisfied from any security fund, for losses
resulting from conduct required pursuant to an order for provisional
measures (including where such order is granted by a national
court). (343)
i. Sua Sponte Provisional Measures
Some national arbitration statutes expressly provide that provisional

measures are only permitted upon the application of a party to the
arbitration (i.e., the arbitral tribunal may not issue provisional
measures sua sponte). For example, Article 17 page "2015" of
the UNCITRAL Model Law provides that provisional measures may
be issued “at the request of a party,” (344) while Article 183(1) of the
Swiss Law on Private International Law provides that an arbitral
tribunal may order provisional measures “on motion of one party.”
(345) Institutional rules are generally similar. (346) The requirement
that a party affirmatively apply for provisional measures implies that
such relief is capable of being waived (or subject to defenses such
as estoppel).
j. Ex Parte Provisional Measures
It is not uncommon in national court proceedings for provisional

measures to be issued on an ex parte basis. This type of relief is
particularly appropriate where a party could suffer serious damage
simply through a single, rapidly-completed action by its counter-
party – for example, calling a letter of credit, transferring needed
security to third parties, or destroying critical evidence.
Despite its arguable practical utility, (347) there is substantial

controversy surrounding an arbitral tribunal's ex parte consideration
of a request for provisional measures. As discussed above, most
national laws and institutional arbitration rules guarantee all parties
an opportunity to be heard, as well as equality of treatment (348) –
and ex parte grants of relief run strongly counter to these
requirements. Some institutional rules go further, and appear to
expressly forbid ex parte provisional relief. (349) Many commentators
conclude that ex parte provisional relief is beyond the power of
arbitral tribunals. (350)
471
page "2016"
At the same time, some practitioners affirm the possibility of ex

parte provisional measures, (351) and the 2006 revisions to the
UNCITRAL Model Law expressly permit ex parte provisional
measures in limited circumstances. (352) The amendments (to
Article 17 of the Model Law) provide for “preliminary orders” that may
be applied for “without notice to any other party.” (353) Article 17B
and 17C provide that ex parte preliminary orders may be issued
where the arbitrators conclude that “prior disclosure of the request
for the interim measure to the party against whom it is directed risks
frustrating the purpose of the measure.” (354)
The 2006 revisions to the Model Law were controversial (355) and to
date no Model Law jurisdiction has incorporated them. Many
commentators have also questioned the wisdom and practicality of
the proposed revisions to Article 17, (356) and in practice, arbitral
tribunals are ordinarily unlikely to consider, much less grant,
provisional measures on an ex parte basis.
Although the subject is controversial, the better view is that the

revisions to Article 17, authorizing ex parte provisional measures
were ill-considered. It is of course correct that a tribunal can in rare
cases only truly grant both parties a full and effective opportunity to
be heard if it will entertain ex parte applications for interim relief. That
is because there are circumstances where not issuing relief on an
ex parte basis might make such relief ineffective (and thereby
effectively deprive the moving party of an opportunity to be heard).
On the other hand, the most fundamental objection to ex parte relief

in arbitration, as Article 17B of the 2006 Model Law contemplates, is
that it virtually never makes any sense or accomplishes any serious
purpose. The basic predicate for the extraordinary grant of ex parte
relief is that one party cannot be trusted to conduct itself in
compliance with its obligations, and must be legally compelled to
take particular (immediate) actions without any opportunity to evade
its obligation. Although this rationale has force in domestic litigation
contexts (e.g., when funds, which could be transferred abroad, can
be frozen), it has no real application where page "2017" an
arbitral tribunal cannot issue immediately-effective coercive relief
(e.g., attachment or garnishment of bank accounts).
As discussed above, an arbitral tribunal's orders have no direct

coercive effects (357) and therefore cannot accomplish the purpose
of ex parte relief. One could imagine that an ex parte order of
provisional measures might, if enforceable and not notified to the
respondent, be sometimes capable of effective use in a national
court enforcement proceeding. In fact, however, Article 17C
specifically prevents that, by requiring immediate notice of any
preliminary decision to all parties and providing that such decisions
are not enforceable. (358)
As a consequence, the only cases in which it makes any sense for

472
ex parte relief to be issued by an arbitral tribunal (e.g., when a party

must be given no chance to evade a binding order) are exactly those
in which Articles 17B and 17C fail to provide relief. At best,
therefore, Articles 17B and 17C are a non-functional appendage; at
worst, if ever used, which fortunately is unlikely, they will foster
distrust of the arbitral process and cause wasted expense.
If, contrary to the above analysis, provisional measures on an ex

parte basis are to be available, a tribunal should only grant such
measures in cases where they are clearly required in order to
prevent immediate and very grave damage that cannot otherwise be
avoided. Of course, a tribunal must in these circumstances
emphasize the moving party's obligation to fully disclose all matters
relevant to its application and must, after issuing any provisional
measures, immediately afford the affected party a full opportunity to
put its case. (359) It is also possible for a tribunal page "2018"
to order temporary restraints, pending its decision on a request for
provisional relief where both parties have an opportunity to be heard.
(360)
page "2019"
14 See infra pp. 1946-1974.

15 See infra pp. 1975-2019.
16 See infra pp. 2019-2066.
17 The arbitral tribunal's authority to order provisional measures is
often related to its power to grant injunctive relief. See infra pp.
2478-2479, 2480-2483.
18 Some commentators suggest that “it is now beyond question
that arbitrators have the power to grant interim and conservatory
measures.” Lew, Commentary on Interim and Conservatory
Measures in ICC Arbitration Cases, 11(1) ICC Ct. Bull. 23, 30
(2000). As discussed below, this generalization is overbroad:
although most developed jurisdictions and institutional rules grant
arbitral tribunals the power to issue provisional measures, there
remain important exceptions (including, for example, China, Italy
and Argentina). See infra pp. 1949-1951. Moreover, arbitrators only
have the power to grant provisional relief insofar as the parties have
not excluded that power. See infra pp. 1973-1974.
19 See supra pp. 58-63.
20 As discussed in detail below, some U.S. courts have interpreted
Article II of the New York Convention as forbidding the courts of
Contracting States from ordering prejudgment attachment. See infra
pp. 2030-2034. Those courts have not expressly held that the
Convention addresses the availability of provisional relief from
arbitrators, although the necessary implication of their analysis is
that arbitral tribunals generally do enjoy the authority to order
preliminary relief. An alternative result would produce the
473
unacceptable situation in which provisional relief was available

neither from a court nor an arbitrator.
21 See European Convention, Art. VI(4).
22 This aspect of the European Convention, and parallel provisions
of many national laws, is discussed below. See infra pp. 1972-1973,
2054-2055.
23 ICSID Convention, Art. 47. See also ICSID Arbitration Rules,
Rule 39 (“provisional measures for the preservation of its rights”).
24 C. Schreuer, The ICSID Convention: A Commentary Art. 47,
¶¶27-30 (2001); Schreuer, Non-Pecuniary Remedies in ICSID
Arbitration, 20 Arb. Int'l 325 (2004).
25 See, e.g., Occidental Petroleum Corp. v. Republic of Ecuador,
Decision on Provisional Measures, ICSID Case No. ARB/06/11 (17
August 2007), ¶58, available at http://icsid.worldbank.org (“The
Tribunal wishes to make clear for the avoidance of doubt that,
although Article 47 of the ICSID Convention uses the word
‘recommend,’ the Tribunal is, in fact, empowered to order provisional
measures. This has been recognized by numerous international
tribunals.…”); Tok ios Tok elés v. Uk raine, Procedural Order No. 1,
ICSID Case No. ARB/02/18 (1 July 2003), ¶4, available at
http://icsid.worldbank.org; Emilio Agustín Maffezini v. Kingdom of
Spain, Procedural Order No. 2, ICSID Case No. ARB/97/7 (28
October 1999), 16 ICSID Rev.-For. Inv. L.J. 207, ¶9 (2001).
The evolution of international conventions reflects more general

developments with regard to provisional measures in international
arbitration. This evolution progressed from the absence of any
reference to provisional measures in the Geneva Protocol and
Convention (1923 and 1927) and New York Convention (1958), to an
express recognition of court-ordered provisional measures and an
indirect acknowledgement of tribunal-ordered measures in the
European Convention (1961), to an express grant of power to arbitral
tribunals to consider requests for provisional measures in the ICSID
Convention (1965). As detailed below, this gradual recognition of the
role of provisional measures in international arbitration, and of the
authority of arbitral tribunals to grant such measures, parallels
developments in both national laws and practice. See infra pp. 1949-
1961, 1975-2019.
26 As discussed below, a few U.S. lower courts have at least

impliedly adopted this view of the Convention. See infra pp. 2030-
2042.
27 See supra pp. 202-205, 567-568, 655-658, 1265-1270, 1351,
1368-1376, 1690-1691, 1749-1751, 1765-1770.
28 As discussed above, the Convention should be construed to
impose limitations on a Contracting State's treatment of particular
categories of disputes or claims as non-arbitrable, requiring that
such categories be carefully-tailored to achieve specific, articulated
public policies and non-idiosyncratic. See supra pp. 530-535. A
general prohibition against the arbitration of any request for
provisional measures would contradict both of these principles,
474
52
particularly in light of the progressive abandonment of prohibitions

against tribunal-ordered provisional measures over the past several
decades. The evolution of these rules can properly be seen as a
classic example of the Convention's constitutional development. See
supra pp. 100-101, 509-510, 514.
29 See infra pp. 1949-1951.
30 See supra pp. 100-101, 509-510, 514, 530.
31 See infra pp. 1963-1964. The same rule would apply under
Article 1 of the Inter-American Convention. See supra pp. 103-105.
32 Choice-of-law issues concerning provisional measures are
discussed below. See infra pp. 1961-1964, 1976-1980.
33 In principle, if the arbitration agreement granted the arbitrators
the power to order provisional relief, legislation in the arbitral seat (or
elsewhere) which denied effect to that agreement would often be
contrary to the New York Convention. See supra pp. 1948-1949. In
those circumstances, an arbitral tribunal would be free, and indeed
obliged, to give effect to the parties' agreement.
34 As discussed below, issues also arise as to the enforceability of
tribunal-ordered provisional measures in national courts. See infra
pp. 2019-2066.
35 A. Redfern & M. Hunter (eds.), Law and Practice of International
Commercial Arbitration ¶7-13 (4th ed. 2004) (“antique domestic
legislation”).
36 Swiss Cantonal Concordat, Art. 26(1) (“The public judicial
authorities alone have jurisdiction to make provisional orders.”) &
Art. 26(2) (“However, the parties may voluntarily submit to provisional
orders proposed by the arbitral tribunal.”).
For an award giving effect to Article 26 of the Concordat, see Partial

Award in ICC Case No. 4998, 113 J.D.I. (Clunet) 1139 (1986).
CompareOrder No. 4 in Zurich Chamber of Commerce in Case No.
415 (20 November 2001), 20 ASA Bull. 467, 470 (2002) (“The
traditional view in Switzerland was that, lacking the parties' explicit
agreement to the contrary, a Swiss Arbitral Tribunal had no authority
to order security for a party's legal costs.… [T]he modern view
expressed in Swiss legal doctrine and arbitral practice is that the
authority granted to the arbitrators by Article 183 [of the Swiss Law
on Private International Law] also extends to orders requesting a
party to provide security for the opposing party's legal costs.”).
37 See Greek Code of Civil Procedure, Art. 685 (in force prior to
1999); German ZPO, §1036 (in force prior to 1998 adoption of
UNCITRAL Model Law); Spanish Arbitration Act, Art. 23; Austrian
ZPO, §593 (in force prior to adoption of UNCITRAL Model Law)
(“[The arbitrators] may not use enforcement measures or set fines
against the parties or other persons”). See also H. Fasching,
Schiedsgericht und Schiedsverfahren im österreichischen und
internationalen Recht 22 (1973); Hausmaninger, in H. Fasching,
Zivilprozessgesetze §593, ¶6 (2d ed. 2007); M. Rubino-
Sammartano, International Arbitration Law 345-65 (1990).
475
38 R. Schütze, D. Tscherning & W. Wais, Handbuch des

Schiedsverfahrens ¶44 (2d ed. 1990). It is sometimes suggested
that “public policy” considerations were the basis for the prohibition
against tribunal-ordered provisional measures. Lew, Commentary on
ICC Ct. Bull. 23, 24 (2000). There is little evidence suggesting some
sort of general public policy against tribunal-ordered provisional
relief, which would in any event be very difficult to sustain (i.e., if a
tribunal is competent to decide an issue finally, with binding effect,
why should it not be competent to decide the same issue
provisionally?).
40 Nor is there reason to think that disputes over provisional relief
involve issues that are not suited for the arbitral process. On the
contrary, requests for provisional measures involve the same sorts of
factual and legal issues that the parties' underlying disputes
concern. There is no basis for concluding that arbitrators are ill-
suited to resolve such disputes.
41 See supra pp. 72-86, 1022-1024.
42 See infra pp. 1951-1958, 1965-1971.
43 See infra pp. 1951-1958, 1973-1974.
45 See supra pp. 1776-1782.
46 See infra pp. 1973-1974.
47 Argentinean National Code of Civil and Commercial Procedure,
Art. 753 (“Arbitrators cannot order compulsory measures or
measures leading to enforcement. They must request them from the
judge who will have to lend the support of his jurisdictional powers
for the most swift and effective carrying out of the arbitral
proceedings.”); Italian Code of Civil Procedure, Art. 818 (“The
arbitrators may not grant attachment or other interim measures of
protection.”); Chinese Arbitration Law, Art. 68; Quebec Code of Civil
Procedure, Art. 940(4) (“A judge on the court may grant provisional
measures before or during arbitration proceedings on the motion of
one of the parties.”).
48 On the other hand, where parties expressly grant the arbitrators
the power to grant provisional measures, that authority should not be
negated by selection of the arbitral seat. This is an instance of the
specific prevailing over the general, supported by the obvious
practical desirability of conferring the power to order provisional
measures on the arbitral tribunal. See supra pp. 1943-1945, 1946-
1947 & infra pp. 2037-2042. See alsoMastrobuono v. Shearson
Lehman Hutton, Inc., 514 U.S. 52, 59-63 (U.S. S.Ct. 1995) (choice
of law clause “encompass[es] substantive principle that New York
courts would apply, but [does not] include arbitration law”); Preston
v. Ferrer, 128 St. Ct. 978, 988-989 (U.S. S.Ct. 2008) (“[T]he ‘best
way to harmonize' the parties' adoption of the AAA rules and their
selection of California law is to read the latter to encompass
prescriptions governing the substantive rights and obligations of the
parties, but not the State's ‘special rules limiting the authority of
476
arbitrators.’”).
49 UNCITRAL Model Law, Art. 17. See H. Holtzmann & J.
Neuhaus, A Guide to the UNCITRAL Model Law on International
Commercial Arbitration: Legislative History and Commentary 530-
533 (1989); Huntley, The Scope of Article 17: Interim Measures
under the UNCITRAL Model Law, 740 PLI/Lit. 1181, *69 (2005).
50 These limits are discussed below. See infra pp. 1965-1971.
51 See infra pp. 1968-1970.
52 See infra pp. 1977-1980, 2016-2019.
53 UNCITRAL Model Law, 2006 Revisions, Art. 17(1). See Foster &
Elsberg, Two New Initiatives for Provisional Remedies in
International Arbitration: Article 17 of the UNCITRAL Model Law on
International Commercial Arbitration and Article 37 of the AAA/ICDR
International Dispute Resolution Principles, 3(5) Transnat'l Dispute
Mgt (2006).
54 See supra p. 1952 & infra pp. 1968-1970.
55 Biwater Gauff (Tanzania) Ltd v. United Republic of Tanzania,
Procedural Order No. 3, ICSID Case No. ARB/05/22 (29 September
2006), available at http://icsid.worldbank.org (“it is now settled in
both treaty and international commercial arbitration that an arbitral
tribunal is entitled to … [order] provisional measure[s] (as, for
example, in Article 17 of the newly revised UNCITRAL Model Law
…”); Kastner v. Jazon [2004] EWCA Civ. 1599 (English Court of
Appeal); Coppee-Lavalin SA/NV v. Ken-Ren Chem. and
FertilizersLtd [1994] 2 All E.R. 449 (House of Lords); H. Holtzmann
& J. Neuhaus, A Guide to the UNCITRAL Model Law on International
Commercial Arbitration: Legislative History and Commentary 530
(1989).
56 See, e.g., Schwartz, The Practices and Experience of the ICC
Court, in ICC, Conservatory and Provisional Measures in
International Arbitration 45, 58 & n.42 (1993) (“in the absence of a
relevant provision of national law to the contrary, arbitrators have an
inherent or implied power, as arbitrators, to grant interim relief”); H.
Holtzmann & J. Neuhaus, A Guide to the UNCITRAL Model Law on
International Commercial Arbitration: Legislative History and
Commentary 530 (1989); Huntley, The Scope of Article 17: Interim
Measures under the UNCITRAL Model Law, 740 PLI/Lit. 1181, *72
(2005) (“The language of Article 17 itself recognizes that it is a non-
mandatory provision, and therefore the parties may choose to modify
the power of the tribunal to grant interim measures through an
agreement, but this status does not allow the parties to expand the
tribunal's authority”); Baker & Davis, Arbitral Proceedings under the
UNCITRAL Rules: The Experience of the Iran-United States Claims
Tribunal, 23 Geo. Wash. J. Int'l L. Econ. 267, 335-336 (1989); Wirth,
Interim or Preventive Measures in Support of International
Arbitration in Switzerland, 18 ASA Bull. 31, 32 (2000) (“whether
agreed or not between the parties, the arbitral tribunal has
competence to order interim measures”).
57 See infra pp. 1973-1974, 2020-2023.
58 See supra p. 1949 for a discussion of the Concordat and its
text.
477
59 Swiss Law on Private International Law, Art. 183. See Berti, in

S. Berti et al. (eds.), International Arbitration in Switzerland Art. 183
(2000); Sangiorgio, Der vorsorgliche Rechtsschutz in der
internationalen Schiedsgerichtsbark eit nach Art. 183 IPRG (1996);
Habscheid, Einstweiliger Rechtsschutz durch Schiedsgerichte nach
dem schweizerischen Gesetz über das internationale Privatrecht
(IPRG), IPRax 134 et seq. (1989).
60 Berti, in S. Berti et al. (eds.), International Arbitration in
Switzerland Art. 183, ¶¶1-13 (2000); B. Berger & F. Kellerhals,
Internationale und interne Schiedsgerichtsbark eit in der Schweiz
¶¶1136-1141 (2006).
61 See Swift Indus., Inc. v. Botany Indus., Inc., 466 F.2d 1125,
1134 (3d Cir. 1972) (parties' agreement did not authorize tribunal to
award provisional relief); Carolina Power Light v. Uranex, 451
F.Supp. 1044 (N.D. Cal. 1977) (dicta). See also Charles Constr. Co.
v. Derderian, 586 N.E.2d 992 (Mass. 1992) (AAA Rules held not to
permit tribunal-ordered provisional measures); Recyclers Ins. Group
Ltd v. Ins. Co. of Am., 1992 WL 150662 (E.D. Pa. 1992) (construing
arbitration clause as not granting authority to order interim relief).
62 See, e.g, Banco de Seguros del Estado v. Mut. Marine Office,
Inc., 344 F.3d 255 (2d Cir. 2003); Pacific Reins. Mgt Corp. v. Ohio
Reins. Corp., 935 F.2d 1019, 1022-1023 (9th Cir. 1991) (“Temporary
equitable relief in arbitration may be essential to preserve assets or
enforce performance which, if not preserved or enforced, may render
a final award meaningless”); Island Creek Coal Sales Co. v. City of
Gainesville, 729 F.2d 1046, 1049 (6th Cir. 1984) (absent contrary
provision in state law or parties' agreement, tribunal may award
interim injunctive relief); Sperry Int'l Trade, Inc. v. Gov't of Israel, 689
F.2d 301, 306 (2d Cir. 1982) (“Under New York law arbitrators have
power to fashion relief that a court might not properly grant”); Certain
Underwriters at Lloyd's, London v. Argonaut Ins. Co., 264 F.Supp.2d
926, 837 (N.D. Cal. 2003) (“There is no question that an arbitration
panel has the authority to require escrow to serve as security for an
ultimate answer [which] may be either derived explicitly from the
arbitration agreement or implicitly from the panel's power to ensure
the parties receive the benefit of their bargain”); Meadows Indem. Co.
Ltd v. Ark wright Mut. Ins. Co., 1996 WL 557513 (E.D. Pa. 1996);
Konk ar Maritime Enter., SA v. Compagnie Belge d'Affretement, 668
F.Supp. 267, 271 (S.D.N.Y. 1987); Compania Chilena De
Navegacion Interoceanica SA v. Norton, Lilly & Co., 652 F.Supp.
1512, 1517 (S.D.N.Y. 1987); Merrill Lynch, Pierce, Fenner & Smith,
Inc. v. DeCaro, 577 F.Supp. 616, 625 (W.D. Mo. 1983). See also J.
Brook s Sec., Inc. v. Vanderbilt Sec., Inc., 484 N.Y.S.2d 472, 474
(N.Y. S.Ct. 1985); Shay v. 746 Broadway Corp., 409 N.Y.S.2d 69,
70 (N.Y. S.Ct. 1978).
A few U.S. decisions have considered (and rejected) claims that an

arbitral tribunal may not order provisional relief because a foreign
court enjoys the exclusive power to do so. See Warth Line, Ltd v.
Merinda Marine Co., 778 F.Supp. 158 (S.D.N.Y. 1991); In re Noble
Nav. Corp., No. 83-3983 (S.D.N.Y. 4 June 1984).
478
56
63 See supra pp. 141-142, 206-207, 571-572.

64 Revised Uniform Arbitration Act, §8(b) (2000) (“After an arbitrator
is appointed and is authorized and able to act: (1) the arbitrator may
issue such order for provisional remedies, including interim awards,
as the arbitrator finds necessary to protect the effectiveness of the
arbitration proceeding and to promote the fair and expeditious
resolution of the controversy, to the same extent and under the
same conditions as if the controversy were the subject of a civil
action …”). See Cal. C.C.P. §§1297.91 to .92, 1297.171; Tex. Civ.
Prac. & Rem. Code Ann. §172.083(1).
65 See supra p. 1955 n. 62; Island Creek Coal Sales Co. v. City of
Gainesville, 729 F.2d 1046 (6th Cir. 1984); Sperry Int'l Trade, Inc. v.
Gov't of Israel, 689 F.2d 301 (2d Cir. 1982); Konk ar Maritime Enter.,
SA v. Compagnie Belge d'Affretement, 668 F.Supp. 267 (S.D.N.Y.
1987); Compania Chilena De Navegacion Interoceanica SA v.
Norton, Lilly & Co., 652 F.Supp. 1512 (S.D.N.Y. 1987); Southern
Seas Nav. Ltd v. Petroleos Mexicanos of Mexico City, 606 F.Supp.
692 (S.D.N.Y. 1985); Gilmer v. Interstate/Johnson Lane Corp., 500
U.S. 20 (U.S. S.Ct. 1991); Banco de Seguros del Estado v. Mut.
Marine Office, Inc., 344 F.3d 255 (2d Cir. 2003).
66 Charles Constr. Co. v. Derderian, 586 N.E.2d 992 (Mass. 1992).
See alsoGilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (U.S.
S.Ct. 1991); Banco de Seguros del Estado v. Mut. Marine Office,
Inc., 344 F.3d 255 (2d Cir. 2003). CompareSwift Indus., Inc. v.
Botany Indus., Inc., 466 F.2d 1125 (3d Cir. 1972).
67 See, e.g., Hoellering, The Practices and Experience of the
American Arbitration Association, in ICC, Conservatory and
Provisional Measures in International Arbitration 31 (1993) (“The
authority of arbitrators to grant conservatory and provisional
measures stems from their inherent powers to conduct the arbitral
proceedings and, more specifically, any additional authority granted
to them in the contract between the parties.”); Higgins, Interim
Measures in Transnational Maritime Arbitration, 65 Tulane L. Rev.
1519, 1535-36 (1991) (“By expressly consenting to the arbitration of
their dispute, the parties implicitly accord to the arbitrators a general
grant of power to exercise any authority necessary to reach a
determination on the merits of the dispute.”).
68 See infra pp. 2026-2028.
69 English Arbitration Act, 1996, §38(4). See R. Merkin, Arbitration
Law ¶¶14.57 to 14.58 (2004 & Update 2007).
70 English Arbitration Act, 1996, §38(6). The Arbitration Act also
grants arbitral tribunals seated in England the power to order
security for costs. See English Arbitration Act, 1996, §38(3); infra
pp. 2004-2006.
71 English Arbitration Act, 1996, §§38(1), 39(1). See also English
Arbitration Act, 1996, §48.
72 See R. Merkin, Arbitration Law ¶¶14.46 to 14.48, 14.63 (2004 &
Update 2007); Krasner v. Jason [2004] EWHC 592 (Ch).
73 See supra pp. 1953-1954.
74 German ZPO, §1041 (“(1) Unless otherwise agreed by the
479
parties, the arbitral tribunal may, at the request of a party, order

such interim measures of protection as the arbitral tribunal may
consider necessary in respect of the subject-matter of the dispute.
The arbitral tribunal may require any party to provide appropriate
security in connection with such measure.”) (superseding prior
German ZPO, §1036).
75 Austrian ZPO, §593(1) (“Unless otherwise agreed by the parties,
the arbitral tribunal may, upon request of a party and after hearing
the other party, order such interim or protective measures it deems
necessary in respect of the subject-matter in dispute if the
enforcement of the claim were otherwise frustrated or significantly
impeded, or there was a risk of irreparable harm. The arbitral tribunal
may request any party to provide appropriate security in connection
with such measure”); Riegler, in S. Riegler et al. (eds.), Arbitration
Law of Austria: Practice and Procedure §593, 1-3, 7 (2007).
76 Swedish Arbitration Act, §25(4) (“Unless the parties have agreed
otherwise, the arbitrators may, at the request of a party, decide that,
during the proceedings, the other party must undertake a certain
interim measure to secure the claim which is to be tried by the
arbitrators.”); F. Madsen, Commercial Arbitration in Sweden 183
(2006).
77 Japanese Arbitration Law, Art. 24(1) (“Unless otherwise agreed
by the parties, the arbitral tribunal may, at the request of a party,
order any party to take such interim measure of protection as the
arbitral tribunal may consider necessary in respect of the subject
matter of the dispute.”).
78 Indian Arbitration and Conciliation Act, Art. 17.
79 New Zealand Arbitration Act, First Schedule, Art. 17 et seq.
80 Canadian Commercial Arbitration Act, Art. 17.
81 See, e.g., Greek International Commercial Arbitration Law, Art.
17(1) (“Unless otherwise agreed by the parties, the arbitral tribunal
may, at the request of a party, order any party to take such interim
measure of protection as the arbitral tribunal may consider
necessary in respect of the subject-matter of the dispute.”); Belgian
Judicial Code, Art. 1696(1) (“Without prejudice to the provision of
Article 1679.2, the arbitral tribunal may, at the request of a party,
order provisional and protective measures, with the exception of an
attachment order.”). Compare Netherlands Code of Civil Procedure,
Art. 1051 (“an arbitration agreement shall not preclude a party from
requesting a court to grant interim measures of protection, or from
applying … for a decision in summary proceedings”).
The French New Code of Civil Procedure is silent on the subject of

provisional measures. See E. Gaillard & J. Savage (eds.), Fouchard
Gaillard Goldman on International Commercial Arbitration ¶¶1314-17
(1999).
82 See infra pp. 1958-1961.

83 See, e.g., UNCITRAL Rules, Art. 26; LCIA Rules, Art. 25; ICC
Rules (1988 Version), Art. 8(5); ICC Rules, Art. 23; AAA
480
Commercial Rules, R-34; JCAA Rules, Art. 48; ICSID Arbitration

Rules, Art. 39.
84 UNCITRAL Rules, Art. 26(1). See Marchac, Interim Measures in
International Commercial Arbitration under the ICC, AAA, LCIA and
UNCITRAL Rules, 10 Am. Rev. Int'l Arb. 123, 128 (2000); D. Caron,
L. Caplan & M. Pellonpää, The UNCITRAL Arbitration Rules: A
Commentary 534 (2006). Similar language is contained in the
Netherlands Arbitration Institute's Arbitration Rules (NAI Rules, Art.
38) and the DIS Arbitration Rules (DIS Rules, Art. 20).
85 See supra pp. 1952-1954.
86 Article 26(1) of the UNCITRAL Rules provides merely that an
order for the conservation of goods which are in dispute is one
example of permissible provisional relief, not suggesting that this is
the only form of permissible relief. On the contrary, Article 26(1), as
well as sensible commercial practice, permits the arbitral tribunal to
take any measures “it deems necessary” regarding the subject
matter of the dispute. Hence, if the subject matter of the dispute is a
claim for money damages, a tribunal may take steps to secure that
claim, including preventing dissipation of assets, just as a tribunal
may order preservation or restoration of a contractual status quo if
the subject matter of the arbitration is a contract or rights under a
contract. For differing suggestions, see Redfern, Arbitration and the
Courts: Interim Measures of Protection – Is the Tide About to Turn
?, 30 Tex. Int'l L.J. 72, 80 (1995); Marchac, Interim Measures in
International Commercial Arbitration under the ICC, AAA, LCIA and
UNCITRAL Rules, 10 Am. Rev. Int'l Arb. 123, 128 (2000).
87 ICC Rules, Art. 23. As one commentary explains, “[t]he
expression ‘interim or conservatory measures’ has not been defined,
thus permitting the Arbitral Tribunal to construe those words as
broadly as may be appropriate in each case.” See Y. Derains & E.
Schwartz, A Guide to the ICC Rules of Arbitration 296 (2d ed.
2005).
88 ICC Rules (1988 Version), Art. 8(5). See Schwartz, The
Practices and Experience of the ICC Court, in ICC, Conservatory
and Provisional Measures in International Arbitration 45, 46 (1993)
(“the arbitrators themselves are not expressly authorized to issue
[provisional] measures”); Lew, Commentary on Interim and
Conservatory Measures in ICC Arbitration Cases, 11(1) ICC Ct. Bull.
23, 24 (2000).
Ironically, the 1922 version of the ICC Rules contained an express

grant of authority to impose provisional measures, which was then
omitted in later versions. See ICC Rules (1922 Version), Art. XVIII
(“In all cases, the arbitrators, at the request of either of the
interested parties, shall have the right to render a provisional
decision, providing for such measures of preservation as may be
indispensable.…”).
The original ICC approach was derived from contemporary U.S. and
Latin American institutional rules. Schwartz, The Practices and
Experience of the ICC Court, in ICC, Conservatory and Provisional
Measures in International Arbitration 45, 45 n.* (1993).
59 481 52/89
89 LCIA Rules, Art. 25(1) (“The Arbitral Tribunal shall have the
power, unless otherwise agreed by the parties in writing, on the
application of any party: (a) to order any Respondent party to a
claim or counterclaim to provide security for all or part of the amount
in dispute, by way of deposit or bank guarantee or in any other
manner and upon such terms as the Arbitral Tribunal considers
appropriate. Such terms may include the provision by the claiming
or counterclaiming party of a cross-indemnity, itself secured in such
manner as the Arbitral Tribunal considers appropriate, for any costs
or losses incurred by such Respondent in providing security. The
amount of any costs and losses payable under such cross-
indemnity may be determined by the Arbitral Tribunal in one or more
awards; (b) to order the preservation, storage, sale or other disposal
of any property or thing under the control of any party and relating to
the subject matter of the arbitration; and (c) to order on a provisional
basis, subject to final determination in an award, any relief which the
Arbitral Tribunal would have power to grant in an award, including a
provisional order for the payment of money or the disposition of
property as between any parties.”).
90 LCIA Rules, Art. 25(2).
91 See Milan Rules, Art. 25(2) (“The Arbitral Tribunal may issue all
urgent and interim measures of protection, also of an anticipatory
nature, that are not prohibited by mandatory provisions applicable to
the proceedings”).
92 Early versions of the AAA Commercial Rules and other AAA
rules omitted reference to interim relief. See Charles Constr. Co. v.
Derderian, 586 N.E.2d 992 (Mass. 1992).
93 AAA Commercial Rules, R-34(a) (“whatever interim measures he
or she deems necessary”). See also infra p. 1974 n. 168.
94 SCC Rules, Art. 31 (“(1) Unless the parties have agreed
otherwise, the Arbitral Tribunal may, during the course of the
proceedings and at the request of a party, order a specific
performance by the opposing party for the purpose of securing the
claim which is to be tried by the Arbitral Tribunal. The Arbitral
Tribunal may order the requesting party to provide reasonable
security for damage which may be inflicted on the opposing party as
a result of the specific performance in question. (2) A request
addressed by a party to a judicial authority for interim measures
shall not be deemed to be incompatible with the arbitration
agreement or these Rules.”).
95 SCC Rules, Art. 32(1).
96 ICDR Rules, Art. 21; WIPO Arbitration Rules, Art. 46; JCAA
Rules, Art. 48(1).
97 CIETAC Rules, Art. 23.
98 See, e.g., Rock well Int'l Systems, Inc. v. Islamic Republic of
Iran, Award No. ITM 20-430-1 (6 June 1983), 2 Iran-US C.T.R. 369,
371 (1983) (“the tribunal has an inherent power to issue such orders
as may be necessary to conserve the respective rights of the parties
and to ensure its jurisdiction and authority are made fully effective….
This inherent power is in no way restricted by the language in Article
482
60
26 of the Tribunal Rules”).

99 See supra pp. 1959-1960 nn. 87, 88.
100 See, e.g., Award in ICC Case No. 7589, 11(1) ICC Ct. Bull. 60,
61 (2000); Interim Award in ICC Case No. 8786, 11(1) ICC Ct. Bull.
81 (2000);Final Award in ICC Case No. 7210, 11(1) ICC Ct. Bull. 49,
50 (2000). See also K.-P. Berger, International Economic Arbitration
331 (1993).
101 See, e.g., Charles Constr. Co. v. Derderian, 586 N.E.2d 992
(Mass. 1992) (former AAA Construction Arbitration Rules do not
grant power to order provisional relief); Swift Indus., Inc. v. Botany
Indus., Inc., 466 F.2d 1125 (3d Cir. 1972).
102 See supra pp. 1952-1958 & infra pp. 1973-1974.
103 See infra pp. 1961-1964. As also noted below, some
commentary does not clearly address this distinction. See infra p.
1963 n. 113.
104 See infra pp. 1976-1980.
105 See supra pp. 1311-1347.
106 As discussed above, the law of the arbitral seat will ordinarily
provide the procedural law governing the arbitration. See supra pp.
1241-1243, 1250-1252, 1310. In rare cases, the parties will agree
that a foreign law, other than that of the place of the arbitration will
govern the arbitration. See supra pp. 1243-1244, 1316-1324.
107 See, e.g., Interim Award in NAI Case No. 1694 (12 December
1996), XXIII Y.B. Comm. Arb. 97 (1998) (applying law of arbitral seat
to arbitral tribunal's power to grant provisional measures); Interim
Award in ICC Case No. 8879, 11(1) ICC Ct. Bull. 84, 89 (2000) (ICC
tribunal sitting in Toronto relies on Ontario law, as well as law
governing substance of parties' claims); Interim Award in ICC Case
No. 8786, 11(1) ICC Ct. Bull. 81, 83-84 (2000) (ICC tribunal sitting in
Switzerland relies on Article 183 of Swiss Law on Private
International Law); Award in NAI Summary Arbitral Proceedings,
Case No. 2212 (28 July 1999), XXVI Y.B. Comm. Arb. 198 (2001);
Decision in Geneva Chamber of Commerce of 25 September 1997,
19 ASA Bull. 745 (2001) (in dealing with application for security for
costs, tribunal first considered whether anything in law of arbitral
seat forbid such relief and then considered international practice as
to whether it should be granted). See also Schwartz, The Practices
and Experience of the ICC Court, in ICC, Conservatory and
Provisional Measures in International Arbitration 45, 58 (1993)
(“Provisional or conservatory measures are generally regarded as
matters governed by laws of procedure”).
108 National court decisions considering the power of an arbitral
tribunal typically arise in the courts of the arbitral seat and typically
apply the law of the arbitral seat without significant discussion. See,
e.g., Charles Constr. Co. v. Derderian, 586 N.E.2d 992 (Mass.
1992); Pacific Reins. Mgt Corp. v. Ohio Reins. Corp., 935 F.2d
1019, 1022-1023 (9th Cir. 1991); Island Creek Coal Sales Co. v. City
of Gainesville, 729 F.2d 1046, 1049 (6th Cir. 1984); Sperry Int'l
Trade, Inc. v. Gov't of Israel, 689 F.2d 301, 306 (2d Cir. 1982);
F.Supp. 267, 271 (S.D.N.Y. 1987); Judgment of 3 August 2004,
483
61
1HK O 1181/94/1, reported at www.dis-arb.de (Landgerich

Regensburg); Republic of Ecuador v. Occidental Exploration & Prod.
Co. (2006) EWHC 345 (Q.B.).
109 See, e.g., J. Lew, L. Mistelis & S. Kröll, Comparative
International Commercial Arbitration 588 (2003); S. Besson,
Arbitrage international et mesures provisoires 92 (1998); E. Gaillard
& J. Savage (eds.), Fouchard Gaillard Goldman on International
Commercial Arbitration ¶¶1314-1324 (1999).
110 See, e.g., UNCITRAL Model Law, Arts. 1(2), 17; Swiss Law on
Private International Law, Arts. 176(1), 183; English Arbitration Act,
1996, §§2(1), 38(3), 38(4); Japanese Arbitration Law, Arts. 1, 24.
111 See, e.g., Final Award in ICC Case No. 7895, 11(1) ICC Ct.
Bull. 64 (2000); Partial Award in ICC Case No. 8113, 11(1) ICC Ct.
Bull. 65 (2000); Interim Award in ICC Case No. 8879, 11(1) ICC Ct.
Bull. 84 (2000). See also G. Petrochilos, Procedural Law in
International Arbitration 209 (2004) (“arbitrators invariably rule that if
the law of the seat prohibits them to order interim protection … they
have no such jurisdiction”).
112 See supra pp. 1241-1243, 1250-1252, 1293, 1310.
113 Some commentary suggests that tribunals typically do not
look to national law (of the arbitral seat or otherwise) in considering
whether they possess power to order provisional measures. Lew,
Commentary on Interim and Conservatory Measures in ICC
Arbitration Cases, 11(1) ICC Ct. Bull. 23, 26 (2000) (citing awards in
ICC Case Nos. 7589 and 7210). This approach conflates the law
governing the standards for exercising power to grant provisional
measures with the law governing the existence of any such power at
all. The two issues are separate, and most arbitral authority does
not apply international standards to the question whether a tribunal
has the authority to issue interim relief.
114 See supra pp. 1949-1952.
115 See supra pp. 1948-1949; Awardin ICC Case (Unidentified), in
Schwartz, The Practices and Experience of the ICC Court, in ICC,
45, 58 & n.44 (1993) (tribunal concludes that it is entitled to order
provisional measures notwithstanding Swiss Cantonal Concordat).
Compare Lew, Commentary on Interim and Conservatory Measures
in ICC Arbitration Cases, 11(1) ICC Ct. Bull. 23, 25 (2000) (“If the
[parties' incorporated institutional] rules empower the tribunal to
grant the interim relief requested, it can do so subject always to the
mandatory law of the place of arbitration”).
116 The recognition and enforcement of awards and orders of
interim relief raise complex issues. See infra pp. 2020-2028.
Assuming that such measures are, in a particular circumstance and
jurisdiction otherwise enforceable, then the fact that the law of the
arbitral seat forbid relief provided for by the parties' arbitration
agreement should not preclude recognition; on the contrary, there is
a substantial argument that recognition would be required. See New
York Convention, Art. V(1)(d) (procedures not in accord with parties'
agreement); supra pp. 1270-1274 & infra pp. 2764-2777.
117 See supra pp. 1951-1952. Compare infra pp. 2075-2076.
484
118 A. Redfern & M. Hunter (eds.), Law and Practice of

International Commercial Arbitration ¶7-22 (4th ed. 2004).
119 Huntley, The Scope of Article 17: Interim Measures under the
UNCITRAL Model Law, 740 PLI/Lit. 1181, *72 (2005) (“the parties
are not free to indirectly alter the authority of a tribunal to require
interim measures under Article 17 [of the Model Law] simply by
agreeing to inconsistent arbitral rules”); Dermajaya Properties Sdn
Bhd v. Premium Properties Sdn Bhd, [2002] 2 Sing. L.R. 164
(Singapore High Court) (parties may not agree to institutional
arbitration rules that alter tribunal's powers to award interim
measures under Singapore's version of the UNCITRAL Model Law).
120 As noted above, it is doubtful whether this conclusion is
consistent with Contracting States' obligations under Article II of the
New York Convention. See supra pp. 1948-1949, 1965.
121 Schwartz, The Practices and Experience of the ICC Court, in
ICC, Conservatory and Provisional Measures in International
Arbitration 45, 59 (1993); D. Caron, L. Caplan & M. Pellonpää, The
UNCITRAL Arbitration Rules: A Commentary 540 (2006) (“an arbitral
tribunal's jurisdiction encompasses only the parties before it [and]
interim measures may not be directed to non-parties”); Huntley, The
Scope of Article 17: Interim Measures under the UNCITRAL Model
Law, 740 PLI/Lit. 1181, *86 (2005) (arbitral tribunal has authority
under Article 17 of Model Law only to issue provisional measures
against parties to arbitration).
122 See, e.g., Final Award in ICC Case No. 7828, cited in Lew,
Arbitration Cases, 11(1) ICC Ct. Bull. 23, 25 (2000).
In litigation contexts, as distinguished from arbitration, parties may

seek attachment of funds owned by adverse parties, or debts owed
to them. An attachment is intended to preserve sums necessary to
satisfy a final judgment (of damages or legal costs) against the
owner of the property and, in particular, to prevent the owner or
others from removing the property from the territory of the forum
court. Unlike most other provisional measures, an attachment is
usually directed against third parties – such as banks or securities
brokers, holding the defendants' property – or persons owing debts
to the defendant. E.g., Carolina Power & Light Co. v. Uranex, 451
F.Supp. 1044 (N.D. Cal. 1977).
123 UNCITRAL Model Law, Art. 17 (emphasis added). See also

Austrian ZPO, §593(1) (“against another party”); Swedish Arbitration
Act, §25(4) (“the other party must undertake”); Greek International
Commercial Arbitration Law, Art. 17(1) (“order any party”); English
Arbitration Act, 1996 §39(1) (“any relief which it would have power to
grant in a final award”).
124 Belgian Judicial Code, Art. 1696(1) (emphasis added).
125 See supra pp. 1133-1137. It is theoretically possible that
national law could confer the power to order provisional relief against
third parties to the arbitral process. Compare, for example, the
authority of tribunals seated in the United States under the FAA to
485
63
issue subpoenas to third parties. See supra pp. 1883-1885. No state

appears to have taken such a step, which would either require
mechanisms for third parties to be heard by the arbitral process
(which would raise grave issues of practicality) or ignoring the
submissions of third parties. Neither possibility is likely.
126 See, e.g., Belgian Judicial Code, Art. 1696(1); McDonnell, The
Availability of Provisional Relief in International Commercial
Arbitration, 22 Colum. J. Transnat'l L. 273, 283 n.56 (1983-1984).
127 Swiss Law on Private International Law, Art. 183(2). See also
Berti, in S. Berti et al. (eds.), International Arbitration in Switzerland
Art. 183, ¶16 (2000) (“arbitral tribunal has no possibilities to sanction
its enforcement”).
128 See, e.g., E. Gaillard & J. Savage (eds.), Fouchard Gaillard
Goldman on International Commercial Arbitration ¶¶1323-24 (1999);
Esko, The Arbitral Proceedings, in M. Savola (ed.), Law and
Practice of Arbitration in Finland 43-44 (2004) (arbitrator may
recommend provisional measures; may not impose penalty to
require compliance); R. Merkin, Arbitration Law ¶¶14.46 to 14.50
(2004 & Update 2007); Schwartz, The Practices and Experience of
the ICC Court, in ICC, Conservatory and Provisional Measures in
International Arbitration 45, 59 (1993) (“[t]he most important and
obvious such difference [between court-ordered and tribunal-ordered
provisional measures] is that orders given by arbitrators are not self-
executing, like those of courts, and must generally take the form of
directions to the parties to perform or refrain from performing certain
acts.”).
129 See infra pp. 2327-2331, 2513-2520.
Arbitration 45, 59 (1993).
131 Unusually, the Netherlands Code of Civil Procedure authorizes
arbitral tribunals to impose penalties for noncompliance with their
orders. Netherlands Code of Civil Procedure, Art. 1056 (“The arbitral
tribunal has the power to impose a penalty for non-compliance in
cases where the court has such power”); Final Award in ICC Case
No. 7895, 11(1) ICC Ct. Bull. 64, 65 (2000) (imposing penalties for
each product sold in violation of tribunal's provisional measures).
132 A tribunal's sanctions would, if not themselves obeyed, require
judicial enforcement, however, and it is not clear whether most
national courts would grant such enforcement.
133 Lew, Commentary on Interim and Conservatory Measures in
ICC Arbitration Cases, 11(1) ICC Ct. Bull. 23, 24 (2000). See also
Schwartz, Conservatory and Provisional Measures in International
Arbitration 45, 59 (1993) (“Ultimately, of course, the arbitrators'
greatest source of coercive powers relies in their position as arbiters
of the merits of the dispute between the parties. Parties seeking to
appear before arbitrators as good citizens who have been wronged
by their adversary would generally not wish to defy instructions given
to them by those whom they wished to convince of the justice of
their claims.”).
134 For example, if a dispute concerns ownership of disputed
486
64
property, which cannot easily be reclaimed once transferred to third

parties, a litigant may well be prepared to purport effectively to
resolve the parties' dispute by proceeding with a forbidden transfer.
135 See supra pp. 184-189, 1625-1627 & infra pp. 2573-2595,
2595-2600, 2606-2611, 2611-2618.
136 UNCITRAL Model Law, Art. 17 (emphasis added); supra pp.
1952-1954.
137 See, e.g., A. Redfern & M. Hunter (eds.), Law and Practice of
International Commercial Arbitration ¶7-26 (4th ed. 2004)
(“measures contemplated relate to preserving or selling of goods
rather than, for instance, preventing the flight of assets”); Huntley,
The Scope of Article 17: Interim Measures under the UNCITRAL
Model Law, 740 PLI/Lit. 1181, *78 (2005) (urging “narrow
interpretation” of subject matter of the dispute: “a broad
interpretation of the subject matter could lead to a slippery slope
whereby tribunal will define the all-encompassing term to include
anything and everything”).
138 SeeReport of the UNCITRAL on the Work of its Eighteenth
Session, UN Doc. A/40/17, ¶168, XVI Y.B. UNCITRAL 3 (1985);
Report of the Secretary-General on the Analytical Commentary on
Draft Text of a Model on International Commercial Arbitration, UN
Doc. A/CN.9/264, Art. 9, ¶4, XVI Y.B. UNCITRAL 104, 115 (1985)
(“range of interim measures of protection covered by article 9 of the
Model Law [available from national courts] is considerably wider than
that under article [17, from arbitral tribunal]”); Huntley, The Scope of
Article 17: Interim Measures under the UNCITRAL Model Law, 740
PLI/Lit. 1181, *77 (2005) (narrower version of Article 17 prevailed in
drafting, and “Model Law should only authorise a tribunal to issue a
measure related to the subject matter of the dispute”).
139 The drafting history refers generally to the range of measures
available for provisional relief, which can readily be understood as a
reference to the inherent limitation of the arbitral process to relief
directed towards the parties to the arbitration, not towards third
parties. H. Holtzmann & J. Neuhaus, A Guide to the UNCITRAL
Model Law on International Commercial Arbitration: Legislative
History and Commentary 332-33 (1989) (“Article 9 is not limited to
any particular kind of interim measures. Thus it applies to measures
to conserve the subject matter of the dispute; measures to protect
trade secrets and proprietary information; measures to preserve
evidence; pre-award attachments to secure an eventual award and
similar seizures of assets; measures required from third parties; and
enforcement of any interim measures ordered.”).
140 Katran Shipping Co. v. Kenven Transp. Ltd, XVIII Y.B. Comm.
Arb. 175, 177 (H.K. High Court, S. Ct. 1992) (1993) (interim relief
issued by court need not be limited to preserving subject matter of
the dispute).
141 D. Caron, L. Caplan & M. Pellonpää, The UNCITRAL
Arbitration Rules: A Commentary 534 (2006) (“relationship between
interim measures and the subject matter of the dispute is usually
not problematic”).
142 UNCITRAL Model Law, Art. 17(1).
487
143 Report of the UNCITRAL on the Work of its Thirty-Ninth

Session, UN Doc. A/61/17, ¶93 (2006), available at
www.uncitral.org.
144 English Arbitration Act, 1996, §38(4).
145 R. Merkin, Arbitration Law ¶14.58 (2004 & Update 2007); D.
Sutton, J. Gill & M. Gearing, Russell on Arbitration ¶¶5-106, 6-020
(22d ed. 2003).
146 English Arbitration Act, 1996, §25(4) (“interim measures to
secure the claim”).
147 Swedish Arbitration Act, §25(4) (“interim measures to secure
the claim”); Japanese Arbitration Law, Art. 24(1) (“necessary in
respect of the subject matter of the dispute”).
148 See, e.g., UNCITRAL Model Law, Art. 17; Swiss Law on
Private International Law, Arts. 183 & 184; English Arbitration Act,
1996, §25; Japanese Arbitration Law, Art. 24.
149 See, e.g., UNCITRAL Rules, Art. 26(1); LCIA Rules, Art. 25;
ICDR Rules, Art. 21.
150 See, e.g., ICC Rules, Art. 23(1) (no provisional measures until
the file has been transmitted to the tribunal, following payment of
advances on costs). See also Y. Derains & E. Schwartz, A Guide to
the ICC Rules of Arbitration 296-299 (2d ed. 2005); Schwartz, The
and Provisional Measures in International Arbitration 45, 62-63
(1993).
151 As discussed above, constitution of an arbitral tribunal may
take weeks or months, particularly if one party is obstructive. See
supra pp. 1386-1417.
152 See infra pp. 1972-1973, 2028-2029, 2050-2051.
153 See generally Hausmaninger, The ICC Rules for A Pre-Arbitral
Referee Procedure: A Step Towards Solving the Problem of
Provisional Relief in International Commercial Arbitration, 7 ICSID
Rev.-For. Inv. L.J. 82 (1992); Paulsson, A Better Mousetrap: 1990
ICC Rules for A Pre-Arbitral Referee Procedure, 18 Int'l Bus. Law.
214 (1990).
154 Gaillard & Pinsolle, The ICC Pre-Arbitral Referee: First
Practical Experience, 20 Arb. Int'l 13 (2004). As of 2008, the ICC
had registered only 9 requests under the pre-arbitral referee rules,
the first being in 2001.
155 NAI Rules, Art. 42; ICDR Rules, Art. 37 (“Emergency
Measures of Protection,” involving appointment of special
“emergency arbitrator”). See also Dunning et al., Using Article 37 of
the ICDR International Arbitration Rules: Obtaining Emergency
Relief, 62 Disp. Res. J. 68 (2007).
156 NAI Rules, Art. 43(2); ICDR Rules, Art. 37(6).
157 The parties are free to exclude application of Article 37 of the
ICDR Rules and Article 42 of the NAI Rules. ICDR Rules, Art. 37(1);
NAI Rules, Art. 42.o (“The submission of a claim based on this
Section does not preclude a party from requesting a court to grant
interim measures of protection.”).
488
158 For examples of concurrent exercises of authority to order

provisional measures, by both an arbitral tribunal and a court, see
infra pp. 2050-2051; Nagos Compania Maritima v. Del Bene, SACIF,
Award in Society of Maritime Arbitrators, Case No. 2533 (30
November 1988), 4 Soc. Mar. Arb. 297 (1988); Palm Shipping v.
Imbar Maritima, SA, Award in Society of Maritime Arbitrators, Case
No. 2546 (12 September 1988), 5 Soc. Mar. Arb. 191 (1988); Partial
Award in ICC Case No. 6709, in J.-J. Arnaldez, Y. Derains & D.
Hascher (eds.), Collection of ICC Arbitral Awards 1991-1995 435
(1997); Award in ICC Case No. 4156, 111 J.D.I. (Clunet) 937 (1984);
Sperry Int'l Trade, Inc. v. Gov't of Israel, 689 F.2d 301 (2d Cir.
1982); Judgment of 10 March 1998, 1999 Rev. arb. 56 (French Cour
de cassation com.); Judgment of 25 November 1986, 1987 Rev. arb.
321 (French Cour de cassation civ. 1e); Judgment of 18 November
1986, Société Atlantic Triton v. République populaire révolutionnaire
de Guinée et société Soguipêche, 1987 Rev. arb. 315 (French Cour
de cassation civ. 1e); Judgment of 7 June 2001, SA Hellafranca v.
SA Natalys, 2001 Rev. arb. 605 (Paris Cour d'appel); Couchez,
Référé et arbitrage (Essai de bilan … provisoire), 1986 Rev. arb.
155. See generally J.-F. Poudret & S. Besson, Comparative Law of
International Arbitration ¶611 (2d ed. 2007).
159 See supra pp. 1020-1024, 1030-1031, 1128-1130 & infra pp.
2934-2935. This overlapping competence also has the potential to
conflict with the general principle of judicial non-intervention in the
arbitral process. See supra pp. 1776-1782.
160 See supra pp. 1081-1083. As discussed below, principles of
preclusion and lis pendens should be interpreted to reduce the
scope for such interference. See infra pp. 2930-2933, 2947-2950.
161 See infra pp. 2050-2051.
162 See supra pp. 1946-1958.
163 See supra pp. 1951-1952, 1953-1954, 1957.
164 See supra pp. 1953, 1954, 1955-1956; UNCITRAL Model Law,
Art. 17 (“Unless otherwise agreed by the parties …”); Swiss Law on
Private International Law, Art. 183(1) (“Unless the parties have
agreed otherwise …”); English Arbitration Act, 1996, §38(1) (“The
parties are free to agree on the powers exercisable by the arbitral
tribunal for the purposes of and in relation to the proceedings.”);
Japanese Arbitration Law, Art. 24(1) (“unless otherwise agreed by
the parties”).
165 See supra pp. 1958-1960; ICC Rules, Art. 23(1) (“Unless the
parties have otherwise agreed …”); LCIA Rules, Art. 25(1) (“unless
otherwise agreed by the parties in writing”). Compare UNCITRAL
Rules, Art. 26.
166 See supra pp. 1951-1952, 1953-1954, 1957.
167 The same analysis applies to the parties' agreement to
arbitrate in a jurisdiction that does not expressly grant the arbitral
tribunal the power to order provisional measures. As discussed
above, a different conclusion applies where parties agree to arbitrate
in a jurisdiction that denies arbitrators the power to order provisional
measures; there, such a choice of the arbitral seat can be
considered an exclusion of the arbitrators' power to order provisional
489
relief. See supra pp. 1951-1952, 1963-1964.

168 See supra pp. 1951-1952, 1953-1954, 1957. A few early U.S.
judicial decisions concluded that agreement to the AAA Commercial
Rules, which at the time did not expressly grant the power to order
provisional measures, excluded such power. E.g., Charles Constr.
Co. v. Derderian, 586 N.E.2d 992 (Mass. 1992). This analysis is
misconceived, for the reasons referred to in text, and has not
subsequently been followed.
169 See supra pp. 1972-1973 & infra 2050-2051.
170 See supra pp. 1951-1952, 1963-1964.
Arbitration 45, 47 (1993).
172 For published examples of awards reflecting this reticence, see
Award in ICC Case No. 2444, 104 J.D.I. (Clunet) 932 (1977); Partial
Award in ICC Case No. 3896, 110 J.D.I. (Clunet) 914 (1983); Award
in ICC Case No. 3540, in S. Jarvin & Y. Derains (eds.), Collection of
ICC Arbitral Awards 1974-1985 105 (1990); Partial Award in ICC
Case No. 4126, in S. Jarvin & Y. Derain (eds.), Collection of ICC
Arbitral Awards 1974-1985 511 (1990); Award in ICC Case No. 4156,
111 J.D.I. (Clunet) 937 (1984); Award in ICC Case No. 4415, 111
J.D.I. (Clunet) 952 (1984); Partial Award in ICC Case No. 4998, 113
J.D.I. (Clunet) 1139 (1986); Award in ICC Case No. 5103, 115 J.D.I.
(Clunet) 1206 (1988); Final Award in ICC Case No. 5650, XVI Y.B.
Comm. Arb. 855 (1991).
173 See supra pp. 1949-1951.
174 Technological advances in telephone and e-mail
communications have made it feasible for the parties to serve
submissions, and for the tribunal to deliberate, essentially
instantaneously, thereby making it much more practicable for even
geographically-dispersed tribunals to entertain provisional measures
applications. Further, as the size and contentiousness of arbitral
disputes has increased, parties have increasingly been willing to
take steps designed to pre-empt the arbitral process and,
conversely, to seek provisional measures preventing such steps.
ICC Arbitration Cases, 11(1) ICC Ct. Bull. 23, 23 (2000). As noted
above, provisional measures were requested in only 25 cases
between 1979 and 1994. See supra p. 1975. The three-fold increase
in requests for provisional measures in the 15 years following 1985
almost certainly increased substantially following 2000.
176 See supra pp. 1948-1958, 1973-1974.
177 See supra pp. 1961-1964.
178 For awards adopting this approach, seeInterim Award in ICC
Case No. 8786, 11(1) ICC Ct. Bull. 81, 82 (2000) (referring to Article
183 of Swiss Law on Private International Law as the legal basis for
provisional and protective measures); Award in NAI Summary
Arbitral Proceedings, Case No. 2212 (28 July 1999), XXVI Y.B.
Comm. Arb. 198 (2001) (regarding Dutch domestic standards);
Interim Award in ICC Case No. 7544, 11(1) ICC Ct. Bull. 56 (2000)
490
(considering French domestic standards as “helpful as a pointer”);

InterimAward in NAI Case No. 1694 (12 December 1996), XXIII Y.B.
Comm. Arb. 97 (1998) (considering Dutch domestic standards);
Interim Award in ICC Case No. 8879, 11(1) ICC Ct. Bull. 84 (2000)
(relying on the lex contractus and on the lex fori). See also R.
Schütze, Schiedsgericht und Schiedsverfahren ¶257 (4th ed. 2007)
(under German version of UNCITRAL Model Law, domestic
standards for provisional measures applicable to tribunal's
consideration of such measures).
179 For awards adopting this approach, seeInterim Award in ICC
Case No. 8879, 11(1) ICC Ct. Bull. 84 (2000) (relying on the lex
contractus and on the lex fori); Interim Award in ICC Case No. 8879,
11(1) ICC Ct. Bull. 84, 89 (2000) (“… both the laws of Ontario (lex
fori) and Mexico (lex contractus) expressly grant arbitrators that
authority in substantially the same terms as Article 17 of the
UNCITRAL Model Law …”); Award in NAI Summary Arbitral
Proceedings, Case No. 2212 (28 July 1999), XXVI Y.B. Comm. Arb.
198 (2001) (considering Dutch domestic standards).
180 For arbitral decisions adopting this approach, seeDecision of
Geneva Chamber of Commerce of 25 September 1997, 19 ASA
Bull. 745 (2001) (considering international practice as to whether
request for provisional measures should be granted); Partial Award in
ICC Case No. 8113, 11(1) ICC Ct. Bull. 65 (2000) (determining the
requirements of urgency, irreparable harm and no pre-judgment of
the dispute without reference to any national laws). For provisional
measures without reference to a national law, see, e.g., Interim
Award in ICC Case No. 8894, 11(1) ICC Ct. Bull. 94 (2000).
The law applicable to a request for provisional measures in national

courts, in connection with a pending or future arbitration, will be
governed by different legal standards. See infra pp. 2055-2057.
181 See supra pp. 1951-1958, 1961-1964; Swiss Law on Private

International Law, Art. 183(1); Belgian Judicial Code, Art. 1696(1);
English Arbitration Act, 1996, §38.
182 See UNCITRAL Model Law, Art. 17. See also authorities cited
supra pp. 1953-1954 nn. 55, 56, p. 1955 n. 62 & p. 1977 n. 180.
183 See supra pp. 100-101 & infra pp. 2107-2111. The foregoing
conclusion also fosters the development of a body of international
authority that provides efficient means of resolving disputes
regarding provisional measures. Arbitration is selected in part so
that experienced decision-makers will be in a position to resolve
disputes in commercially-sensible and effective ways. See supra pp.
78-81. Permitting arbitrators to develop authoritative standards for
granting provisional measures furthers this objective.
ICC Arbitration Cases, 11(1) ICC Ct. Bull. 23, 27 (2000) (noting a
“second approach - i.e., determining the issue of whether to grant
relief without reference to any national law - would appear to be more
common”); J.-F. Poudret & S. Besson, Comparative Law of
International Arbitration ¶625 (2d ed. 2007) (stating that “these
491
69
difficulties [of the conflict of law method in the area of provisional

matters] explain why the large majority of judgments and awards
have not dwelt on the determination of the applicable law.”); Decision
in Geneva Chamber of Commerce of 25 September 1997, 19 ASA
Bull. 745 (2001) (in dealing with application for security for costs,
tribunal first considered whether anything in law of arbitral seat forbid
such relief and then considered international practice as to whether
it should be granted); Interim Award in ICC Case 8894, 11(1) ICC Ct.
Bull. 94 (2000); Final Award in ICC Case No. 7589, 11(1) ICC Ct.
Bull. 60 (2000); Final Award in ICC Case No. 7210, 11(1) ICC Ct.
Bull. 49 (2000); Victor Pey Casado y Fundación Presidente Allende
v. República de Chile, Decision on Provisional Measures, ICSID
Case No. ARB/98/2 (25 September 2001), http://icsid.worldbank.org
(looking to international standards); Schlosser, in F. Stein & M.
Jonas (eds.), Kommentar zurZivilprozessordnung §1041, ¶12 (22d
ed. 2002).
185 See supra pp. 1906-1908.
186 UNCITRAL Model Law, 2006 Revisions, Art. 17A.
187 Article 17A's formula is lacking in a number of respects.
Among other things, Article 17A apparently makes no provision for
parties' agreements on the standards of proof, omits any reference
to urgency, unduly focuses “irreparable” harm on monetary damages
(as distinguished from non-monetary relief), imposes a single
standard for differing types of interim relief and omits reference to
security for costs. See infra pp. 1980-1993 for further discussion of
the appropriate standards for granting provisional measures.
188 See infra pp. 1980-1933.
189 This occurs most frequently in contracts dealing with
intellectual property, which often contain provisions expressly
authorizing provisional measures. See, e.g., G. Born, International
Arbitration and Forum Selection Agreements: Drafting and Enforcing
91-92 (2d ed. 2006).
190 UNCITRAL Rules, Art. 26(1).
191 ICC Rules, Art. 23. See also WIPO Arbitration Rules, Art. 46;
ICDR Rules, Art. 21(1); DIS Rules, §20; LCIA Rules, Art. 25(1)(a)
(“considers appropriate”).
192 This would be contrary to the expectations of the parties,
except where they have agreed to arbitration ex aequo et bono, and
to the adjudicatory character of arbitration. See supra pp. 187-189,
247-252.
193 See infra pp. 1991-1992, 1994-2011.
Arbitration Rules: A Commentary 542 (2006) (“Given the exceptional
urgency involved and the very provisional nature of the measure,
however, the arbitral tribunal should be very sympathetic to the
applicant in borderline cases in applying both the prima facie and
grave/substantial damage (or ‘irreparable’ harm) tests.”).
195 See infra pp. 1981-1988.
196 See, e.g., Lew, Commentary on Interim and Conservatory
Measures in ICC Arbitration Cases, 11(1) ICC Ct. Bull. 23 (2000);
492
W. Craig, W. Park & J. Paulsson, Annotated Guide to the 1998 ICC

Arbitration Rules 137 (1998) (“enjoin conduct likely to cause
irreparable harm concerning the subject matter of the dispute (such
as, for instance, the calling of bank guarantees provided for in a
construction contract where the call would be contrary to the
provisions of the contact)”); K.-P. Berger, International Economic
Arbitration 336 (1993) (“substantial (but not necessarily ‘irreparable’
as known in common law doctrine)”); Schwartz, The Practices and
Measures in International Arbitration 45, 60 (1993) (“the grave and
irreparable harm usually required by arbitral tribunals can take many
forms”). See also UNCITRAL Model Law, 2006 Revisions, Art.
17A(1)(a) (“harm not adequately reparable by an award of damages
is likely to result if the measure is not ordered”).
197 Interim Award in ICC Case No. 8786, 11(1) ICC Ct. Bull. 81,
83-84 (2000). See alsoInterim Award in ICC Case No. 8894, 11(1)
ICC Ct. Bull. 94, 97 (2000); Islamic Republic of Iran v. United States
of America, Decision No. DEC 116-A15(IV) & A24-FT (18 May
1993), 29 Iran-US C.T.R. 214 (1993).
ICC Arbitration Cases, 11(1) ICC Ct. Bull. 23, 28 (2000).
199 Tok ios Tok elés v. Uk raine, Procedural Order No. 3, ICSID
Case No. ARB/02/18 (18 January 2005), ¶8, available at
http://icsid.worldbank.org. See also Plama Consortium Ltd v.
Republic of Bulgaria, Order, ICSID Case No. ARB/03/24 (6
September 2005), ¶38, available at http://icsid.worldbank.org
(provisional measures appropriate “to avoid the occurrence of
irreparable harm or damage”); Islamic Republic of Iran v. United
States of America, Case A/15 & A/24, Award No. ITL 33-A-4/A-
15(III)-2 (1 February 1983), 5 Iran-US C.T.R. 131, 133 (1984)
(ordering United States not to sell “Iran's diplomatic and consular
properties in the United States which possess important historical,
cultural or other unique factors and which, by their nature, are
irreplaceable”; “injury that can be made whole by monetary relief
does not constitute irreparable harm”); D. Caron, L. Caplan & M.
Pellonpää, The UNCITRAL Arbitration Rules: A Commentary 536
(2006) (“interim measures can be sought only in order to prevent
irreparable prejudice or harm to the rights of the parties”).
The Permanent Court of International Justice held that injury is

irreparable where it “could not be made good simply by the payment
of an indemnity or by compensation or restitution in some other
material form.” Denunciation of the Treaty of 2 November 1865
Between China and Belgium, PCIJ Series A/B, No. 8, at 7 (P.C.I.J.
1927).
200 UNCITRAL Model Law, 2006 Revisions, Art. 17A(1)(a).

201 See authorities cited supra pp. 1981-1982 nn. 196, 199. Some
commentary is ambivalent. See, e.g., Wirth, Interim or Preventive
ASA Bull. 31, 37-8 (2000) (“the detriment resulting if no relief is
493
granted could not easily be remedied (exposure to ‘irreparable’

harm)”).
Arbitration Rules: A Commentary 538 (2006) (“potential pecuniary
harm may necessitate interim measures where the arbitral tribunal
has reason to believe that the damaged party would encounter
difficulties in having a compensatory award enforced”).
International Arbitration 45, 60 (1993) (“ICC arbitral tribunals have
sometimes construed the risk of financial loss itself to constitute
irreparable harm”); D. Caron, L. Caplan & M. Pellonpää, The
UNCITRAL Arbitration Rules: A Commentary 537 (2006) (“the terms
‘grave’ or ‘substantive’ might be more appropriate than ‘irreparable’”);
Behring Int'l, Inc. v. Islamic Republic of Iran, Interim and
Interlocutory AwardNo. ITM/ITL 52382-3 (21 June 1985), 8 Iran-US
C.T.R. 238 n. 42 (1985) (concept of irreparable prejudice in
international law is broader than the Anglo-American law concept of
irreparable injury and does not necessarily require showing that
“injury complained of is not remediable by an award of damages
(i.e., where there is no certain pecuniary standard for the measure of
damages …)”); Interim Award in ICC Case No. 8786, 11(1) ICC Ct.
Bull. 81, 83 (2000) (“‘substantial’(but not necessarily ‘irreparable’ as
known in common law doctrine) prejudice for the requesting party”);
J. Lew, L. Mistelis & S. Kröll, Comparative International Commercial
Arbitration ¶23-65 (2003) (in this respect “irreparable” must be
understood in an economic, not a literal sense); Interlocutory Award
in ICC Case No. 10596, XXX Y.B. Comm. Arb. 66 (2005). See also
Laycock, Death of the Irreparable Injury Rule, 103 Harv. L. Rev. 687
(1990).
On the other hand, some authorities contain language suggesting an

irreparable harm standard, in the literal sense. See, e.g., Plama
Consortium Ltd v. Republic of Bulgaria, Order, ICSID Case No.
ARB/03/24 (6 September 2005), ¶46, available at
http://icsid.worldbank.org (“[H]arm is not irreparable if it can be
compensated for by damages”); Victor Pey Casado y Fundación
Presidente Allende v. República de Chile, Decision on Provisional
Measures, ICSID Case No. ARB/98/2 (25 September 2001),
http://icsid.worldbank.org (claimant had not shown irreparable harm
where assets in dispute could be returned or compensated for by
damages); Denunciation of the Treaty of 2 November 1865 Between
China and Belgium, PCIJ Series A/B No. 8, at 7 (P.C.I.J. 1927)
(injury is irreparable if it “could not be made good simply by the
payment of an indemnity or by compensation or restitution in some
other material form”); Islamic Republic of Iran v. United States,
Case No. B1 (Claim 4), Decision No. DEC 85-B1-FT (18 May 1989),
1989 WL 663856, ¶10 (“Injury that can be made whole by monetary
relief does not constitute irreparable harm.”); Boeing Co. v. Islamic
Republic of Iran, Interim Award No. ITM 34-222-1(17 February
1984), 5 Iran-US C.T.R. 152, 154 (1985) (same).
72 494
204 Award in NAI Summary Arbitral Proceedings, Case No. 2212

(28 July 1999), XXVI Y.B. Comm. Arb. 198 (2001) (applying Dutch
civil procedure rules to request for provisional relief, including
substantive requirements for prima facie case, urgency and “a
balancing of interest”). See also Committee on International Civil and
Commercial Litigation, Principles on Provisional and Protective
Measures in International Litigation, in ILA, Report of the Sixty-
Seventh Conference, Helsink i 202, ¶4 (1996) (provisional measures
should be available on showing of “a case on the merits,”according
to a reduced standard of proof, and “the potential injury to the
plaintiff outweighs the potential injury to the defendant”).
205 UNCITRAL Model Law, 2006 Revisions, Art. 17A(1)(a) (“Harm
not adequately reparable by an award of damages is likely to result
if the measure is not ordered, and such harm substantially
outweighs the harm that is likely to result to the party against whom
the measure is directed if the measure is granted.”).
206 For example, in a case involving a dispute over termination of a
patent license, a tribunal may order that the patent continue to be
licensed to the disputed licensee, rather than remaining unlicensed,
so that any potential damages are mitigated, even if the respondent
would prefer, for litigation reasons or otherwise, to cease the license
arrangement immediately.
207 E.g., A. Redfern & M. Hunter (eds.), Law and Practice of
International Commercial Arbitration ¶7-11(4th ed. 2004).
208 See UNCITRAL Model Law, Art. 17A(2) (excluding preservation
of evidence orders from automatic application of Article 17A(1)).
209 See supra p. 1906. Similarly, as noted below, it makes little
sense to consider whether requests for production, inspection or
preservation of evidence “prejudge the outcome” of the case, since
these procedural decisions obviously do not. See infra pp. 1988-
1989.
210 See infra pp. 2004-2006.
211 See, e.g., RCA Global Comm. Disc, Inc. v. Islamic Republic
of Iran, Award No. ITM 30-160-1 (31 October 1983), 4 Iran-US
C.T.R. 9, 11-12 (1983) (“the Tribunal has an inherent power to issue
such orders as may be necessary to conserve the respective rights
of the Parties and to ensure that the Tribunal's jurisdiction and
authority are made fully effective”); E-Systems, Inc. v. Islamic
Republic of Iran, Interim Award No. 13-388-FT (4 February 1983), 2
Iran-US C.T.R. 51, 57 (1983);Islamic Republic of Iran v. United
States of America, Decision No. DEC 116-A15(IV) & A24-FT (18
May 1993), 29 Iran-US C.T.R. 214 (1993) (“interim relief can be
granted only if it is necessary to protect a party from irreparable
harm or to avoid prejudice to the jurisdiction of the Tribunal”)
(emphasis added); Boeing Co. v. Islamic Republic of Iran, Interim
Award No. ITM 34-222-1 (17 February 1984), 5 Iran-US C.T.R. 152,
154 (1985); Plama Consortium Ltd v. Republic of Bulgaria, Order,
ICSID Case No. ARB/03/24(6 September 2005), ¶¶38, 40, available
at http://icsid.worldbank.org (provisional measures appropriate “to
prevent parties from taking measures capable of having a prejudicial
effect on the rendering or implementation of an eventual award or
495
73
which might … render its resolution more difficult”); Tok ios Tok elés
v. Uk raine, Procedural Order No. 1, ICSID Case No. ARB/02/18(1
July 2003), available at http://icsid.worldbank.org (“parties to a
dispute over which ICSID has jurisdiction must refrain from any
measure capable of having a prejudicial effect on the rendering or
implementation of an eventual ICSID award or decision, … or render
its resolution more difficult”).
212 Yesilirmak, Interim and Conservatory Measures in ICC Arbitral
Practice, 11(1) ICC Ct. Bull. 31, 34 (2000) (need for “urgent” or
“prompt” relief); Lew, Commentary on Interim and Conservatory
Measures in ICC Arbitration Cases, 11(1) ICC Ct. Bull. 23, 27
(2000); Huntley, The Scope of Article 17: Interim Measures under
the UNCITRAL Model Law, 740 PLI/Lit. 1181, *75 (2005) (“referring
to Article 17 of Model Law, implicit within the term ‘necessary’ is the
notion that the party requesting a measure faces a harm to the
rights it is pursuing in the arbitration and that harm is so imminent
that the requesting party cannot await the tribunal's final decision on
the merits”); Biwater Gauff (Tanzania) Ltd v. United Republic of
Tanzania, Procedural Order No. 1, ICSID Case No. ARB/05/22 (31
March 2006), ¶75, available at http://icsid.worldbank.org (“Urgency”
is a “requirement[] that must be satisfied for the recommendation of
provisional measures”); Tok ios Tok elés v. Uk raine, Procedural
Order No.3, ICSID Case No. ARB/02/18(18 January 2005), ¶8,
available at http://icsid.worldbank.org (same); Tanzania Elec. Supply
Co. v. Independent Power Tanzania Ltd, Decision on the
Respondent's Request for Provisional Measures, ICSID Case No.
ARB/98/8 (20 December 1999), 1999 WL 34765678 ¶¶5(iv), 18
(same).
213 Partial Award in ICC Case (Unidentified), in Schwartz, The
and Provisional Measures in International Arbitration 45, 60 (1993).
Another tribunal required “a risk of serious and irreparable harm,

present or future, that would render indispensable harm, present or
future … that would render indispensable the taking of an immediate
decision such as to eliminate, avoid or reduce such harm.”Partial
Award in ICC Case (Unidentified), in Schwartz, The Practices and
Measures in International Arbitration 45, 60 (1993). See also Partial
Award in ICC Case (Unidentified), in Ibid. at 60 (“a situation has an
urgent character when it requires that measures be taken in order to
avoid that the legitimate rights of a party are not placed in peril”);
Interim Award in ICC Case No. 8894, 11(1) ICC Ct. Bull. 94, 97
(2000); Partial Award in ICC Case No. 8113, 11(1) ICC Ct. Bull. 65
(2000); Tok ios Tok elés v. Uk raine, Procedural Order No. 3, ICSID
Case No. ARB/02/18(18 January 2005), ¶8, available at
http://icsid.worldbank.org; United Tech. Int'l v. Islamic Republic of
Iran, Decision No. DEC 53-114-3(10 December 1986), 13 Iran-US
C.T.R. 254, ¶17 (1986).
214 C. Schreuer, The ICSID Convention: A Commentary Art. 47,

¶14 (2001).
496
215 UNCITRAL Model Law, 2006 Revisions, Art. 17A.
The apparent rationale is that the requirement of urgency is

subsumed within the related requirement of irreparable harm. This is
unconvincing. An express urgency requirement is essential, to
underscore the exceptional nature of provisional measures – which
affect the parties' rights before they have had an opportunity to
present their cases. It also is necessary to define the timing of when
provisional relief may properly be granted.
216 See Avco Corp. v. Iran Aircraft Indus., Order in Case No. 261,
(27 January 1984) (concluding there was no urgency because “the
Claimant asserts that no sale of any of the goods in question is
planned to take place before 1 January 1985”), reprinted in, D.
Caron, L. Caplan & M. Pellonpää, The UNCITRAL Arbitration Rules:
A Commentary 548 (2006); Schwartz, The Practices and Experience
of the ICC Court, in ICC, Conservatory and Provisional Measures in
International Arbitration 45, 60 (1993) (no order forbidding transfer of
goods when moving party could prevent such transfer without
tribunal's order).
217 See, e.g., Biwater Gauff(Tanzania) Ltdv. United Republic of
March 2006), ¶76, available at http://icsid.worldbank.org (“The
degree of ‘urgency’ which is required … may be satisfied where a
party can prove that there is a need to obtain the requested measure
at a certain point in the procedure before the issuance of an award.”)
(emphasis added); Tok ios Tok elés v. Uk raine, Procedural Order No.
3, ICSID Case No. ARB/02/18(18 January 2005), ¶8, available at
http://icsid.worldbank.org.
218 Id. See also Occidental Petroleum Corp. v. Republic of
Ecuador, Decision on Provisional Measures, ICSID Case No.
ARB/06/11 (17 August 2007), ¶91, available at
http://icsid.worldbank.org (no realistic likelihood of harm;
Interlocutory Award in ICC Case No. 10596, XXX Y.B. Comm. Arb.
66 (2005) (“it being understood that urgency is broadly interpreted”);
Partial Award in ICC Case No. 8113, 11(1) ICC Ct. Bull. 65, 67
(2000).
219 Tok ios Tok elés v. Uk raine, Procedural Order No. 3, ICSID
Case No. ARB/02/18(18 January 2005), ¶8, available at
http://icsid.worldbank.org (emphasis added). Where failure to issue
provisional measures would raise a risk of impairing a material right,
“the safest course at [an] early stage of the proceedings is to ensure
that no adverse step is taken to the same.” Biwater Gauff (Tanzania)
Ltd v. United Republic of Tanzania, Procedural Order No. 1, ICSID
Case No. ARB/05/22 (31 March 2006), ¶86, available at
220 See, e.g., Česk oslovensk a obchodní bank a asv. Slovak
Republic, Procedural Order No.3, ICSID Case No. ARB/97/4(5
November 1998), 2, available at http://icsid.worldbank.org (refusing
to impose provisional measures because Tribunal “ha[d] no reason
to assume that” the threatened harm might take place); Tanzania
497
Elec. Supply Co. v. Independent Power Tanzania Ltd, Decision on

the Respondent's Request for Provisional Measures, ICSID Case
No. ARB/98/8 (20 December 1999), 1999 WL 34765678, ¶18
(declining to find urgency where claimant failed to provide supporting
evidence that the threatened harm “may” take place, “or at least do
so in the foreseeable future.”).
221 See, e.g., C. Schreuer, The ICSID Convention: A Commentary
Art. 47 ¶¶1-3 (2001) (“the need not to prejudge the merits of the
case”); Emilio Agustín Maffezini v. Kingdom of Spain, Procedural
Order No. 2, ICSID Case No. ARB/97/7(28 October 1999), 16 ICSID
Rev.-For. Inv. L.J. 207, ¶21 (2001); J. Simpson & H. Fox,
International Arbitration: Law and Practice 162 (1959) (“capable of
prejudicing the execution of any decision, which may be given by
the tribunal”).
223 This is usefully made express by the 2006 revisions to the
UNCITRAL Model Law. UNCITRAL Model Law, 2006 Revisions, Art.
17(A)(1)(b) (“There is a reasonable possibility that the requesting
party will succeed on the merits of the claim. The determination on
this possibility shall not affect the discretion of the arbitral tribunal in
making any subsequent determination”).
224 See infra pp. 1989-1992.
225 For an example, see Lew, Commentary on Interim and
23, 27 (2000) (citing Award in ICC Case No. 8115 for proposition that
“if the request for relief is made on both an interim and a permanent
basis, only the latter will, in principle, be granted”).
226 There will be circumstances where one party seeks an
immediate partial award as to part, but not all, of its claim, either
because the issue or liability is not disputed or because (in its
submission) the evidence/law is unequivocal. It may be appropriate
to grant such relief (subject to applicable law and ensuring that the
parties have had an adequate opportunity to be heard). See infra pp.
2430-2433.
227 UNCITRAL Model Law, 2006 Revisions, Art. 17A(1)(b). It is, of
course, obvious that a party need not prove that it will ultimately
prevail on its claims in order to obtain interim measures. E.g., Wirth,
Arbitration in Switzerland, 18 ASA Bull. 31, 37-8 (2000) (“reasonable
probability” that requesting party is entitled to prevail on underlying
claim; “prima facie case”).
See also Yesilirmak, Interim and Conservatory Measures in ICC
Arbitral Practice, 11(1) ICC Ct. Bull. 31, 34 (2000) (“the prima facie
test [i.e., for establishment of a case on the merits] is gain[ing]
substantial recognition”); Blessing, State Arbitrations: Predictably
Unpredictable Solutions ?, 22 J. Int'l Arb. 435 (2005) (“Basically, the
party seeking interim relief will have to demonstrate the following: …
498
a likelihood of success on the merits, or as per the ‘softer’ wording

of the UNCITRAL draft, ‘a reasonable possibility that the requesting
party will succeed on the merits”); D. Caron, L. Caplan & M.
Pellonpää, The UNCITRAL Arbitration Rules: A Commentary 537
(2006) (“a party whose case is clearly without merit should not be
granted a request for interim measures”).
229 See, e.g., Biwater Gauff (Tanzania) Ltd v. United Republic of
March 2006), ¶95, available at http://icsid.worldbank.org (tailoring
order regarding the preservation of documents to those “located” in
offices the ownership of which were the subject of dispute to avoid
pre-judging the merits); Tanzania Elec. Supply Co. v. Independent
Power TanzaniaLtd, Decision on the Respondent's Request for
Provisional Measures, ICSID Case No. ARB/98/8 (20 December
1999), 1999 WL 34765678, ¶6 (declining to address the merits,
instead “only address[ing] jurisdiction, nature of request, and
circumstances justifying request”); Interim Award in ICC Case No.
8894, 11(1) ICC Ct. Bull. 94 (2000); Partial Award in ICC Case No.
3896, 110 J.D.I. (Clunet) 914 (1983). See also Merrills, Interim
Measures of Protection in the Recent Jurisprudence of the
International Court of Justice, 44 Int'l & Comp. L.Q. 90, 114 (1995)
(discussing the ICJ's rejection of a “likelihood of success on the
merits” element for provisional measures under international law); J.
Lew, L. Mistelis & S. Kröll, Comparative International Commercial
Arbitration ¶23-62 (2003) (“the requirement of a good arguable case
on the merits … has received mixed reactions … due to the fact that
unlike court proceedings, where the judge granting interim relief will
frequently be different from the judge dealing with the merits of the
case, in arbitration the same tribunal will deal with both issues.”).
International Commercial Arbitration ¶23-62 (2003) (“To avoid any
appearance of prejudgment arbitrators are invariably reluctant to
express their views on the merits before they have considered at
least a significant amount of the evidence presented by the parties.
For this reason the merits of the case rarely play any direct role in
determining whether or not interim relief is granted.”); Partial Award
in ICC Case No. 8113, 11(1) ICC Ct. Bull. 65 (2000) (“the granting of
the measure requested by Claimant implies a pre-judgment of the
dispute”); Yesilirmak, Interim and Conservatory Measures in ICC
Arbitral Practice, 11(1) ICC Ct. Bull. 31 (2000) (“if a tribunal cannot
grant an interim or conservatory measure without examining the
merits of the case, it may refrain from doing so, in order not to pre-
judge on the merits”); Lew, Commentary on Interim and
23 (2000) (“whilst wishing to protect a situation so the award can be
effective and meaningful, they will also be reluctant to show their
thinking in advance when all the evidence and argument has not
been considered”); C. Schreuer, The ICSID Convention: A
Commentary Art. 47, ¶2 (2001) (tribunal must “strike a careful
balance between the urgency of a request for provisional measures
and the need not to prejudge the merits of the case”).
231 See supra pp. 1988-1989.
499
232 Main, Court Ordered Interim Relief: Developments in English

Arbitration Law, 22 J. Int'l Arb. 505 (2005); R. Frank, G. Straeuli &
H. Messmer, Kommentar zur zürcherischen Zivilprozessordnung
§222, ¶¶15 et seq. (3d ed. 1997); 42 Am.Jur.2d Injunctions §16
(2004) (in U.S. federal courts, a plaintiff seeking a preliminary
injunction must show a likelihood of success on the merits);
Leubsdorf, The Standard for Preliminary Injunctions, 91 HVLR 525
(1978) (same); Hory, Mesures d'instruction in futurum et arbitrage
1996 Rev. arb. 191; Baker, De Fontbressin, The French Référé
Procedure - A Legal Miracle?, 2 U. Miami Y.B. Int'l L. 1 (1992-1993);
Hirtz, Darlegungs- und Glaubhaftmachungslast im einstweiligen
Rechtsschutz, 1986 NJW 110.
233 J. Lew, L. Mistelis & S. Kröll, Comparative International
Commercial Arbitration ¶23-68 (2003) (“The arbitration tribunal must
at least have prima facie jurisdiction in the main action”); Partial
Award in ICC Case No. 8113, 11(1) ICC Ct. Bull. 65, 69 (2000); D.
Caron, L. Caplan & M. Pellonpää, The UNCITRAL Arbitration Rules:
A Commentary 535 (2006) (“Whether an arbitral tribunal must satisfy
itself that it has jurisdiction over the subject matter of the dispute
(and over the parties) before deciding to order interim measures is a
question which has generated considerable legal writing and caused
practical problems for various international courts and tribunals.”);
Bernhard, Shore, Volin & Young, Court's Power to Give Interim
Relief Before Appointment of Arbitrators: Comments on Cetelem SA
v. Roust Holdings Limited, 24 ASA Bull. 143 (2006); J.-F. Poudret &
S. Besson, Comparative Law of International Arbitration ¶626 (2d
ed. 2007); Bendone-Derossi Int'l v. Islamic Republic of Iran, Interim
Award No. ITM 40-375-1) (7 June 1984), 6 Iran-US C.T.R. 130 (1984)
(requiring prima facie case on the merits).
234 As noted above, provisional measures are frequently sought at
the outset of an arbitration. See supra pp. 1970-1971. This is, of
course, the same time that jurisdictional challenges are typically
raised (and most likely to be unresolved). It is therefore important as
a practical matter that tribunals not be incapacitated from issuing
provisional measures, which may be central to a fair resolution of the
parties' dispute, because of a jurisdictional challenge (which may
well be tactical in nature).
235 Shihata & Parra, The Experience of the International Centre for
Settlement of Investment Disputes, 14 ICSID Rev.-For. Inv. L.J. 299,
326 (1999).
Indeed, some arbitral tribunals have refused to address the question

of jurisdiction at all during the provisional measures phase. See,
e.g., Tok ios Tok elés v. Uk raine, Procedural Order No. 1, ICSID
Case No. ARB/02/18(1 July 2003), ¶6, available at
http://icsid.worldbank.org; Biwater Gauff (Tanzania) Ltd v. United
Republic of Tanzania, Procedural Order No. 1, ICSID Case No.
ARB/05/22 (31 March 2006), ¶70, available at
http://icsid.worldbank.org (“It is also clear … that a party may be
exposed to provisional measures even though it contends that ICSID
has no jurisdiction.”). See also Merrills, Interim Measures of
Protection in the Recent Jurisprudence of the International Court of
Justice, 44 Int'l & Comp. L.Q. 90, 92 (1995) (ICJ requires only that
500
78
the applicant's case appears “prima facie to afford a basis on which

the jurisdiction of the Court might be founded”).
236 See, e.g., Case Concerning Military and Paramilitary Activities

in and against Nicaragua (Nicaragua v. United States), Order of 10
May 1984, [1984] I.C.J. Rep. 169, 179 (I.C.J.) (“On a request for
provisional measures, the Court need not, before deciding whether or
not to indicate them, finally satisfy itself that it has jurisdiction on
the merits of the case, or, as the case may be, that an objection
taken to jurisdiction is well-founded, yet it ought not to indicate such
measures unless the provisions invoked by the Applicant appear,
prima facie, to afford a basis on which the jurisdiction of the Court
might be founded.”); Bendone-Derossi Int'l v. Islamic Republic of
Iran, Interim Award No. ITM 40-375-1 (7 June 1984), 6 Iran-US
C.T.R. 130, 131-33 (1984) (declining to order provisional measure
because “the Tribunal is not at present satisfied that it appears,
prima facie, that there exists a basis on which it can exercise
jurisdiction”); United States of America, on behalf of and for the
benefit of Tadjer-Cohen Assoc. v. Islamic Republic of Iran, Award
No. ITM 50-12118-3 (11 November 1985), 9 Iran-US C.T.R. 302,
304-5 (1985) (“The Tribunal is satisfied that there is at least a prima
facie showing that it has jurisdiction over the substantive claim
pending before it. Such preliminary determination is, however,
without prejudice to the Tribunal's final decision on jurisdiction”).
Arbitration Rules: A Commentary 536-37 (2006) (“although the
tribunal may not order interim measures in the absence of
jurisdiction over the merits of the case, considerations of urgency
dictate that a prima facie showing of jurisdiction is sufficient at the
stage that interim measures are requested”).
238 Yesilirmak, Interim and Conservatory Measures in ICC Arbitral
Practice, 11(1) ICC Ct. Bull. 31, 33 (2000).
Arbitration Rules: A Commentary 536 (2006) (“the Rules provide that
interim measures should be ‘necessary’ – not just ‘desirable’ or
‘recommendable’”).
241 See supra pp. 1965-1966.
242 See supra pp. 1951-1958, 1968-1970. In turn, as discussed
above, national law limitations are subject to the New York
Convention. See supra pp. 1948-1949, 1963-1964.
243 See supra pp. 1958-1961, 1973-1974.
244 Y. Derains & E. Schwartz, A Guide to the ICC Rules of
Arbitration 296-297 (2d ed. 2005) (“The variety of conservatory and
interim measures encountered in connection with international
arbitration proceedings is enormous ….”).
245 It is clear that arbitrators have the inherent power to issue a
broad range of types of provisional measures, even if applicable law
or institutional rules do not specifically identify such categories of
501
79
relief. D. Caron, L. Caplan & M. Pellonpää, The UNCITRAL

Arbitration Rules: A Commentary 539 (2006) (types of provisional
measures listed in Article 26(1) of UNCITRAL Rules are only
examples); Sanders, Commentary on the UNCITRAL Arbitration
Rules, II Y.B. Comm. Arb. 172, 196 (1977).
246 UNCITRAL Model Law, 2006 Revisions, Art. 17(2) (“An interim
measure is any temporary measure, whether in the form of an award
or in another form, by which, at any time prior to the issuance of the
award by which the dispute is finally decided, the arbitral tribunal
orders a party to: (a) Maintain or restore the status quo pending
determination of the dispute; (b) Take action that would prevent, or
refrain from taking action that is likely to cause, current or imminent
harm or prejudice to the arbitral process itself; (c) Provide a means
of preserving assets out of which a subsequent award may be
satisfied; or (d) Preserve evidence that may be relevant and material
to the resolution of the dispute.”).
247 See, e.g., UNCITRAL Model Law, 2006 Revisions, Art. 17(2)(a).
248 International arbitral tribunals have not infrequently issued or
accepted the availability of such orders. See, e.g., Final Award in
ICC Case No. 7895 (party ordered to refrain from selling other party's
products), 11(1) ICC Ct. Bull. 64, 65 (2000); Final Award in ICC
Case No. 9324 (party ordered to reimburse amount of letter of credit
if such letter of credit were called), in Lew, Commentary on Interim
and Conservatory Measures in ICC Arbitration Cases, 11(1) ICC Ct.
Bull. 23, 29 (2000); Tanzania Elec. Supply Co. v. Independent
Power Tanzania Ltd, Decision on the Respondent's Request for
Provisional Measures, ICSID Case No. ARB/98/8 (20 December
1999), 1999 WL 34765678 ¶¶5(iii), 15; Plama Consortium Ltd v.
Republic of Bulgaria, Procedural Order, ICSID Case No.
ARB/03/24(6 September 2005), ¶38, available at
National courts have also upheld such orders. See, e.g., Judgment
of 24 November 1999, 4 Sch 03/99, reported at www.dis-arb.de
(Oberlandesgericht Thüringen); Borden, Inc. v. Meiji Milk Prods. Co.,
919 F.2d 822 (2d Cir. 1990).
249 See authorities cited infra pp. 1996-1997 nn. 252-256, 2001-
2002; UNCITRAL Model Law, 2006 Revisions, Art. 17(2)(1)
(“maintain or restore the status quo pending determination of the
dispute”).
250 See Art. 2.1(a) ICC Rules for Pre-Arbitral Referee (“The powers
of the Referee are: To order any conservatory measures or any
measures of restoration …”). Equally, the revisions to the
UNCITRAL Model Law expressly empower tribunals to order interim
measures restoring the status quo. Donovan, The Scope and
Enforceability of Provisional Measures in International Commercial
Arbitration: A Survey of Jurisdictions, the Work of the UNCITRAL
and Proposals For Moving Forward, 82-149, 123 (ICCA Congress
Series No. 11 2003); Component Builders, Inc. v. Islamic Republic
of Iran, Order, Case No. 395 (10 January 1985), XI Y.B. Comm. Arb.
502
359 (1986) (ordering the requested provisional measure and finding

that “ability to order temporary restrictions on parties may be vitally
necessary to preserve the status quo”); Emilio Augustín Maffezini v.
Kingdom of Spain, Procedural Order No. 2, ICSID Case No.
ARB/97/7(28 October 1999), 16 ICSID Rev.-For. Inv. L.J. 207, ¶14
(2001) (denying request on the basis of the facts of the case, but
stating that “[a] provisional measure could be ordered to … preserve
the status quo of the property, thus preserving the rights of the party
in the property”).
251 K.-P. Berger, International Economic Arbitration 339 (1993)
(emphasis added). Or, as explained by another commentary, interim
measures may be designed “to preserve the status quo pending
arbitration.” W. Craig, W. Park & J. Paulsson, Annotated Guide to
the 1998 ICC Arbitration Rules 137 (1998).
252 Extract from a Procedural Order in ICC Arbitration No. 12
(1989), 12 ASA Bull. 142 (1994). See also UNCITRAL Model Law,
2006 Revisions, Art. 17(2)(a); Award in ICC case (Unidentified), in
61 (1993) (“essential, until the final award on all the claims and
counterclaims, that the contractual provisions agreed between the
parties keep producing all their effects”); Extract from a Procedural
Order in ICC Arbitration No. 12 (1989), 12 ASA Bull. 142, 142 (1994)
(ordering that parties abide by the terms of contract for a specified
time limit); Islamic Republic of Iran v. United States of America,
Decision No. DEC 116-A15(IV) & A24-FT (18 May 1993), 29 Iran-US
C.T.R. 214 (1993) (refusing to order provisional measures because
they “would not operate so as to maintain the status quo in the
continuing proceedings, … but would modify that status quo”);
Committee on International Civil and Commercial Litigation,
Principles on Provisional and Protective Measures in International
Litigation, reprinted in, ILA, Report of the Sixty-Seventh Conference,
Helsink i 202, ¶1 (1996) (provisional measures “maintain the status
quo pending determination of the issues at trial” or “secure assets”).
253 See, e.g., Tanzania Elec. Supply Co. v. Independent Power
Tanzania Ltd, Decision on the Respondent's Request for Provisional
Measures, ICSID Case No. ARB/98/8 (20 December 1999), 1999
WL 34765678, ¶¶5(iii), 15 (Tribunal must determine whether
provisional measures would “maintain the ‘status quo’”); Plama
Consortium Ltd v. Republic of Bulgaria, Order, ICSID Case No.
ARB/03/24(6 September 2005), ¶38, available at
http://icsid.worldbank.org (provisional measures appropriate “to
preserve the status quo”); C. Schreuer, The ICSID Convention: A
Commentary Art. 47 ¶¶78-80 (2001) (“[t]he references in the travaux
préparatoires [of the ICSID Convention] to the preservation of the
status quo … are an expression of the principle that in the course of
litigation the parties must refrain from taking steps that might affect
the rights of the side which are the object of the proceedings on the
merits. This is particularly so where … a business is at stake which
may be damaged through unilateral action…”).
254 Wirth, Interim or Preventive Measures in Support of
International Arbitration in Switzerland, 18 ASA Bull. 31, 33 (2000).
503
See Bond, The Nature of Conservatory and Provisional Measures, in

Arbitration 8, 9 (one of the principal purposes of conservatory and
provisional measures; it ensures “that the very purpose of the
litigation is not frustrated while awaiting the pronouncement and
enforcement of a final decision on the merits”) (1993) (emphasis
added); Award in ICC Case No. 6632, in Reiner, Les mesures
provisoires et conservatoires et L'Arbitrage international, notamment
l'Arbitrage CCI, 125 J.D.I. (Clunet) 853, 890 (1998) (referring to the
“general principle according to which the parties ought to take such
reasonable steps as are necessary to render the arbitration
proceedings effective. It also means that the arbitrators can order
measures to prevent the breach of this principle”); Extract from a
Procedural Order in ICC Arbitration No. 12 (1989), 12 ASA Bull.
142, 144 (1994); ICSID Regulations and Rules, ICSID/4/Rev. 1, at
104 (May 1975) (Notes) (provisional measures were designed in part
to allow Tribunals, during the pendency of arbitration, to prevent the
parties from “tak[ing] steps that might … prejudice the execution of
the award”); C. Schreuer, The ICSID Convention: A Commentary
Art. 47 ¶¶14-15 (2001); Plama Consortium Ltd v. Republic of
Bulgaria, Order, ICSID Case No. ARB/03/24(6 September 2005),
¶40, available at http://icsid.worldbank.org (“the requesting party's
ability to have its claims and requests for relief in the arbitration fairly
considered and decided by the arbitral tribunal and for any arbitral
decision which grants to the Claimant the relief it seeks to be
effective and able to be carried out.”); Tok ios Tok elés v. Uk raine,
Procedural Order No. 1, ICSID Case No. ARB/02/18(1 July 2003),
¶2, available at http://icsid.worldbank.org (“The parties to a dispute
over which ICSID has jurisdiction must refrain from any measure
capable of having a prejudicial effect on the rendering or
implementation of an eventual ICSID award or decision, … or render
its resolution more difficult.”); Rock well Int'l Systems, Inc. v. Islamic
Republic of Iran, Award No. ITM 20-430-1 (6 June 1983), 2 Iran-US
C.T.R. 369, 371 (1983) (“the tribunal has an inherent power to issue
such orders as may be necessary to conserve the respective rights
of the parties and to ensure its jurisdiction and authority are made
fully effective.…”).
255 Interim Award in ICC Case No. 8879, 11(1) ICC Ct. Bull. 84, 89
(2000).
256 Amco Asia Corp. v. Republic of Indonesia, Decision on
Request for Provisional Measures, ICSID Case No. ARB/81/1 (9
December 1983), XI Y.B. Comm. Arb. 159, 159-160 (1986)
(provisional measures appropriate if a challenged action “could …
[do] any actual harm …. [or] aggravate or exacerbate the legal
dispute now put before the tribunal”); Tanzania Elec. Supply Co. v.
Independent Power Tanzania Ltd, Decision on the Respondent's
December 1999), 1999 WL 34765678, ¶12 (recognizing the need for
“measures that will prevent the erosion of rights pending final
resolution of the dispute”); Tok ios Tok elés v. Uk raine, Procedural
Order No. 1, ICSID Case No. ARB/02/18(1 July 2003), ¶2, available
at http://icsid.worldbank.org.
257 See UNCITRAL Model Law, 2006 Revisions, Arts. 17(2)(a) &
504
17(2)(c); UNCITRAL Rules, Art. 26(1) (“measures for the

conservation of the goods forming the subject-matter of the dispute,
such as ordering their deposit with a third person or the sale of
perishable goods”); LCIA Rules, Art. 25(1)(b) (“order the
preservation, storage, sale or other disposal of any property”); CPR
Arbitration Rules, Rule 13.
International arbitral tribunals have not infrequently issued such

orders. See supra p. 1906 & infra pp. 2006-2008.
258 Emilio Augustin Maffezini v. Kingdom of Spain, Procedural

Order No. 2, ICSID Case No. ARB/97/7(28 October 1999), 16 ICSID
Rev.-For. Inv. L.J. 207, ¶14 (2001). See Schreuer, Non-Pecuniary
Remedies in ICSID Arbitration, 20 Arb. Int'l 325, 332 (2004)
(recognizing “restitution of seized property” as the paradigm case for
provisional measures).
259 In one ICC award, the Tribunal held: “In the present case, A
requests the Arbitral Tribunal to place the parties again in the
position in which, with respect to the guarantees, they were at
commencement of the arbitration. The Arbitral Tribunal observed
already that B did not comply with the contract in calling the
guarantees before the drawing up of the final account, while A was
prepared to prolong the guarantees. Ordering that the parties be
placed again in the position in which they were at the beginning of
the proceedings and that they remain in this position until the final
award is a conservatory measure in the wider sense which finds its
place among the measures which the arbitrator may order on the
basis of Article 183 [of the Swiss Law on Private International Law].
It is all the more necessary when the contractual equilibrium, as the
parties had intended it, must be restored. Limited to the duration of
the arbitration, the measure does not prejudge the merits.” Order in
ICC Case No. 7388, quoted by Reiner, Les mesures provisoires et
conservatoires et L'Arbitrage international, notamment l'Arbitrage
CCI, 125 J.D.I. (Clunet) 853, 886 (1998) (emphasis added).
260 Award in ICC Case No. 6503, 122 J.D.I. (Clunet) 1022 (1995)
(ordering parties to continue to perform contract notwithstanding pre-
arbitration termination notice).
261 There is no serious basis for arguing that a tribunal lacks
authority to require a party to restore a state of facts that existed
prior to the commencement of the arbitration. The date of filing an
arbitration in no way restricts a tribunal's authority over actions
occurring after that date, any more than a tribunal in its final award
would be prevented from ordering such a result.
262 See supra pp. 1996-1999. Other tribunals remark that the
existence of a prima facie case is irrelevant to the decision whether
to grant provisional measures. See supra p. 1990.
263 See UNCITRAL Model Law, 2006 Revisions, Art. 17(2)(b) (“take
action that would prevent, or refrain from taking action that is likely
to cause, current or imminent harm or prejudice to the arbitral
process itself”).
264 See infra pp. 2249-2287.
505
83
265 Order in ICC Case No. 7388, in Reiner, Les mesures

provisoires et conservatoires et L'Arbitrage international, notamment
l'Arbitrage CCI, 125 J.D.I. (Clunet) 853, 889, n.82 (1998).
The 2006 revisions to the UNCITRAL Model Law do not expressly

refer to orders precluding aggravation of the parties' dispute,
although providing for an order that a party “[t]ake action that would
prevent, or refrain from taking action that is likely to cause, current
or imminent harm or prejudice to the arbitral process itself.”
UNCITRAL Model Law, 2006 Revisions, Art. 17(2)(b).
266 Tok isTok elés v. Uk raine, Order No. 1, ICSID Case No.
ARB/02/18(1 July 2003), ¶2 (emphasis added). Similarly, the
Permanent Court of International Justice explained in Electricity
Company of Sofia and Bulgaria (Interim Measures of Protection) that
“parties to a case must abstain from any measure capable of
exercising a prejudicial effect in regard to the execution of the
decision to be given and, in general, not allow any step of any kind
to be taken which might aggravate or extend the dispute.” PCIJ,
Series A/B, No 79, 194 at 199. See alsoNuclear Tests (Australia v.
France), [1973] I.C.J. Rep. 99, 104, 106 (I.C.J.) (“no action of any
kind is taken which might aggravate or extend the dispute submitted
to the Court”).
267 Amco Asia Corp. v. Republic of Indonesia, Decision on
December 1983), XI Y.B. Comm. Arb. 159, 161 (1986). In Amoco v.
Indonesia such a risk of aggravation and exacerbation did not exist.
However, “[t]he Tribunal's evaluation of the factual situation … and
its finding … creates the impression that, given the right
circumstances, provisional measures against an aggravation of
dispute [would have been] possible.” Schreuer, The ICSID
Convention – A Commentary: Article 47, 13 ICSID Rev.-For. Inv. L.J.
208, 240 (1998).
Other ICSID authorities are to the same effect. SeeTanzania Elec.

Supply Co. v. Independent Power Tanzania Ltd, Decision on the
Respondent's Request for Provisional Measures, ICSID Case No.
ARB/98/8(20 December 1999), 1999 WL 34765678, ¶12
(recognizing the need for “measures that will prevent the erosion of
rights pending final resolution of the dispute”); ICSID Arbitration
Rules, Rule 39, Note A, 1 ICSID Reports 99 (1968) (“[The right to
provisional measures] is based on the principle that once a dispute
is submitted to arbitration, the parties should not take steps that
might aggravate or extend their dispute or prejudice the execution of
the award.”); ICSID Regulations and Rules, ICSID/4/Rev. 1, at 104
(May 1975) (Notes) (“Article 47 of the Convention … is based on the
principle that once a dispute is submitted to arbitration the parties
should not take steps that might aggravate or extend their dispute.”).
268 Partial Award in ICC Case No. 3892, in S. Jarvin & Y. Derains
(eds.), Collection of ICC Arbitral Awards 1974-1985 161, 164 (1990);
506
Partial Award in ICC Case No. 3896, 110 J.D.I. (Clunet) 914, 918
(1983) (“the Arbitral Tribunal considers that there exists, undeniably,
the risk of the dispute before it becoming aggravated or magnified,
and that the parties should, in the same spirit of goodwill that they
have already demonstrated in signing the Terms of Reference, refrain
from any action likely to widen or aggravate the dispute, or to
complicate the task of the Tribunal or even to make more difficult,
one way or another, the observance of the final arbitral award.”).
Arbitration 45, 61 (1993). See also Partial Award in ICC Case
(Unidentified), Ibid., at 61 (ordering parties to withdraw all related
litigation and extend bank guarantees to be payable in accordance
with tribunal's final award); Award in ICC Case No. 3896, 110 J.D.I.
(Clunet) 914 (1983) (to prevent aggravation of parties' dispute,
tribunal orders party not to call bank guarantees).
270 Orders requiring preservation of disputed property are
discussed further below. See infra pp. 2006-2008.
271 LCIA Rules, Art. 25(1)(c).
272 Interim Award in ICC Case No. 8894, 11(1) ICC Ct. Bull. 94,
97-98 (2000) (party ordered to petition administrative authority to
cancel license and import permission); Award in ICC Case No.
6503, 122 J.D.I. (Clunet) 1022 (1995) (order to continue executing a
long-term contract pending award); Texaco Overseas Petroleum Co.
v. Libyan Arab Republic, Ad Hoc Award (19 January 1977), IV Y.B.
Comm. Arb. 177 (1979) (party ordered to abide by its contract and
restore the parties to their original position).
273 Bond, The Nature of Conservatory and Provisional Measures,
in ICC, Conservatory and Provisional Measures in International
Arbitration 8, 11 (1993). Similarly, Professor Reymond concluded
that: “If it is justified by the protection of the interest in issue, the
arbitrator may even order the provisional performance of the parties'
obligations until the matter has been decided …” P. Lalive, J.-F.
Poudret & C. Reymond, Le droit de l'arbitrage interne et international
en Suisse Art. 183, ¶7 (1989) (emphasis added). See alsoICSID
Decision of 1972, 12 ASA Bull. 148, 152 (1994) (inviting parties “to
abstain from all measures incompatible with the maintenance of the
contract and to assure that measures already taken in the future
have no effects contrary to this maintenance”).
and Provisional Measures in International Arbitration 45, 61-62
(1993).
275 See infra p. 2482 & n. 336.
276 See, e.g., UNCITRAL Model Law, Art. 17(2)(c) (“provide a
means of preserving assets out of which a subsequent award may
be satisfied”); Swedish Arbitration Act, §25(4) (“interim measures to
secure the claim”); LCIA Rules, Art. 25(1)(a) (“provide security for all
or part of the amount in dispute”); NAI Rules, Art. 38(1) (“provide
security”); CEPANI Rules, Art. 17(1).
507
For awards ordering the provision of security for the underlying

claims, seeInterim Award in NAI Case No. 1694 (12 December
1996), XXIII Y.B. Comm. Arb. 97 (1998); Final Award in ICC Case
No. 7536, in Lew, Commentary on Interim and Conservatory
Measures in ICC Arbitration Cases, 11(1) ICC Ct. Bull. 23, 29 (2000)
(requiring deposit of specified amount into escrow); Interim Awards
in ICC Case No. 8670, 11(1) ICC Ct. Bull. 77 (2000) (ordering
provisional payments to one party, on condition that receiving party
posts security in amounts of such payments); Final Award in ICC
Case No. 9154, 11(1) ICC Bull. 98 (2000) (requiring deposit of
disputed funds into escrow account).
For national court authority considering such orders, see Loral Corp.
v. Swiftships, Inc., 77 F.3d 420 (11th Cir. 1996) (confirming arbitral
award requiring defendant to deposit milestone payments received
from third party into escrow account); Certain Underwriters at
Lloyd's, London v. Argonaut Ins. Co., 264 F.Supp.2d 926 (N.D. Cal.
2003) (confirming interim award requiring party to “either make an
interim cash payment to the claim or post a Letter of Credit”);
F.Supp. 267, 271 (S.D.N.Y. 1987) (upholding tribunal's order, prior to
conducting hearing, that one party post security for claims against
it: “The issue of security … was implicit in the submission of the
main dispute to the Panel”); Compania Chilena De Navegacion
Interoceanica, SA v. Norton, Lilly & Co., 652 F.Supp. 1512, 1516
(S.D.N.Y. 1987); Sperry Int'l Trade, Inc. v. Israel, 532 F.Supp. 901,
905 (S.D.N.Y. 1982), aff'd, 689 F.2d 301 (2d Cir. 1982). But see
Swift Indus., Inc. v. Botany Indus., Inc., 466 F.2d 1125 (3d Cir.
1972).
277 This is because an attachment entails orders against third

parties, not subject to the tribunal's jurisdiction. See supra pp. 1965-
1966.
International Arbitration in Switzerland, 18 ASA Bull. 31, 34 (2000)
(“[According to a majority of authors] measures for the securing of
money claims are a matter entirely governed by the Swiss Debt
Enforcement Act”). This is, however, a matter of debate. Compare
Berti, in S. Berti et al. (eds.), International Arbitration in Switzerland,
Art. 183, ¶12 (2000) (“There is no reason why an international
arbitral tribunal with seat in Switzerland should not order a party to
refrain from disposing of specific assets.”).
Other tribunals have refused to grant what they have considered to
be an unlawful or inappropriate preference to one creditor as against
other creditors of a failing or insolvent company. Ibid. at 62.
281 Y. Derains & E. Schwartz, A Guide to the ICC Rules of
Arbitration 296-297 (2d ed. 2005); W. Craig, W. Park & J. Paulsson,
508
86
Annotated Guide to the 1998 ICC Arbitration Rules 138 (1998).

282 For a discussion of awards of legal costs in international
arbitration, see infra pp. 2498-2501. See generally Fitzpatrick,
Security for Costs under the Arbitration Act, 1996, 1998 Int'l Arb. L.
Rev. 139; Hsu, Orders for Security for Costs and International
Arbitration in Singapore, 2000 Int'l Arb. L. Rev. 108; Rubins, In God
We Trust, All Others Pay Cash: Security for Costs in
InternationalCommercial Arbitration, 11 Am. Rev. Int'l Arb. 306
(2000); Soo, Securing Costs in Hong Kong Arbitration, 2000 Int'l
Arb. L. Rev. 25.
283 Lindow v. Barton McGill Marine Ltd, CP13-SD/02 (Auckland
High Court New Zealand 1 November 2002) (Article 17 does not
grant arbitrator power to order security for costs); Yieldworth Eng'rs
v. Arnhold & Co. Ltd, [1992] 1 HKLR 34 (H.K. High Court, S.Ct.)
(1991) (arbitral tribunal lacks authority under Model Law to order
security for costs unless specifically authorized by parties).
284 English Arbitration Act, 1996, §38(3); R. Merkin, Arbitration
Law ¶¶14.65 to 14.75 (2004 & Update 2007).
285 See, e.g., Singapore International Arbitration Act, §12(1).
286 LCIA Rules, Art. 25(2) (“provide security for the legal or other
costs of any other party”). See also HKIAC Domestic Rules, Art.
11.1; SIAC Rules, Art. 24.
287 See, e.g., Interim Award in ICC Case No. 8223, 11(1) ICC Ct.
Bull. 71 (2000); Interim Awards in ICC Case No. 8670, 11(1) ICC Ct.
Bull. 77 (2000); Order No. 4 in Zurich Chamber of Commerce, Case
No. 415 (20 November 2001), 20 ASA Bull. 467 (2002).
288 See, e.g., A. Bucher & P.-Y. Tschanz, International Arbitration
in Switzerland ¶161 (1988); Order No. 6 in Zurich Chamber of
Commerce of 12 November 1991, 13 ASA Bull. 84, 90 (1995).
CompareAward of 21 December 1998, 17 ASA Bull. 59, 62 et seq.
(1999) (potential for non-enforceability of costs award held sufficient
grounds for security for costs, at least where party's access to
justice was not inhibited and principle of equal treatment was
respected).
289 See, e.g., Coppee-Lavalin SA/NV v. Ken-Ren Chem. and
Fertilizers Ltd [1994] 2 All E.R. 449 (House of Lords).
In principle, the fact that a party is domiciled outside the arbitral

seat, or has its assets abroad, should not be grounds for denying
security. That is because of the generally liberal international regime
for recognition and enforcement of foreign arbitral awards. However, if
a party is domiciled or has its assets in a state that is not a party to
the New York Convention (or a similar international agreement), then
the case for security for costs relief is materially enhanced.
290 Order No. 4 in Zurich Chamber of Commerce in Case No. 415

(20 November 2001), 20 ASA Bull. 467 (2002) (a party's insolvency
“is a common ground for granting security for costs”; “a mere
potential risk of non-enforceability of a future cost award [is treated
as] insufficient grounds; it rather emphasizes the requirement that
509
an order for security shall not unduly restrict the party's access to
arbitral justice…”).
291 See, e.g., Interim Award in ICC Case No. 8223, 11(1) ICC Ct.
Bull. 71 (2000); Interim Awards in ICC Case No. 8670, 11(1) ICC Ct.
Bull. 77 (2000).
292 Article 5 of the UNCITRAL Model Law forbids judicial
intervention in arbitral procedures, which readily should extend to
applications for judicial orders of security for the costs of an
arbitration. See supra pp. 1778-1782.
293 Coppee-Lavalin SA/NV v. Ken-Ren Chem. and Fertilizers Ltd
[1994] 2 All E.R. 449 (House of Lords); R. Merkin, Arbitration Law
¶¶14.66 to 14.67 (2004 & Update 2007).
294 English Arbitration Act, 1996, §§38(3), 44; U.K. Departmental
Advisory Committee on Arbitration Law, 1996, Report on the
Arbitration Bill (February 1996), reprinted in, 13 Arb. Int'l 275 (1997);
R. Merkin, Arbitration Law ¶¶14.46 to 14.48, 14.65 to 14.75 (2004 &
Update 2007).
295 Frontier Int'l Shipping Corp. v. The Owners and All Others
Interested in the Ship “Tavros,” [2000] F.C. 427, 445 (Federal Court
of Canada).
296 UNCITRAL Model Law, 2006 Revisions, Art. 17(2)(d) (“Preserve
evidence that may be relevant and material to the resolution of the
dispute”); English Arbitration Act, 1996, §38(4); Huntley, The Scope
of Article 17: Interim Measures under the UNCITRAL Model Law,
740 PLI/Lit. 1181, *77 (2005) (“most obvious type of authority
granted under Article 17 is protective measures directly relating to or
dealing with the subject matter of the dispute, [such as] the
preservation, custody or sale of goods that are the subject matter of
the dispute”).
Institutional arbitration rules generally recognize the same authority.

See, e.g., UNCITRAL Rules, Art. 26(1) (“measures it deems
necessary in respect of the subject-matter of the dispute, including
measures for the conservation of the goods forming the subject-
matter in dispute”); LCIA Rules, Art. 25(1)(b); ICC Rules, Art. 20(4).
297 See, e.g., UNCITRAL Rules, Art. 26(1) (“ordering their deposit
with a third person”); LCIA Rules, Arts. 22(1)(d), 25(1)(b); ICC Rules,
Arts. 20(4), (5).
Arbitral tribunals have not infrequently issued such relief. See, e.g.,
Interim Award in ICC Case No. 8879, 11(1) ICC Ct. Bull. 84, 89
(2000) (requiring deposit of shares into trust); Partial Award in ICC
Case No. 10040, in Lew, Commentary on Interim and Conservatory
Measures in ICC Arbitration Cases, 11(1) ICC Ct. Bull. 23, 29 (2000)
(requiring party to deliver customs forms for disputed goods,
disclose location of goods and refrain from disposing of goods);
United Tech. Int'l v. Islamic Republic of Iran, Decision No. DEC 53-
114-3(10 December 1986), 13 Iran-US C.T.R. 254 ¶16 (1986) (“the
arbitral tribunal may take any interim measures … for the
conservation of the goods forming the subject-matter in dispute ….”);
88 510 81/89
Behring Int'l, Inc. v. Islamic Republic of Iran, Interim and

Interlocutory Award No. ITM/ITL 52-382-3 (21 June 1985), 8 Iran-US
C.T.R. 238 (1985) (provisional measures requiring storage of goods
in appropriate facilities).
298 An arbitral tribunal's authority in this regard is discussed in

detail above. See supra pp. 1875 et seq. (especially 1906) & infra p.
2066.
299 UNCITRAL Model Law, 2006 Revisions, Art. 17(2)(d).
300 See supra pp. 1876-1879. CompareDelphi Petroleum Inc. v.
Derin Shipping & Trading Ltd, 73 F.T.R. 241 (1993) (court order
requiring third party to give evidence characterized as interim
measure).
301 Cf. UNCITRAL Model Law, 2006 Revisions, Art. 17A(2).
302 See supra pp. 1896-1909 & infra pp. 2066.
303 See supra pp. 1821-1822, 1896-1897.
304 Other authorities explicitly note that no showing of likelihood of
irreparable injury or urgency is necessary for orders regarding the
preservation of evidence. See, e.g., Biwater Gauff (Tanzania) Ltd v.
United Republic of Tanzania, Procedural Order No. 1, ICSID Case
No. ARB/05/22 (31 March 2006), ¶87, available at
http://icsid.worldbank.org (Tribunal's imposition of provisional
measures requiring protective measures for evidence “is not based
on any finding that [Respondent] … may act adversely in respect of
such documents”).
305 See supra p. 1998 nn. 257, 258 & p. 2001.
306 See supra pp. 1981-1985, 1989-1992.
307 See infra pp. 2249 et seq. (especially 2259-2260, 2261-2284).
308 See infra pp. 2430-2433, 2434-2435.
309 English Arbitration Act, 1996, §39. See R. Merkin, Arbitration
Law ¶18.7 (2004 & Update 2007); BMBF (No. 12) Ltd v. Harland and
Wolff Shipbuilding and Heavy Indus. Ltd [2001] 2 Lloyd's Rep. 227.
310 French New Code of Civil Procedure, Arts. 809(2), 873(2);
Netherlands Code of Civil Procedure, Art. 289. See E. Gaillard & J.
Savage (eds.), Fouchard Gaillard Goldman on International
Commercial Arbitration ¶¶1339-1345 (1999).
311 Judgment of 9 July 1979, 1980 Rev. arb. 78 (French Cour de
cassation civ. 3e). Parties may agree to exclude the “référé-
provision” procedure, but neither an arbitration agreement alone nor
incorporation of the ICC Rules has been held sufficient to constitute
such an exclusion. E. Gaillard & J. Savage (eds.), Fouchard Gaillard
Goldman on International Commercial Arbitration ¶1342 (1999).
312 Judgment of 18 June 1986, 1986 Rev. arb. 565 (French Cour
de cassation civ. 2e) (“where a dispute submitted to an arbitral
tribunal under an arbitration agreement is also put before a national
court, the latter must decline jurisdiction”); E. Gaillard & J. Savage
(eds.), Fouchard Gaillard Goldman on International Commercial
Arbitration ¶1344 (1999) (“the arbitral tribunal must not be
511
constituted”).
313 Requests for interim payments can be supported by claims
that a party requires the funds in order to continue operations, avoid
bankruptcy or fund participation in the arbitration.
314 See supra pp. 1004-1005, 1024, 1030-1031.
315 See supra pp. 1036-45. See also UNCITRAL Model Law, 2006
Revisions, Art. 17(2)(b).
316 See supra pp. 1036, 1044-45; G. Born & P. Rutledge,
International Civil Litigation in United States Courts 540-560 (4th ed.
2007).
317 G. Born & P. Rutledge, International Civil Litigation in United
States Courts 541, 550-552 (4th ed. 2007).
318 See, e.g., W. Hau, Positive Kompetenzk onflik te im
internationalen Zivilprozessrecht 201 (1996); D. Jasper, Forum
Shopping in England und Deutschland 126 (1990); Huntley, The
Scope of Article 17: Interim Measures under the UNCITRAL Model
Law, 740 PLI/Lit. 1181, *86 (2005) (Article 17 of Model Law
authorizes arbitrators to issue antisuit injunctions).
319 See, e.g., Award in ICC Case (Unidentified), in Schwartz, The
and Provisional Measures in International Arbitration 45, 61 (1993)
(ordering parties to withdraw all related litigation); Himpurna Calif.
Energy Ltd v. Republic of Indonesia, Procedural Order (7 September
1999), XXV Y.B. Comm. Arb. 109, 143-146 (2000); Component
Builders, Inc. v. Islamic Republic of Iran, Award No. ITM/ITL 51-
395-3 (27 May 1985), 8 Iran-US C.T.R. 216 (1985) (issuing antisuit
order because “both actions seek to adjudicate the same issues”);
Ford Aerospace & Comm. Corp. v. Gov't of Iran, Interim Award No.
ITM 16-93-2 (27 April 1983), 2 Iran-US C.T.R. 281, 282 (1983)
(ordering stay of duplicative proceedings); United States of America,
on behalf of and for the benefit of Tadjer-Cohen Assoc. v. Islamic
Republic of Iran, No. Award No. ITM 50-12118-3 (11 November
1985), 9 Iran-US C.T.R. 302, 304-5 (1985) (granting provisional
measures in form of antisuit injunction against Iranian judicial
proceeding). See alsoRCA Global Comm. Disc, Inc. v. Islamic
Republic of Iran, Case No. 160 (2 June 1983), 3 Iran-US C.T.R. 8
(1983) (temporary antisuit order).See also Caron, Interim Measures
of Protection: Theory and Practice in Light of the Iran-United States
Claims Tribunal, 46 Zeitschrift für ausländisches öffentliches Recht
und Völkerrecht 465, 486 (1986).
320 Paul Donin de Rosiere v. Islamic Republic of Iran, Award No.
ITM 64-498-1 (4 December 1986), 13 Iran-US C.T.R. 193, 194
(1986).
321 RCA Global Comm. Disc, Inc. v. Islamic Republic of Iran,
Award No. ITM 30-160-1 (31 October 1983), 4 Iran-US C.T.R. 9, 11-
12 (1983) (declining to order antisuit injunction, because “the
proceeding before the domestic courts concerns a dispute arising
out of a separate contract, and it involves a Party which is not a
Party in the case before the tribunal”); Paul Donin de Rosiere v.
Islamic Republic of Iran, Award No. ITM 64-498-1 (4 December
1986), 13 Iran-US C.T.R. 193 (1986) (same).
512
90
322 The parties would be free to exclude such authority but

generally do not do so.
323 See supra pp. 1972-1973 & infra pp. 2028-2066.
324 For a discussion of res judicata in the context of provisional
measures, see infra pp. 2012-2013, 2930-2933. Section 1041(2) of
the German version of the UNCITRAL Model Law provides that “the
court may, at the request of a party, permit enforcement of a
measure … unless application for a corresponding interim measure
has already been made to a court.” German ZPO, §1041(2). The
provision provides a form of attenuated res judicata with regard to
unsuccessful efforts to obtain court-ordered provisional measures.
325 Partial Award in ICC Case No. 4998, 113 J.D.I. (Clunet) 1139
(1986).
326 Award in ICC Case (Unidentified), in Schwartz, The Practices
and Experience of the ICC Court, in ICC, Conservatory and
Provisional Measures in International Arbitration 45, 57 (1993). See
also Partial Award in ICC Case No. 4126, in S. Jarvin & Y. Derain
(eds.), Collection of ICC Arbitral Awards 1974-1985 511, 513-514
(1990) (tribunal refuses to order provisional measures on grounds
that national court's prior refusal to do so was res judicata); Order
No. 5 of 2 April 2002 Regarding Claimant's Request for Interim
Relief in ICC Case, 21 ASA Bull. 810, 816 (2003) (“If the state court
orders or declines to order a measure, the parties cannot
subsequently resort to the arbitral tribunal to obtain a more favorable
ruling, and vice versa. Even if the state court was first approached
solely for the reason that the arbitral tribunal was not yet properly
constituted, the tribunal cannot later on, after its constitution,
reverse or modify the measure ordered by the state judge. What if a
subsequent request for reversal or modification of an order is based
on changed circumstances? Arguably, such a request should be
dealt with by the arbitral tribunal once it is constituted.”); Wirth,
Arbitration in Switzerland, 18 ASA Bull. 31, 43 (2000) (“If the state
court orders or declines to order a measure, the parties cannot
subsequently resort to the arbitral tribunal to obtain a more favorable
ruling, and vice versa”); D. Caron, L. Caplan & M. Pellonpää, The
UNCITRAL Arbitration Rules: A Commentary 545 (2006); G. Walter,
W. Bosch & J. Brönnimann, Internationale Schiedsgerichtsbark eit
in der Schweiz 147 (1991).
327 See infra pp. 2055-2057. Some national courts have expressly
qualified grants of provisional measures in aid of arbitration, to make
clear that the arbitral tribunal, when constituted, may revisit the
issue. See, e.g., PLD Telek om Inc. v. Commerzbank AG,
unreported (2000) (Q.B.) (Morison, J.) (arbitrators may reconsider
grant of court-ordered provisional measures); Merrill Lynch v.
Salvano, 999 F.2d 211 (7th Cir. 1993) (issuing provisional measures
“only until the arbitration panel is able to address whether the [relief]
should remain in effect. Once assembled, an arbitration panel can
enter whatever temporary injunctive relief it deems necessary to
maintain the status quo”).
328 See supra pp. 1004-1014, 1020-1024 & infra pp. 2947-2949.
513
91
329 The application of preclusion principles is discussed below.

See infra pp. 2930-2933.
330 See, e.g., Blumenthal v. Merrill Lynch, Pierce, Fenner & Smith,
Inc., 910 F.2d 1049 (2d Cir. 1990) (upholding arbitral tribunal's power
to discontinue court-ordered provisional measures); Merrill Lynch,
Pierce, Fenner & Smith, Inc. v. Bradley, 756 F.2d 1048, 1054 (4th
Cir. 1985) (“Nor can we accept … that the district court's preliminary
injunction will prejudice the arbitrator's subsequent decision on the
merits. The arbitrators are sworn to render a decision based solely
on the evidence presented to them.”); Sperry Int'l Trade, Inc. v. Gov't
of Israel, 689 F.2d 301 (2d Cir. 1982) (upholding arbitral award
granting provisional measures, notwithstanding prior judicial decision
refusing to grant such measures: “we expressly declined to state a
view [in our decision refusing to grant court-ordered provisional
measures] as to such issues as Sperry's likelihood of prevailing on
the merits and the seriousness of the dispute as to the merits of
Sperry's claim. And the question of what powers the arbitrators
might have to interpret the Contract or to rule in any way on the
propriety of any certification Israel might make was not before us.”);
45, 59-60 (1993) (arbitral tribunal may have more extensive
familiarity with parties' legal claims and factual evidence). See also
Caron, Interim Measures of Protection: Theory and Practice in Light
of the Iran-United States Claims Tribunal, 46 Zeitschrift für
ausländisches öffentliches Recht und Völkerrecht 465, 507 (1986)
(where “the court involved is of a state other than the place of
arbitration … then the tribunal quite likely is not subordinated to that
court by municipal law and, therefore, is not constrained from
considering contrary interim measures”).
331 This is express in some institutional rules. For example, Article
23(1) of the ICC Rules permits arbitrators to grant provisional
measures either by order or by award. ICC Rules, Art. 23(1) (“Any
such measure shall take the form of an order, giving reasons, or of
an Award, as the Arbitral Tribunal considers appropriate.”).
The differences between orders and awards are discussed below.

332 If a tribunal lacks the authority under applicable law to order

provisional measures (see supra pp. 1949-1951), it will sometimes
invite the parties, in a non-binding manner, to adhere to specified
admonitions. Such admonitions are not properly regarded as
provisional relief or measures, but instead the tribunal's exercise of
its supervisory authority to enhance the prospects for cooperation in
conducting the arbitral proceedings. Compare the approach in ICSID
arbitrations, where a tribunal is authorized to make
“recommendations,” which are nonetheless considered binding and
mandatory. See supra pp. 1948-1949.
333 The Iran-US Claims Tribunal has generally issued provisional
relief in the form of an award, rather than an order. D. Caron, L.
514
Caplan & M. Pellonpää, The UNCITRAL Arbitration Rules: A

Commentary 541 (2006).
334 See ICC Rules, Art. 27 (“Before signing any Award, the Arbitral
Tribunal shall submit it in draft form to the Court.”). See also Lew,
Arbitration Cases, 11(1) ICC Ct. Bull. 23, 28 (2000); Schwartz, The
A Working Party of the ICC Commission on International Arbitration,

established in the late 1980's, concluded that provisional measures
could properly take the form of interim awards, approved under
Article 21. ICC, Final Report on Interim and Partial Awards, 1(2) ICC
Ct. Bull. 26 (1990). The Working Party also concluded, however,
that the better practice was only to issue procedural directions, and
not an interim award, in order to avoid the delays accompanying ICC
review.
335 See infra pp. 2334-2346. See also Lew, Commentary on

ICC Ct. Bull. 23, 28 (2000); Schwartz, The Practices and
Measures in International Arbitration 45, 63 (1993).
336 UNCITRAL Model Law, 2006 Revisions, Art. 17H(1); Swiss Law
on Private International Law, Art. 183(2); English Arbitration Act,
1996, §42(1). See also infra pp. 2024-2026.
337 Judgment of 22 May 1957, 1958 ZZP 427 (German
Bundesgerichtshof); Resort Condominiums Int'l Inc. v. Bolwell, XX
Y.B. Comm. Arb. 628 (Queensland S.Ct. 1993). See also infra pp.
2020-2023.
338 Interim Award in ICC Case No. 8879, 11(1) ICC Ct. Bull. 84, 88
(2000).
Arbitration Rules: A Commentary 541 (2006).
340 See, e.g., UNCITRAL Model Law, Art. 17 (“The arbitral tribunal
may require any party to provide appropriate security in connection
with such [provisional] measures.”); UNCITRAL Model Law, 2006
Revisions, Art. 17E (“(1) The arbitral tribunal may require the party
requesting an interim measure to provide appropriate security in
connection with the measure. (2) The arbitral tribunal shall require
the party applying for a preliminary order to provide security in
connection with the order unless the arbitral tribunal considers it
inappropriate or unnecessary to do so.”); Swiss Law on Private
International Law, Art. 183(3) (tribunal “may make granting the
provisional or conservatory measure subject to appropriate
securities”); Japanese Arbitration Law, Art. 24(2).
341 See, e.g., UNCITRAL Rules, Art. 26(2) (“The arbitral tribunal
shall be entitled to require security for the costs of such [provisional]
measures”); ICC Rules, Art. 23(1) (“The Arbitral Tribunal may make
the granting of any such [provisional] measure subject to appropriate
security being furnished by the requesting party.”); LCIA Rules, Art.
515
93
25(2).
342 See, e.g., Warth Line, Ltd v. Merinda Marine Co., 778 F.Supp.
158 (S.D.N.Y. 1991) (confirming New York arbitral tribunal's award of
damages from arrest of vessel by Belgian courts); In re Noble Nav.
Corp., No. 83-3983 (S.D.N.Y. 4 June 1984).
343 Vischer, in D. Girsberger et al. (eds.), Zürcher Kommentar zum
IPRG Art. 183, ¶18 (2d ed. 2004).
344 UNCITRAL Model Law, Art. 17; H. Holtzmann & J. Neuhaus, A
Guide to the UNCITRAL Model Law on International Commercial
Arbitration: Legislative History and Commentary 530-533 (1989).
345 Swiss Law on Private International Law, Art. 183(1). See also
Swedish Arbitration Act, §25(4) (“at the request of a party”);
Japanese Arbitration Law, Art. 24(1) (“at the request of a party”).
346 See, e.g., UNCITRAL Rules, Art. 26(1); ICC Rules, Art. 23(1);
LCIA Rules, Art. 25(1). Even where national law or institutional rules
do not so provide, it is almost inconceivable that an arbitral tribunal
should (or would) take the extraordinary step of granting provisional
measures sua sponte; if nothing else, such action would deny the
respondent (as well as the claimant) an opportunity to be heard on
the issue, while the granted relief might be either unwanted or
affirmatively damaging.
347 The practical utility of ex parte provisional measures ordered by
an arbitral tribunal is open to debate. If a party were likely to
dissipate or conceal assets, or take other harmful actions, if
confronted by a request for provisional relief, it is unclear why similar
actions would not be taken after issuance of an ex parte order
(which requires judicial enforcement to have coercive legal effect).
348 See supra pp. 1765-1776 & infra pp. 2573-2594, 2736-2764.
349 ICSID Arbitration Rules, Rule 39(4) (“The Tribunal shall only
recommend provisional measures, or modify or revoke its
recommendations, after giving each party an opportunity of
presenting its observations.”).
350 See, e.g., Stalev, Interim Measures of Protection in the
Context of Arbitration, in A. van den Berg (ed.), International
Arbitration in A Changing World 111 (ICCA Congress Series No.6
1994); D. Caron, L. Caplan & M. Pellonpää, The UNCITRAL
Arbitration Rules: A Commentary 543 (2006) (“Before granting
interim measures, the arbitral tribunal should provide the party
against whom such measures are sought with an opportunity to
comment”).
International Arbitration in Switzerland, 18 ASA Bull. 31, 38 (2000)
(“In cases of special urgency, in terms of time and nature of the
harm threatening to a party's right, the arbitral tribunal may order
interim measures in ex parte proceedings”).
352 For some of the contentious drafting history, seeReport of the
Work ing Group on Arbitration and Conciliation on the Work of its
Forty-Second Session, UNCITRAL, Thirty-Eighth Session, UN Doc.
A/CN.9/573 (2005), available at www.uncitral.org (proposals for
516
revisions to Article 17 of Model Law).

353 UNCITRAL Model Law, 2006 Revisions, Art. 17B(1).
354 UNCITRAL Model Law, 2006 Revisions, Art. 17B(2).
355 van Houtte, Ten Reasons Against A Proposal for Ex Parte
Interim Measures of Protection in Arbitration, 20 Arb. Int'l 85 (2004).
356 Derains, The View Against Arbitral Ex Parte Interim Relief, 58
Dispute Res. J. 61 (2003); Castello, Arbitral Ex Parte Interim Relief:
The View In Favor, 58 Dispute Res. J. 60 (2003); van Houtte, Ten
Reasons Against A Proposal for Ex Parte Interim Measures of
Protection in Arbitration, 20 Arb. Int'l 85 (2004).
357 See supra pp. 1966-1968.
358 UNCITRAL Model Law, 2006 Revisions, Art. 17C(1), (5). See
also Report of the UNCITRAL on the Work of its Thirty-Ninth
Session, UN Doc. A/61/17, ¶114 (2006), available at
www.uncitral.org (“non-enforceability of preliminary orders was
central to the compromise reached”).
359 See UNCITRAL Model Law, 2006 Revisions, Art. 17F(2) (“The
party applying for a preliminary order shall disclose to the arbitral
tribunal all circumstances that are likely to be relevant to the arbitral
tribunal's determination whether to grant or maintain the order, and
such obligation shall continue until the party against whom the order
has been requested has had an opportunity to present its case.
Thereafter, paragraph (1) of this article shall apply.”).
In many developed legal systems, parties that seek provisional relief

on an ex parte basis are subject to heightened obligations of candor.
See, e.g., Judgment of 23 October 2001, 2002 ZR 101 86, 88
(Zurich Commercial Court) (“the failure to disclose facts, of which the
applicant knows or should know, could be disadvantageous to his
case, constitutes an abuse of the ex parte proceedings”); Ritter v.
Hoag, 2003 ABQB 978, ¶3 (Alta. Q.B.) (“high standard of candour
fundamental to an ex parte application”); Siporex Trade SA v.
Comdel Commodities Ltd [1986] 2 Lloyd's Rep. 428, 437 (Q.B.) (“A
party applying ex parte for injunctive relief … must identify the
crucial points for and against the application…”); Four Star Fin.
Services LLC v. Commonwealth Mgt Assoc., 166 F.Supp.2d 805,
810 (S.D.N.Y. 2001) (“Sanctions must be imposed here to make it
clear to all who practice in the federal courts that when they come
before a judge seeking extraordinary relief ex parte, they will be held
to the highest standards of candour.”).
360 Caron, Interim Measures of Protection: Theory and Practice in

Light of the Iran-United States Claims Tribunal, 46 Zeitschrift für
ausländisches öffentliches Recht und Völkerrecht 465, 482-83
(1986).

517
95
518
96

Arbitration - C. Judicial Enforcement of
Provisional Measures Ordered by
Arbitrators
Chapter 16
Author
Gary B. Born
Gary B. Born
Source
C. Judicial Enforcement of Provisional Measures Ordered by
Arbitrators Provisional Measures
in International
Arbitration - C. Judicial
Despite a strong historical tendency towards voluntary compliance Enforcement of
with arbitral awards and orders, tribunal-ordered provisional Provisional Measures
measures are not always complied with. (361) As discussed above, Ordered by Arbitrators
arbitrators lack the authority, under virtually all national legal in Gary B. Born ,
International
regimes, coercively to enforce their orders. (362) Accordingly,
Commercial Arbitration,
judicial enforcement of a tribunal's provisional measures may be
(Kluwer Law
essential to effectuating the tribunal's directions (and protecting one
International 2009) pp.
party's rights). Unfortunately, the law relating to the enforceability of
2019 - 2028
tribunal-ordered provisional measures is unsettled.
Many national arbitration statutes do not expressly address the

judicial enforceability of tribunal-ordered provisional measures issue,
leaving enforcement of tribunal-ordered provisional measures to
general statutory provisions regarding arbitral awards. That was the
case with the original text of the 1985 UNCITRAL Model Law, (363)
as well as a number of other arbitration statutes. (364) Under such
legislation, the enforcement of tribunal-ordered provisional relief has
given rise to significant uncertainties. In part because of these
issues, some jurisdictions have enacted specialized legislation
providing for judicial enforcement of tribunal-ordered provisional
measures, (365) including many Model Law jurisdictions. (366)
Similarly, the page "2019" Model Law was usefully revised in
2006 along similar lines to permit specialized enforcement of
“orders” of provisional relief. (367)
1. Are Provisional Measures “Final” Awards?
519
A significant question with regard to the enforceability of tribunal-

ordered “provisional” or “interim” measures in national courts has
been whether such decisions can qualify for enforcement as an
arbitral “award” under the general provisions of national arbitration
statutes. This question arose under (older) arbitration legislation
which provided only a general enforcement mechanism for final
arbitral awards and it has provoked divergent answers.
Historically, some (older) authorities held that only “final” arbitral

“awards” could be enforced and that “provisional” measures were by
definition not “final.” (368) In the words of one national court decision,
“whilst it is true that a valid interlocutory order is in one

sense ‘binding' on the parties to the arbitration
agreement … an interlocutory order which may be
rescinded, suspended, varied or reopened by the
tribunal which pronounced it is not ‘final' and binding
on the parties.” (369)
page "2020"
There was (and remains) a substantial body of commentary also

concluding that provisional measures are not recognizable or
enforceable as “final” arbitral “awards” under either the New York
Convention or national arbitration legislation. (370)
In contrast, a number of more recent authorities hold that the grant

of provisional measures finally disposes of the request for such
measures and that judicial enforcement of such measures is
important to the arbitral process. In the United States, the FAA
provides no express guidance as to the enforceability of arbitral
decisions granting provisional measures, (371) but the foregoing
reasoning has been adopted by a number of U.S. courts to hold that
such decisions are to be treated as “final” awards and subject to
recognition and enforcement. (372) According to one U.S. decision
adopting this view, an order of provisional measures should be
confirmed because:
page "2021"
“such an award is not ‘interim' in the sense of being an

‘intermediate' step toward a further end. Rather, it is
an end in itself, for its very purpose is to clarify the
parties' rights in the ‘interim' period pending a final
decision on the merits … [I]f an arbitral award of
equitable relief based upon a finding of irreparable
harm is to have any meaning at all, the parties must
be capable of enforcing or vacating it at the time it is
made.” (373)
A substantial body of U.S. commentary endorses this approach,

(374) as do some non-U.S. authorities. (375)
Despite this, a number of authorities also hold that the recognition

520
98
provisions of the New York Convention (and national arbitration

legislation) apply only to awards that finally determine matters
submitted to arbitration, and therefore not to either orders (or
“awards”) of provisional relief. (376) As one court put it, “the New
York page "2022" Convention … applies to final and binding
awards. Provisional or interim measures are not final.” (377)
The better view is that provisional measures should be and are

enforceable as arbitral awards under generally-applicable provisions
for the recognition and enforcement of awards. Provisional measures
are “final” in the sense that they dispose of a request for relief
pending the conclusion of the arbitration. Orders granting provisional
relief are meant to be complied with, and to be enforceable, in the
parties' conduct outside the arbitral process; they are in this respect
different from interlocutory arbitral decisions that merely decide
certain subsidiary legal issues (e.g., choice of law, liability) or
establish procedural timetables. (378) It is also highly important to
the efficacy of the arbitral process for national courts to be able to
enforce provisional measures. If this possibility does not exist, then
parties will be able and significantly more willing to refuse to comply
with provisional relief, resulting in precisely the serious harm that
provisional measures were meant to foreclose.
In contrast, there is no sound policy reason for withholding judicial

enforcement mechanisms for tribunal-ordered provisional measures.
(379) The most serious concern would appear to be that national
courts would be required repeatedly to enforce, and then possibly re-
adjust their enforcement measures, if an arbitral tribunal altered the
provisional relief it ordered. In reality, these sorts of alterations
seldom occur and, if judicial enforcement were available, parties
would almost invariably comply with tribunal-ordered provisional relief
without the need for judicial enforcement. In any event, a measure of
judicial involvement in enforcement proceedings is generally a
modest cost to pay to ensure the efficacy of the arbitral process
(which among other things materially reduces the work-load of
national courts). (380)
page "2023"
2. Specialized National Arbitration Legislation Permitting

Enforcement of Provisional Measures
Given this uncertainty concerning the enforceability of provisional

measures and the practical need for effective enforcement
mechanisms, a number of states, as well as the drafters of the 2006
revisions to the UNCITRAL Model Law, have adopted legislative
provisions that authorize judicial enforcement of tribunal-ordered
provisional measures, outside the context of final awards. This
legislation typically provides for enforcement of tribunal-ordered
provisional measures by national courts in the arbitral seat (as
opposed to in other states). These statutory provisions materially
enhance the enforceability of provisional measures ordered by
521
arbitral tribunals, but do not deal with enforcement outside the

arbitral seat.
One of the first legislative provisions of this character was Article

183(2) of the Swiss Law on Private International Law, which provides
that, if a party does not voluntarily comply with tribunal-ordered
provisional measures, “the arbitral tribunal may request the
assistance of the competent court.” (381) This provision limits the
arbitrators' rights to take the initiative of applying to a local court for
enforcement of provisional measures, and does not lead to litigation
between the arbitral tribunal and one of the parties. Nevertheless, it
appears inappropriate to limit this right to the arbitrators and the
parties should equally be entitled to apply to the courts. The latter
solution could avoid obliging the arbitral tribunal to take steps (i.e.,
initiating litigation against a party) which might create an
appearance of partiality. (382)
Other arbitration statutes, including most versions of the UNCITRAL

Model Law, (383) provide for the parties to seek judicial enforcement
of tribunal-ordered provisional measures, not treating such measures
as arbitral “awards,” but instead providing a suigeneris enforcement
mechanism. Section 1041(2) of the German implementation of the
Model Law provides that “the court may, at the request of a party,
permit enforcement of a measure … unless application for a
corresponding page "2024" interim measure has already been
made to a court.” (384) The German legislation also provides for
judicial review and revision of interim measures ordered by a tribunal,
as well as judicially-ordered damages for unjustified grants of
provisional relief (against the party that requested such relief). (385)
The 1996 English Arbitration Act is similar, (386) as is legislation in
other common law (387) and civil law (388) jurisdictions.
There may be circumstances in which the arbitral tribunal will issue

provisional relief of a character that is not available under the law of
the judicial enforcement forum. In these circumstances, national
laws either expressly or impliedly provide for the application of the
enforcement forum's law (with the result that measures not permitted
or available under local law may not be enforceable). (389) Where
local law does not provide the same type of relief, courts may order
an analogous or similar form of enforcement. (390)
The 2006 revisions to the Model Law adopted a specialized

enforcement regime for provisional measures issued by arbitral
tribunals. Article 17H(1) provides that “[a]n interim measure issued
by an arbitral tribunal shall be recognized as binding page
"2025" and, unless otherwise provided by the arbitral tribunal,
enforced upon application to the competent court.” (391) The
provision goes on to provide that enforcement may be sought
“irrespective of the country in which it was issued,” permitting
provisional measures to be enforced outside the arbitral seat. (392)
The enforceability of provisional measures under Article 17H is
522
subject to exceptions, (393) and in particular those applicable to

awards. (394) In contrast to some other aspects of the 2006
revisions, (395) Article 17H is a desirable addition to the Model Law
that would enhance the efficacy of the arbitral process.
3. Forum Selection Issues in Enforcing Provisional Measures
As with the enforcement of final arbitral awards, (396) the judicial

enforcement of tribunal-ordered provisional measures raises forum
selection issues. Parties may seek to enforce provisional measures
either in the courts of the arbitral seat, the courts of the place where
disputed property is located, or the courts where disputed actions
occur. (397) Where disputed property is located outside the arbitral
seat, the courts in the arbitral seat may nonetheless be prepared to
recognize and seek to enforce provisional measures requiring
conduct abroad.
page "2026"
4. Scope of Judicial Review in Action to Enforce Tribunal-

Ordered Provisional Measures
Assuming that the judicial enforcement of tribunal-ordered

provisional measures is in principle possible, questions then arise
as to whether the arbitral tribunal's relief should be enforced as a
substantive matter. The same defenses to recognition and
enforcement are generally available with regard to provisional relief
as for final awards. (398) That includes, in the arbitral seat, any
grounds provided by local law for annulment of an arbitral award and
in foreign courts, any grounds specified in Article V of the New York
Convention for non-recognition of an award. (399)
A particularly common ground for challenging arbitral decisions

granting interim relief is that the tribunal exceeded its authority. As
noted above, most decisions that have permitted judicial
enforcement of tribunal-ordered provisional measures have
dismissed challenges based on an excess of authority, and have
permitted arbitrators broad discretion to fashion appropriate
remedies. (400) Other judicial decisions have considered what
amount to substantive objections to the merits of the arbitrators'
order of provisional relief, only entertaining such objections in a
minority of (older) cases. (401)
The 2006 revisions to Article 17 of the Model Law provide additional

grounds for non-enforcement of provisional measures (beyond those
in Article 36). In particular, Article 17I provides for non-enforcement
of the order if the party seeking enforcement failed to comply with
any order for security on which provisional measures were
conditioned (402) or if the provisional measures were terminated or
suspended by the arbitral tribunal. (403) Where provisional measures
523
101
are “incompatible page "2027" with the powers conferred upon

the [enforcement] court,” the court is authorized to “reformulate the
interim measures 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.” (404)
page "2028"
361 Compare J. Lew, L. Mistelis & S. Kröll, Comparative

International Commercial Arbitration ¶23-83 (2003) (“provisional
measures ordered by the tribunal are invariably complied with
voluntarily”); Bond, TheNature of Conservatory and Provisional
Measures, in ICC, Conservatory and Provisional Measures in
International Arbitration 8, 16 (1993).
362 See supra pp. 1966-1968.
363 Indeed, the drafters of the Model Law omitted a provision,
included in early drafts, that would have provided expressly for the
recognition and enforcement of tribunal-ordered provisional
measures. SeeReport of the Work ing Group on International
Contract Practices on the Work of its Sixth Session, UN Doc.
A/CN.9/245, Art. XIV, ¶72, XV Y.B. UNCITRAL 155 (1984).
364 The FAA in the United States and the New Code of Civil
Procedure in France are prime examples.
365 See German ZPO, §1041(2); English Arbitration Act, 1996,
§42(1); Hong Kong Arbitration (Amendment) Ordinance No. 2 of
2000; Ontario International Commercial Arbitration Act, §9; infra pp.
2024-2026.
UNCITRAL Model Law, 740 PLI/Lit. 1181, *92-95 (2005) (all states
that have adopted Model Law have included language permitting
enforcement of provisional measures). See, e.g., Singapore
International Arbitration Act, §12(7); English Arbitration Act, 1996,
§44(2); Hong Kong Arbitration Ordinance Arts. 2BG, 2GC; Indian
Arbitration and Conciliation Act, Art. 9; New Zealand Arbitration Act,
First Schedule, Art. 17 (L) & (M); Cal. C.C.P., §1297.92.
367 See UNCITRAL Model Law, 2006 Revisions, Art. 17H; infra pp.
2025-2026.
368 See, e.g., Michaels v. Mariforum Shipping SA, 624 F.2d 411
(2d Cir. 1980) (confused decision holding inter alia that arbitrator's
decision could not be enforced because it was
“interlocutory,”“preliminary” and did not “purport to resolve finally the
issues submitted to [the arbitrators]”); Mobil Oil Indonesia Inc. v.
Asamera Oil (Indonesia) Ltd, 43 N.Y.2d 276 (N.Y. 1977) (dicta that:
“in order to be ‘final,’ an arbitration award must be intended by the
arbitrators to be their complete determination of all claims submitted
by them”); Judgment of 22 May 1957, 1958 ZZP 427 (German
Bundesgerichtshof); Resort Condominiums Int'l Inc. v. Bolwell, XX
524
Y.B. Comm. Arb. 628 (Queensland S.Ct. 1993) (1995); Hart

Surgical, Inc. v. Ultracision, Inc., 244 F.3d 231, 233 (1st Cir. 2001)
(award in question must be ‘final’ in order to be eligible for judicial
confirmation); Publicis Comm. v. True North Comm., Inc., 206 F.3d
725, 728-29 (7th Cir. 2000) (same). See also J.-F. Poudret & S.
Besson, Comparative Law of International Arbitration ¶633 (2d ed.
2007) (arbitral decisions ordering provisional measures are not final
because they do not finally determine all or part of the dispute); R.
Schütze, D. Tscherning & W. Wais, Handbuch des
Schiedsverfahrens, ¶513 (2d ed. 1990); J.-P. Lachmann, Handbuch
für die Schiedsgerichtspraxis ¶2060 (3d ed. 2008). Gaitis, The
Federal Arbitration Act: Risk s and Incongruities Relating to the
Issuance of Interim and Partial Awards in Domestic and
International Arbitrations, 16 Am. Rev. Int'l Arb. 1, 31-33 (2005);
45 (1993) (emphasis on finality may hinder efforts to enforce an
arbitral award of interim relief); Smit & Shaw, The Center for Public
Resources Rules for Non-Administered Arbitration of International
Disputes : A Critical and Comparative Commentary: Part Two, 8
Am. Rev. Int'l Arb. 275 (1997) (same).
369 Resort Condominiums Int'l Inc. v. Bolwell, XX Y.B. Comm. Arb.
628 (Queensland S.Ct. 1993) (1995).
370 Seeinfra pp. 2356-2359, 2815-2826.
371 Gaitis, The Federal Arbitration Act: Risk s and Incongruities
Relating to the Issuance of Interim and Partial Awards in Domestic
and International Arbitrations, 16 Am. Rev. Int'l Arb. 1, 39-40 (2005);
U.S. FAA, 9 U.S.C. §16(1) (referring to confirmation of an “award or
partial award” but not an “interim” award).
372 See, e.g., Arrowhead Global Solutions, Inc. v. Datapath, Inc.,
166 Fed.Appx. 39, 41 (4th Cir. 2006) (interim award in form of
preliminary injunction confirmed even though did not dispose of all
claims); Publicis Comm. v. True North Comm., Inc., 206 F.3d 725
(7th Cir. 2000) (recognizing and enforcing order of interim relief);
Yasuda Fire & Marine Ins. Co. of Europe v. Continental Cas. Co., 37
F.3d 345 (7th Cir. 1994) (confirming interim order that reinsurer post
letter of credit as security); Pacific Reins. Mgt Corp. v. Ohio Reins.
Corp., 935 F.2d 1019 (9th Cir. 1991) (confirming “Interim Final Order”
requiring payments into escrow account); Metallgesellschaft AG v.
M/V Capitan Constante, 790 F.2d 280 (2d Cir. 1986); Island Creek
Coal Sales Co. v. City of Gainesville, 729 F.2d 1046 (6th Cir. 1984)
(confirming “Interim Order” that required party to continue to perform
disputed contract (by accepting shipments) during arbitral
proceeding); Sperry Int'l Trade, Inc. v. Gov't of Israel, 689 F.2d 301
(2d Cir. 1982); Banco de Seguros del Estado v. Mutual Marine
Offices, Inc., 230 F.Supp.2d 362 (S.D.N.Y. 2002), aff'd, 344 F.3d
255 (2d Cir. 2003) (arbitrators' disposition of “a claim ‘separate’ and
‘independent’ from the other claims submitted in the arbitration” is
an “arbitration award” and entitled to enforcement under Inter-
American Convention and FAA, where award was for posting of
security); Polydefk is Corp. v. Trancontinental Fertiliser Co., 1996
WL 683629 (E.D. Pa. 1996) (recognizing interim relief order,
525
103
requiring payment of funds into escrow account, by London arbitral

tribunal); Konk ar Maritime Enter., SA v. Compagnie Belge
d'Affretement, 668 F.Supp. 267 (S.D.N.Y. 1987) (upholding order to
escrow funds); Southern Seas Nav. Ltd v. Petroleos Mexicanos of
Mexico City, 606 F.Supp. 692 (S.D.N.Y. 1985); Zephyros Maritime
Agencies, Inc. v. Mexicana de Cobre, SA, 662 F.Supp. 892
(S.D.N.Y. 1987); Compania Chilena De Navegacion Interoceanica
SA v. Norton, Lilly & Co., 652 F.Supp. 1512, 1516 (S.D.N.Y. 1987)
(upholding security order); Fiat SpA v. Ministry of Fin.and Planning,
1989 U.S. Dist. LEXIS 11995 (S.D.N.Y. 1989); Puerto Rico Maritime
Shipping Auth. v. Star Lines Ltd, 454 F.Supp. 368, 375 (S.D.N.Y.
1978) (confirming award for an accounting). Compare Kerr-McGee
Refining Corp. v. M/T Triumph, 924 F.2d 467 (2d Cir. 1991) (award
on determining some of damages claims not “final”). See infra pp.
2356-2359.
373 Southern Seas Nav. Ltd v. Petroleos Mexicanos of Mexico City,
606 F.Supp. 692 (S.D.N.Y. 1985). See alsoMetallgesellschaft AG v.
M/V Capitan Constante, 790 F.2d 280, 282-83 (2d Cir. 1986)
(“Because the award … finally and conclusively disposed of a
separate and independent claim and was subject to neither
abatement nor set-off, the district court did not err in confirming it”);
Banco de Seguros del Estado v. Mutual Marine Offices, Inc., 230
F.Supp.2d 362, 367 (S.D.N.Y. 2002), aff'd, 344 F.3d 255 (2d Cir.
2003).
374 Publicis Comm. v. True North Comm., Inc., 206 F.3d 725 (7th
Cir. 2000) (“r)equiring [all remaining] issues to be arbitrated to finality
… would defeat the purpose of the tribunal's order to enforce a
decision the tribunal called urgent”); von Mehren, The Enforcement
of Arbitral Awards under Conventions and United States Law, 9 Yale
J. World Pub. Order 343, 362-63 (1983); Gaitis, The Federal
Arbitration Act: Risk s and Incongruities Relating to the Issuance of
Interim and Partial Awards in Domestic and International
Arbitrations, 16 Am. Rev. Int'l Arb. 1 (2005).
375 See Judgment of 1 July 1999, Brasoil v. GMRA, XXIVa Y.B.
Comm. Arb. 296 (Paris Cour d'appel) (1999); P. Schlosser, Das
Recht der internationalen privaten Schiedsgerichtsbark eit ¶776 (2d
ed. 1989); K.-H Schwab & G. Walter, Schiedsgerichtsbark eit Ch.
30, ¶12 (7th ed. 2005). As discussed below, the 2006 revisions to
the Model Law proceed on the same basis, that orders or awards of
provisional relief should in principle be enforceable. See infra pp.
2025-2026.
International Commercial Arbitration ¶23.94 (2003); K.-P. Berger,
International Economic Arbitration 343 (1993); Pryles, Interlocutory
Orders and Convention Awards: The Case of Resort Condominiums
v. Bolwell, 10 Arb. Int'l 385, 394 (1994) (“it must be doubted whether
the drafters of the New York Convention intended to cast their net
thus far”); Note of the Secretariat on the Possible Future Work in
the Area of International Commercial Arbitration, UN Doc.
A/CN.9/460, ¶121, XXX UNCITRAL Y.B. 395, 410 (1999) (“The
prevailing view, confirmed … by case law in some States, appears
to be that the Convention does not apply to interim awards.”);
526
104
Michaels v. Mariforum Shipping SA, 624 F.2d 411 (2d Cir. 1980);
Pilk ington Brothers plc v. AFG Indus. Inc., 581 F.Supp. 1039 (D.
Del. 1984) (provisional injunctive relief issued by English court in aid
of international arbitration sited in London is not an “award” entitled
to recognition under New York Convention or FAA).
377 Resort Condominiums Int'l Inc. v. Bolwell, XX Y.B. Comm. Arb.
628 (Queensland S.Ct. 1993) (1995).
378 See infra pp. 2354-2356.
379 Textually, it is difficult to see why a formal, reasoned decision
granting provisional relief cannot be considered an “award” under the
Convention or national arbitration legislation. Certainly, given the
central role of party autonomy, reliance on formalisms should be
minimal in such analysis and, as discussed in text, the Convention's
policies go further by treating grants of provisional measures as
awards. On purely formal grounds, it is difficult to see why a
decision granting provisional measures cannot be considered an
award (as suggested by the provisions of the ICC Rules providing for
exactly this result). See supra pp. 1108-1109.
380 This is confirmed by the legislative decisions of states that
have adopted the Model Law (adding provisions for judicial
enforcement of tribunal-ordered provisional measures), supra pp.
2024-2026, and the 2006 revisions to the Model Law, which provided
for the enforcement of arbitral decisions granting provisional relief.
UNCITRAL Model Law, 2006 Revisions, Art. 17H. See infra pp.
2025-2026.
381 Swiss Law on Private International Law, Art. 183(2). See O.
Merkt, Les mesures provisoires en droit international privé 196
(1993); S. Besson, Arbitrage international et mesures provisoires
305 (1998); A. Bucher & P.-Y. Tschanz, International Arbitration in
Switzerland ¶173 (1988). It is unclear whether parties to the
arbitration, in addition to the tribunal, may seek to enforce a
provisional measure. Ibid.
382 See J.-F. Poudret & S. Besson, Comparative Law of
International Arbitration ¶637 (2d ed. 2007). Some practitioners
suggest that a party may also apply for judicial enforcement of
tribunal-ordered provisional measures under Article 183 of the Swiss
Law on Private International Law. See Wirth, Interim or Preventive
ASA Bull. 31, 39 (2000); Berti, in S. Berti et al. (eds.), International
Arbitration in Switzerland Art. 183, ¶16 (2000).
UNCITRAL Model Law, 740 PLI/Lit. 1181, *92-95 (2005) (all states
that have adopted Model Law have included language permitting
enforcement of provisional measures). See German ZPO, §1041(2);
English Arbitration Act, 1996, §42(1); Hong Kong Arbitration
(Amendment) Ordinance No. 2 of 2000; New Zealand Arbitration Act,
First Schedule, Art. 17 (L) & (M).
384 German ZPO, §1041(2). The provision continues “[The
enforcing court] may recast such an order if necessary for the
purpose of enforcing the measure.” In addition, §1063(3) provides for
ex parte enforcement proceedings in German courts of provisional
527
105
measures. German ZPO, §1063(3).

385 German ZPO, §1041(3) & (4). See Berger, The New German
Arbitration Law in International Perspective, 26 Forum Int'l 1, 10-11
(2000); Schaefer, New Solutions for Interim Measures of Protection
in International Commercial Arbitration: English, German and Hong
Kong Law Compared, 2.2 E.J.C.L. (1998), available at www.ejcl.org.
386 English Arbitration Act, 1996, §42(1) (“Unless otherwise agreed
by the parties, the court may make an order requiring a party to
comply with a peremptory order made by the tribunal.”); R. Merkin,
Arbitration Law 16.32 (2004 & Update 2007).
387 Hong Kong Arbitration (Amendment) Ordinance No. 2 of 2000
(“An award, order, or direction made or given in or in relation to
arbitration proceedings by an arbitral tribunal is enforceable in the
same way as a judgment, order or direction of the Court that has the
same effect, but only with the leave of the Court or a judge of the
Court.”); New Zealand Arbitration Act, First Schedule, Art. 17 (L)(I)
(“An interim measure granted by an arbitral tribunal must be
recognised 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 granted.”); Ontario
International Commercial Arbitration Act, §9.
388 Netherlands Code of Civil Procedure, Art. 1051 (“1. The parties
may agree to empower the arbitral tribunal or its chairman to render
an award in summary proceedings, within the limits imposed by
article 254(1)… 3. A decision rendered in summary arbitral
proceedings shall be regarded as an arbitral award to which the
provisions of Sections Three to Five [The Arbitral Award/Enforcement
of the Arbitral Award/Setting Aside and Revocation of the Arbitral
Award] inclusive of this Title shall be applicable…”).
389 Swiss Law on Private International Law, Art. 183(2); Berti, in S.
Berti et al. (eds.), International Arbitration in Switzerland Art. 183,
¶18 (2000); A. Bucher & P.-Y. Tschanz, International Arbitration in
Switzerland ¶172 (1988); Order of 19 December 1994, 1996 ZZPInt
91 (Oberlandesgericht Karlsruhe), Note, Zuckerman & Grunert.
390 Order of 19 December 1994, 1996 ZZPInt 91, 92 et seq.
(Oberlandesgericht Karlsruhe), Note, Zuckerman & Grunert. See
also Schaefer, New Solutions for Interim Measures of Protection in
International Commercial Arbitration: English, German and Hong
Kong Law Compared, 2.2 E.J.C.L. (1998), available at
www.ejcl.org./22/abs22-2.html.
391 UNCITRAL Model Law, 2006 Revisions, Art. 17H(1).
392 UNCITRAL Model Law, 2006 Revisions, Art. 17H(1).
393 UNCITRAL Model Law, 2006 Revisions, Art. 17I (“(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
528
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.”).
394 UNCITRAL Model Law, Art. 36.
395 As discussed above, the provisions regarding ex parte
provisional relief in Articles 17B and 17C have little to recommend
them; Article 17A and revised Article 17(2) are also of arguable
value. See supra pp. 2016-2019.
396 See infra pp. 2397-2403.
397 This is made explicit in the 2006 revisions to the Model Law.
UNCITRAL Model Law, 2006 Revisions, Art. 17H(1); supra pp. 2025-
2026.
398 See UNCITRAL Model Law, 2006 Revisions, Arts. 17H(1), 17I;
infra pp. 2730 et seq. That is most obvious in jurisdictions (like the
United States) where grants of interim relief are treated as “awards”
that are final and capable of enforcement. See supra pp. 2020-2023.
399 See infra pp. 2551 et seq., 2730 et seq.
400 Sperry Int'l Trade, Inc. v. Gov't of Israel, 689 F.2d 301 (2d Cir.
1982); Certain Underwriters at Lloyd's London v. Argonaut Ins. Co.,
264 F.Supp.2d 926 (N.D. Cal. 2003). But seeCharles Constr. Co. v.
Derderian, 586 N.E.2d 992 (Mass. 1992). See supra pp. 1951-1957.
For a discussion of excess of authority generally, see infra pp.
2606-2611, 2798-2803.
401 Swift Indus., Inc. v. Botany Indus., Inc., 466 F.2d 1125, 1134
(3d Cir. 1972) (“Can a $6 million cash bond award be deemed
rational in view of a maximum $1.5 million liability under the [parties'
contract]? We think not.”); French v. Merrill Lynch, Pierce, Fenner &
Smith, Inc., 784 F.2d 902, 906 (9th Cir. 1986) (“An arbitrator's
decision must be upheld unless it is ‘completely irrational’”); Indus.
Mut. Ass'n, Inc. v. Amalgamated Work ers, Local Union No. 383,
725 F.2d 406, 412 (6th Cir. 1984) (“Since there is no rational basis
for cancelling the debts, this portion of the award cannot be
enforced”); United Inter-Mountain Tele. Co. v. Comm. Work ers of
Am., 662 F.Supp. 82, 83 (E.D. Tenn. 1987) (award vacated because
arbitrator based his award on “external preferences”).
402 UNCITRAL Model Law, 2006 Revisions, Art. 17I(1)(a)(ii).
403 UNCITRAL Model Law, 2006 Revisions, Art. 17I(1)(a)(iii). Article
17I(1)(a)(iii) goes on to permit (but not require) non-enforcement
where provisional measures have been terminated or suspended by
529
107
a court in “the State in which the arbitration takes place or under the
law of which that interim measure was granted,” but only where the
court was “so empowered.” UNCITRAL Model Law, 2006 Revisions,
Art. 17I(1)(a)(iii). This text roughly parallels Article 36(1)(a)(v), which
is reason enough for criticism. In addition, however, it introduces two
additional sources of uncertainty, being the ill-explained reference to
a court that is “so empowered,” and a reference to the state where
“the arbitration takes place.” The latter reference contrasts with that
in Article 36(1)(a)(v), (referring to the place where an arbitral award is
made”), thereby introducing a source of confusion.
404 UNCITRAL Model Law, 2006 Revisions, Art. 17(I)(b)(i).

530
108

Arbitration - D. Provisional Measures
Ordered by National Courts in Aid of
Chapter 16
Author
Gary B. Born
Gary B. Born
Source
D. Provisional Measures Ordered by National Courts in Aid of
International Arbitration (405)
in International
Arbitration - D.
As outlined above, the arbitral tribunal is not necessarily the only Provisional Measures
source of provisional relief in connection with an international Ordered by National
arbitration: in addition, national courts generally possess concurrent Courts in Aid of
authority to grant provisional measures in connection with arbitral International Arbitration
in Gary B. Born ,
proceedings. (406) This section examines the circumstances in
International
which court-ordered provisional measures can be obtained in aid of
Commercial Arbitration,
an international arbitration.
(Kluwer Law
1. Introduction International 2009) pp.
2028 - 2066
As noted above, until the arbitral tribunal is in place, there is no

prospect of obtaining provisional relief from it. (407) Moreover, at
least to date, the ICC Pre-Arbitral Referee Rules and other similar
efforts have largely failed to provide satisfactory non-judicial page
"2028" mechanisms for obtaining provisional measures in
arbitration. (408) And, where attachments and other provisional
measures binding third parties are concerned, arbitrators can
virtually never provide effective relief. (409)
As a consequence, parties to international arbitration agreements

who require urgent provisional relief at the outset of a dispute must
often seek the assistance of national courts. (410) Like other issues
relating to judicial assistance for an international arbitration, three
sources of authority bear on a national court's decision whether to
grant provisional measures in aid of an international arbitration: (a)
the New York Convention and other applicable international
conventions; (b) applicable national arbitration legislation; and (c)
531
109
any applicable institutional rules, together with other relevant

provisions of the parties' arbitration agreement.
As detailed below, these sources of authority generally provide

national courts with concurrent power to order provisional measures
in aid of an international arbitration (absent agreement to the
contrary by the parties). The existence of concurrent jurisdiction,
shared by arbitral tribunals and national courts, is an exception to
the general principles of arbitral exclusivity and judicial non-
interference in the arbitral process. (411) Concurrent jurisdiction in
this field is nonetheless well-recognized in both national and
international authorities and is essential to the efficacy of the arbitral
process.
2. Authority of National Courts to Grant Provisional Relief in

Aid of International Arbitrations under International Arbitration
Conventions
International arbitration conventions address the question of court-

ordered provisional measures in different ways. Some conventions
expressly permit court-ordered provisional measures, while others
appear either to ignore or to forbid them. This lack of uniformity
accounts in part for historic uncertainty in national page "2029"
legal systems and arbitral practice with regard to provisional
measures in aid of international arbitrations. (412)
a. Court-Ordered Provisional Measures under the European

Convention
Under the European Convention, the concurrent jurisdiction of

national courts and arbitral tribunals to issue provisional measures is
all but explicit. As noted above, Article VI(4) of the European
Convention provides that “[a] request for interim measures or
measures of conservation addressed to a judicial authority shall not
be deemed incompatible with the arbitration agreement.” (413) The
obvious contemplation of this provision is that parties may seek
provisional relief both in national courts and in arbitration (pursuant
to their agreement to arbitrate (414) ), without thereby violating their
arbitration agreement. Although there is only limited authority,
national courts have interpreted Article VI(4) in accordance with its
obvious meaning, granting provisional measures in aid of arbitration.
(415)
b. Court-Ordered Provisional Measures under the New York

Convention
In contrast to the European Convention, the New York Convention

does not contain any provision dealing expressly with provisional
relief (whether granted by an arbitral tribunal or a national court).
(416) This silence has contributed to divergent interpretations of the
Convention, as it affects court-ordered provisional measures in
532
110
connection with arbitral proceedings, by different national courts.
As discussed below, a few U.S. courts have interpreted Article II(3)

of the New York Convention as forbidding national courts from
ordering attachments or other provisional measures in connection
with an international arbitration. (417) Other U.S. judicial decisions
have expressly refused to adopt that reading of Article II(3), (418)
page "2030"
as have almost all non-U.S. decisions and academic commentary.

(419)
These divergent conclusions warrant close attention. It is wrong to

interpret the Convention as generally prohibiting court-ordered
provisional measures (as some U.S. courts have done).
Nonetheless, it is equally wrong to interpret the Convention as
permitting all court-ordered provisional measures. There are
circumstances in which applications for court-ordered provisional
measures constitute an effort to evade or frustrate a party's
obligation to arbitrate, contrary to both its arbitration agreement and
Article II(3) of the Convention. At least some of the (better-reasoned)
U.S. decisions adopt this latter interpretation of the Convention,
which gives proper effect to the terms of Article II(3).
i. McCreary and Cooper: Judicial Decisions Holding That

Article II(3) Forbids Court-Ordered Provisional Measures
The decision which is generally cited for the proposition that U.S.
courts regard Article II(3) as forbidding court-ordered provisional relief
in aid of arbitration is McCreary Tire & Rubber Co. v. CEAT, SpA.
(420) That interpretation of Article II(3) has been widely (and
correctly) criticized. (421) In reality, however, a careful reading of the

McCreary decision indicates a more limited, and more cogent,
analysis, which is less readily subject to criticism.
The McCreary case arose from an international distribution

agreement which went awry, triggering disputes which fell within a
provision calling for ICC arbitration in Belgium. The U.S. party
(McCreary) then commenced litigation, on the merits, in federal
district court in Massachusetts; the district court stayed the action
and ordered arbitration. (422) Undeterred, McCreary next
commenced a new action in federal district court in Pennsylvania,
reasserting its underlying breach of contract claims against CEAT
and, in addition, seeking to attach sums owed to page "2031"
CEAT by a Pittsburgh bank. (423) On appeal, the Third Circuit held
that no attachment should be granted and that arbitration should be
compelled. (424)
The McCreary court rested its decision on both Article II(3) of the
Convention (425) and the court's understanding of the parties'
arbitration agreement as applied to McCreary's litigation tactics:
533
“What is plainly there to see is that [McCreary's

federal court action] is a violation of McCreary's
agreement to submit the underlying disputes to
arbitration. … Quite possibly, foreign attachment may
be available for the enforcement of an arbitration
award. This complaint does not seek to enforce an
arbitration award by foreign attachment. It seek s to
bypass the agreed upon method of settling disputes.
Such a bypass is prohibited by the Convention. …
The Convention forbids the courts of a Contracting
State from entertaining a suit which violates an
agreement to arbitrate. … Permitting a continued
resort to foreign attachment in breach of the
agreement is inconsistent with [the] purpose [of the
New York Convention].” (426)
In short, the McCreary court concluded, for understandable reasons,

that McCreary's U.S. judicial action for provisional relief was in fact
designed to frustrate (“bypass”) the parties' arbitration agreement
and the arbitral process that it had agreed to and, therefore, that the
New York Convention precluded the suit and the request for
attachment. (427) This conclusion is not inconsistent with a general
principle of concurrent jurisdiction in both national courts and arbitral
tribunals to grant provisional measures in connection with arbitral
proceedings. (428) Instead, McCreary's conclusion (and reasoning)
(429) is best understood as standing simply for the page "2032"
proposition that national courts have the power and responsibility to
prevent their concurrent jurisdiction to order provisional measures
from being abused to interfere with the parties' arbitration agreement
and the arbitral process.
McCreary was followed, and its holding and principal rationale were
substantially extended (or distorted), in a few subsequent U.S. lower
court decisions. Thus, the New York Court of Appeals held in
Cooper v. Ateliers de la Motobecane, SA, (430) that the New York
Convention foreclosed an attachment action that was apparently part
of an effort to circumvent arbitration. Again, this was an acceptable,
and largely welcome, approach to provisional measures by a
national court. Unlike McCreary, however, the New York Court of
Appeals' opinion in Cooper went further and declared in dicta that
Article II(3) of the Convention forbid any court-ordered provisional
measures in connection with an international arbitration:
“The essence of arbitration is resolving disputes

without the interference of the judicial process and its
strictures. When international trade is involved, this
essence is enhanced by the desire to avoid unfamiliar
foreign law. The [New York] Convention has
considered the problems and created a solution, one
that does not contemplate significant judicial
intervention until after an arbitral award is made. The
purpose and policy of the [New York ] Convention will
be best carried out by restricting prearbitration judicial
534
112
action to determining whether arbitration should be

compelled.” (431)
A few subsequent U.S. lower court decisions seized on this

language and went substantially beyond the McCreary/Cooper
factual circumstances, refusing to permit court-ordered provisional
measures even when they were fairly clearly in aid of a pending
arbitration (rather than in circumvention of it). (432) For example, in
Drexel page "2033" Burnham Lambert Inc. v. Ruebsamen,
(433) a securities brokerage firm sought to attach the assets of two
individuals prior to arbitral proceedings. According to the brokerage
firm, it was entitled to recover a liquidated debit balance of
approximately $230,000 maintained by the two respondents. (434)
The brokerage firm, which agreed with the respondents that the
underlying dispute should be resolved by arbitration, wanted to
attach a separate brokerage account maintained by the respondents
prior to arbitration. The firm's basis for this request was that the two
respondents were not U.S. citizens and had suffered significant
financial losses, which meant that the firm might be unable to
recover from them if their assets were not attached before the
arbitral proceedings commenced. The court rejected this request,
citing Cooper for the proposition that “this court is constrained … to
find that pre-arbitration attachment is not available to Drexel.” (435)
Note that the foregoing U.S. decisions all involve pre-award

provisional measures. It is clear, even under the most extreme
variant of the McCreary/Cooper analysis, that if an arbitration goes
forward and produces a final award, which then requires enforcement
in national courts, the Convention does not interpose any obstacle
to court-ordered attachment or other measures in aid of execution.
(436)
ii. Uranex: Judicial Decisions Holding That Article II(3) Does Not
Forbid Court-Ordered Provisional Measures in Aid of
Arbitration
Other lower U.S. courts have refused to follow the broad rationale
stated in Cooper. Instead, they have concluded that Article II(3) of
the Convention does not forbid court-ordered provisional relief in aid
of arbitration. In Carolina Power & Light Co. v. Uranex, (437) the
district court declared that:
page "2034"
“This court … does not find the reasoning of McCreary

convincing. As mentioned above, nothing in the text of
the New York Convention itself suggests that it
precludes prejudgment attachment. The [Federal
Arbitration Act] … which operates much like the
Convention for domestic agreements involving maritime
or interstate commerce, does not prohibit
maintenance of a prejudgment attachment during a
535
stay pending arbitration. … There is no indication in

either the text or the apparent policies of the
Convention that resort to prejudgment attachment was
to be precluded.” (438)
The decisive weight of other U.S. lower court authority follows the
analysis in Uranex and also rejects Cooper's apparent interpretation
of the Convention. (439) Indeed, some U.S. decisions bluntly (but
correctly) describe the more extreme Cooper interpretation of Article
II(3) as “facially absurd.” (440)
Other U.S. judicial decisions have sought to narrow the

McCreary/Cooper results, without specifically rejecting their
holdings. Some decisions have distinguished between “traditional”
maritime provisional remedies (such as vessel page "2035"
arrests or maritime attachments) and other provisional measures,
refusing to apply the McCreary/Cooper interpretation of Article II(3) to
“traditional” maritime remedies. (441) In similar fashion, other U.S.
courts have limited Cooper and McCreary to prejudgment
attachments: these courts have concluded that, whatever the rule
with respect to prejudgment attachments, other forms of provisional
relief (such as preliminary injunctions) are available in aid of
arbitration. (442) Courts have also held that the McCreary rationale is
limited to cases under the New York Convention (443) page
"2036" (although it presumably also extends to the Inter-American
Convention (444) ).
Similarly, as a consequence of widespread criticism of the apparent

holding in Cooper, (445) §7502 of the New York Civil Practice Law
and Rules was amended, adding a new sub-paragraph (c).
Subparagraph (c) permits New York state courts to grant
attachments and preliminary injunctive relief “in connection with an
arbitrable controversy,” provided that an arbitral award may be
rendered ineffectual without interim relief. (446) This legislative
amendment did not, however, have the effect of altering the
interpretation of the New York Convention adopted by the New York
courts (which in turn has the effect of prescribing a rule of federal law
which supersedes or preempts state law, including new §7502(c)).
(447) This has significantly limited the practical import of §7502(c).
(448)
iii. Non-U.S. Judicial Decisions Holding That Article II(3) Does

Not Forbid Court-Ordered Provisional Measures in Aid of
Arbitration
Judicial decisions from all developed jurisdictions other than the

United States reject the notion that Article II of the New York
Convention imposes a blanket prohibition on court-ordered
provisional measures in aid of international arbitration. (449) As Lord
Mustill put it, writing in the House of Lords:
536
114
page "2037"
“I am unable to agree with those decisions in the

United States (there has been no citation of authority
on this point from any other foreign source) which form
one side of a division of authority as yet unresolved by
the [U.S.] Supreme Court. These decisions are to the
effect that interim measures must necessarily be in
conflict with the obligations assumed by the
subscribing nations to the New York Convention,
because they ‘bypass the agreed upon method of
settling disputes': see McCreary Tire & Rubber Co. v.
CEAT SpA …. I prefer the view that when properly
used such measures serve to reinforce the agreed
method, not to bypass it.” (450)
There appears to be no decision outside the United States adopting

the McCreary/Cooper interpretation of Article II of the Convention.
c. Future Directions: Proper Application of Article II(3) to Court-

There is little question but that the broad interpretation of Article II(3)
of the New York Convention adopted in Cooper and subsequent
lower court decisions is both wrong as a matter of law and
misconceived as a matter of sound policy. With regard to the text
and intent of Article II(3), there is nothing at all in the provision that
categorically forbids court-ordered provisional measures in
connection with international arbitration. On the contrary, where the
parties have agreed to the possibility of court-ordered provisional
measures in their arbitration agreement (as in McCreary and
Cooper), (451) Article II of the Convention should be read to require –
rather than forbid – such relief. (452) Certainly, there is nothing in the
text of Article II or its drafting history to support the broad conclusion
that court-ordered provisional measures are never appropriate. (453)
Likewise, the broad Cooper holding makes no sense as a matter of

policy and on the contrary is badly misconceived. As discussed
above, provisional relief is page "2038" often necessary in order
to ensure that the arbitral process functions and the parties' rights
are respected. (454) Nonetheless, arbitrators sometimes simply
cannot provide provisional relief (especially where they are not yet in
place), they generally cannot order attachments (or other provisional
measures) as to third parties and their provisional measures are not
coercively enforceable. (455) In these cases, court-ordered
provisional measures may be the only way of protecting the
jurisdiction of the arbitral tribunal and enabling effective, meaningful
relief to be granted in a final arbitral award. Given this, the Cooper
rationale threatens, rather than furthers, the international arbitral
process, by denying what is often the only realistic means of
preserving the status quo. (456)
537
Marginally less implausible is the suggestion in Cooper that parties

should be left to agree specifically to allow national courts to order
pre-award security measures. (457) That argument at least properly
focuses on the primacy of the parties' agreement and the needs of
the arbitral process. But nothing in Cooper or otherwise justifies the
court's allocation of the burden of proof and its requirement for an
express agreement to permit court-ordered provisional measures.
For the reasons set forth above, it is instead very clear that, absent
contrary agreement, the parties intended, and justice would be
served by, the availability of court-ordered provisional measures that
are genuinely in aid of arbitration. (458)
Not surprisingly, as noted above, the weight of U.S. authority rejects

the view that Article II(3) of the Convention precludes court-ordered
provisional measures in aid of arbitration. (459) As also discussed
above, well-reasoned non-U.S. authority from a wide range of
jurisdictions uniformly reaches the same conclusion. (460)
There is a clear conflict between the (mistaken) interpretation of the

Convention in McCreary/Cooper and their progeny, on the one hand,
and that in Uranex and almost all other authority, from the United
States and elsewhere, on the other. From a U.S. (and international)
perspective, U.S. Supreme Court resolution of this issue page
"2039" would materially assist the international arbitral regime,
remove a serious uncertainty that affects the rights of U.S.
companies engaged in international commerce and hopefully bring
the United States into step with other Contracting States. The
uncertainty resulting from the Uranex versus McCreary/Cooper split
is particularly serious because of the urgency that often attends
requests for provisional relief.
Despite the errors of the McCreary/Cooper reasoning, it is also

important not to overlook the specific results in the two cases. As
discussed above, both cases involved very clear efforts by a party to
evade or circumvent its obligation to arbitrate, under the parties'
arbitration agreement, by seeking provisional measures in U.S.
courts. (461) In such circumstances, the results in Cooper and
McCreary are unexceptional – and indeed both desirable and
mandated by Article II(3). It is no more inappropriate to refuse to
entertain such a litigation – aimed at circumventing a valid
international arbitration agreement – than it would be to refuse to
entertain an action on the merits in violation of the parties' arbitration
agreement. Indeed, the basic interpretation of Article II(3) adopted by
McCreary (462) – that Article II(3) forbids judicial actions in national
courts in violation of the parties' arbitration agreement – is a sound
and non-controversial interpretation of the Convention.
Consistent with this, evaluation of applications for provisional

measures in national courts under the Convention requires a more
precise analytical approach to Article II(3) than that hitherto
displayed by either national courts or most commentators. A correct
resolution of any dispute over the propriety of court-ordered
provisional relief calls for a parsing of the parties' arbitration
538
116
agreement and any institutional rules incorporated by that

agreement to answer one fundamental question: do the parties'
agreement and any applicable institutional rules permit, or forbid,
either some or all court-ordered provisional measures? If the parties'
arbitration agreement forbids applications for provisional measures in
national courts, then such applications may not ordinarily be
pursued (and are, in fact, contrary to Article II(3)); on the other hand,
if the parties' agreement provides for the possibility of court-ordered
provisional measures, then such applications may ordinarily be
pursued in national courts without violating Article II(3) (and are, in
fact, arguably safeguarded by Article II). (463)
A recurrent question is what the parties should be presumed to have

intended if the parties' agreement and applicable institutional rules
provide no express answer to the question whether court-ordered
provisional measures are permitted. As discussed in greater detail
below, in the absence of express contractual language, the
presumption should be that court-ordered provisional relief in aid of
arbitration is impliedly permitted by an agreement to arbitrate, but
that efforts to circumvent arbitration are contrary to the parties'
intentions. This is consistent with the page "2040" reasonable
commercial expectations of parties acting in good faith and serves
to facilitate the arbitral process. (464)
Applying this approach to the interpretation of arbitration

agreements, one must then consider whether a specific application
for court-ordered provisional measures requested in a particular case
is consistent with, or inconsistent with, the parties' arbitration
agreement. (465) This requires careful analysis of the relevant
request for court-ordered provisional measures. As discussed below,
where a party is seeking court-ordered provisional measures
because no arbitral tribunal has been constituted, because
measures affecting third parties are desired, or because there are
credible doubts as to the enforceability of tribunal-ordered provisional
measures, then there is little or no reason to challenge an action in
national court as inconsistent with the parties' agreement. (466)
On the other hand, if a party seeks relief other than, or in addition to,
provisional measures, this should almost always be considered a
violation of the parties' arbitration agreement. (467) Similarly, a
party's effort to procure substantive findings in national court that
have or may have preclusive effect in the arbitral proceedings is
contrary to its agreement to arbitrate. Likewise, a party's effort to
litigate the same issues that are in dispute in the arbitration against
third parties (e.g., corporate affiliates, individual officers and
directors) that are related to the parties to the arbitration should be
considered a presumptive breach of the agreement to arbitrate. (468)
Under this analysis, Article II(3) does not forbid court-ordered pre-
award attachments or other provisional measures in aid of arbitration
where they are consistent with the terms of the parties' arbitration
agreement or applicable institutional rules. Conversely, Article II(3)
does forbid court-ordered provisional relief, and ancillary proceedings
539
that are intended to frustrate or circumvent the arbitral process, that

is contrary to the parties' agreement to arbitrate. This analysis
page "2041" gives proper weight to the parties' intentions and
permits the use of Article II(3) as a means for ensuring enforcement
of the parties' agreement to arbitrate.
d. Court-Ordered Provisional Measures under ICSID Convention
The ICSID Convention adopts a different approach to the autonomy

of the international arbitration process than the New York Convention
and most other international conventions, (469) which applies in the
context of provisional measures, as well as in other contexts. Article
26 of the ICSID Convention provides that the parties' consent to
ICSID arbitration “shall be deemed consent to such arbitration to the
exclusion of any other remedy.” (470) Article 26 was historically
interpreted to exclude court-ordered provisional measures, by both
the ICSID Centre (471) and some national courts. (472) This is
confirmed by the ICSID Arbitration Rules, which provide in Article
39(6) that parties may seek court-ordered provisional measures only
where their agreement so provides. (473)

Aid of International Arbitrations under National Arbitration
Legislation
The concurrent jurisdiction of national courts and arbitral tribunals to

issue provisional measures is expressly provided for by many
arbitration statutes. Although page "2042" a few national laws
are to the contrary (reserving provisional measures to national courts
alone (474) ), the overwhelming weight of national arbitration
legislation and judicial authority is that both arbitral tribunals and
national courts may (absent contrary agreement) issue provisional
measures in connection with an international arbitration. (475)
a. National Arbitration Legislation Generally Authorizing Court-

The UNCITRAL Model Law is a prime example of legislation

authorizing concurrent judicial and arbitral jurisdiction to grant
provisional measures. Article 17 of the 1985 Model Law provides
arbitral tribunals the power to order provisional relief (as discussed
above), while Article 9 expressly provides that parties do not
(ordinarily) violate their agreement to arbitrate simply by seeking
provisional measures from a national court. (476) The original Model
Law thereby plainly contemplates that both arbitral tribunals and
national courts will have concurrent power to order provisional
measures in connection with international arbitrations (unless the
parties have otherwise agreed). (477) Article 17J of the 2006
revisions to the Model Law goes further, providing expressly that a
national court “shall have the same power of issuing an interim
540
measure in relation to arbitration proceedings” as exist with regard

to judicial proceedings. (478)
Other developed arbitration legislation is similar. The Swiss Law on

Private International Law recognizes (albeit less expressly) the
concurrent powers of national courts and arbitral tribunals to order
provisional measures. (479) Legislation in page "2043" Belgium,
(480) the Netherlands, (481) Germany, (482) England (subject to
significant limitations, discussed below), (483) Japan, (484) India

(485) and elsewhere (486) also expressly grants national courts
concurrent jurisdiction to issue provisional relief in connection with
international arbitrations, unless the parties have otherwise agreed.
Judicial decisions in other jurisdictions recognize the same authority
of national courts to grant provisional relief in aid of arbitration. (487)
It is, of course, essential that requested relief in reality constitute

interim measures, and not an attempt to obtain judicial resolution of
the merits of the parties' underlying dispute; in the latter case,
national law (and the New York Convention (488) ) page "2044"
will not permit judicial relief. (489) Moreover, national courts have
emphasized that, where an arbitral tribunal has been constituted and
is in a position to grant provisional measures, judicial relief should
be granted sparingly. (490)
Even in jurisdictions where national legislation does not expressly

provide for concurrent jurisdiction to order provisional measures,
national courts have reached this result. In the United States, (491)
for example, the text of the FAA only grants federal courts the power
to order provisional measures with regard to a narrow category of
maritime disputes. (492) Nonetheless, outside the context of the
New York Convention, (493) the overwhelming weight of U.S. judicial
authority under the FAA concludes that federal courts possess
jurisdiction to issue provisional measures (absent contrary
agreement by the parties) to protect the parties and the arbitral
page "2045" process. (494) A few U.S. decisions are to the
contrary, (495) but these are ill-considered and do not reflect the true
state of U.S. domestic law. One U.S. court expressed the rationale
for court-ordered provisional measures under the domestic FAA in
clear terms:
page "2046"
“The Courts are not limited in their equity powers to

the specific function of enforcing arbitration
agreements but may exercise those powers required
to preserve the status quo of the subject matter in
controversy pending the enforcement of the arbitration
provision. To rule otherwise would in effect permit a
party to take the law into its own hands while the
proceeding is carried on as a result of the specific
direction of the Court [compelling arbitration]. … It
541
119
would be an oddity in the law if the Court, after

compelling a party to live up to his undertaking to
arbitrate, had to stand idly by during the pendency of
the arbitration which it has just directed and permit
him to assert his ‘right to breach a contract and to
substitute payment of damages for non-performance.’”
(496)
Likewise, also in the absence of statutory guidance, French courts

have concluded that an agreement to arbitrate does not ordinarily
preclude court-ordered provisional measures. (497) According to one
court:
“it is a principle of positive French law that the parties

to an agreement with an arbitration clause giving
jurisdiction to an arbitral tribunal of the ICC may have
recourse to the state courts to obtain conservatory
measures having in particular as their objective to
preserve the situation, the rights or the evidence and in
particular the existence of an arbitration clause does
not preclude action by the judge for urgent matters.”
(498)
In some jurisdictions, national law expressly limits the

circumstances in which court-ordered provisional measures may be
ordered in connection with a dispute that is subject to arbitration.
Under §44 of the English Arbitration Act, 1996, for example, an
English court is granted the power to order provisional measures in
aid of arbitration only in specified circumstances (e.g., only
preservation of evidence or assets in cases of urgency); in all other
circumstances, the court may grant provisional measures only with
the “permission” of the tribunal or if the tribunal is unable to act.
(499) Alternatively, some legislation qualifies national court authority
to grant provisional measures with the condition that the applicant
demonstrate that page "2047" an application to the arbitral
tribunal for similar measures would prejudice its rights. (500)
In other jurisdictions, local legislation has deliberately expanded the

authority of local courts to grant provisional measures in aid of
arbitration. For example, as noted above, New York's legislature
amended N.Y. C.P.L.R. §7502(c) to permit provisional measures to
be more readily granted in aid of international arbitrations. (501)
Article 17J of the 2006 revisions to the UNCITRAL Model Law

provides that national courts have the same power to grant
provisional relief in aid of arbitration as they have “in relation to
proceedings in court.” (502) The same paragraph also provides “[t]he
court shall exercise such power in accordance with its own
procedures in consideration of the specific features of international
arbitration.” (503)
page "2048"
542
b. Rationale for Concurrent Judicial Jurisdiction to Grant

Provisional Measures in Aid of Arbitration
The existence of concurrent jurisdiction to grant provisional relief, in

both national courts and arbitral tribunals, is an exception to the
general objective of international arbitration agreements, which is to
centralize the resolution of all disputes in a single, neutral forum and
to limit the involvement of national courts in dispute resolution
(particularly the courts of one or both parties to the dispute). (504)
One may rightly question whether it is wise to permit two separate
authorities from which provisional measures may be obtained, which
conflicts with the goal of centralizing dispute resolution and which
permits a degree of forum-shopping.
On the other hand, provisional measures often call for immediate

relief in order to stop potentially irreparable harm (e.g., the
destruction of evidence, transfer of funds or property to third parties).
In some cases, the inability of a party to stop such actions will
effectively decide the parties' dispute (by default), since meaningful
relief will no longer be available after the actions in question. Further,
in certain circumstances, the only realistically effective forum which
can provide provisional relief is a local court (where the evidence or
property is located). Allowing claimants to seek such relief from any
available forum can therefore be (exceptionally) justified because of
the peculiar character of, and necessity for, provisional measures.
Moreover, as already discussed, it is also often not possible for

arbitral tribunals to grant effective provisional measures. (505) In
these circumstances, it is essential that national courts be
permitted to grant interim relief in aid of the (future) arbitration. (506)
Likewise, there may be circumstances where the only effective
provisional measures will involve third parties, who will be beyond the
arbitral tribunal's authority. (507)
page "2049"
c. Parties' Right to Seek Provisional Measures from Both

Arbitral Tribunal and National Court(s) and Preference for
Arbitral Forum
In many developed jurisdictions, a party is free to seek provisional

measures from either the arbitral tribunal or a national court (as a
corollary of the principle of concurrent jurisdiction). Most arbitration
statutes – including the UNCITRAL Model Law, the 2006 revisions to
the Model Law, the U.S. FAA and the Swiss Law on Private
International Law – simply provide for concurrent jurisdiction without
requiring a party to seek provisional measures in one forum, rather
than another. Absent contrary agreement, parties arbitrating
pursuant to national arbitration legislation of this character are free
to seek provisional measures from either the arbitral tribunal or a
national court.
543
Other arbitration legislation sometimes requires parties to seek

provisional relief in a preferred forum. For example, as noted above,
the English Arbitration Act, 1996, provides that a court may only
grant provisional measures: (a) if urgently required, to preserve
evidence or assets; (b) if the arbitral tribunal permits; or (c) if the
arbitral tribunal lacks the power (at the time) to act effectively. (508)
Other arbitration legislation is similar, preferring arbitral tribunals as
the forum for applications for provisional measures. (509)
Many institutional rules also prefer applications to the arbitral

tribunal for provisional measures over applications to national courts.
(510) The ICC Rules provide that parties may seek provisional
measures from a national court either “before the file is transmitted
to the Arbitral Tribunal,” or “in appropriate circumstances even
thereafter.” (511) The LCIA Rules even more explicitly prefer the
arbitral tribunal as the forum for provisional measures, providing that
parties may seek provisional relief from national courts “before the
formation of the Arbitral Tribunal and, in exceptional cases,
thereafter.” (512) These provisions do not impose particularly clear
restrictions on applications for court-ordered provisional measures,
but they make page "2050" it plain that the arbitral tribunal is
the preferred forum for provisional measures applications once the
tribunal has been constituted.
Absent guidance in either national law or the parties' agreement (and

institutional rules), courts should be hesitant to conclude that a
party must pursue its application for provisional measures in one
forum rather than another. As discussed above, the principle of
concurrent jurisdiction is deeply-rooted and sensible: courts should
impose limitations on parties' freedom to seek effective provisional
measures only in clear cases. (513)
It is sometimes argued that parties agree to arbitrate in order to

centralize dispute resolution and that judicial consideration of
applications for provisional measures contradicts this objective. (514)
There is force to these observations, but they omit to consider the
long-standing acceptance of concurrent jurisdiction to grant
provisional measures (for important practical, as well as historical,
reasons).
It is also argued that judicial consideration of provisional measures

applications may interfere with the arbitral process or be inefficient.
Where a provisional measures application does interfere with the
arbitral process – particularly in connection with efforts to circumvent
the parties' arbitration clause – then that application should be held
contrary to the agreement to arbitrate. This was the result in
decisions such as McCreary and Cooper. (515) As discussed above,
such a conclusion is appropriate where parties request relief from
national courts in addition to provisional measures, seek to procure
substantive decisions from national courts designed to have res
judicata effect in the arbitration, or take steps that aim to complicate
or delay the arbitral proceedings. (516)
544
d. Parties' Autonomy to Exclude Court-Ordered Provisional

Measures
As noted above, (517) most jurisdictions authorize court-ordered

provisional measures in aid of arbitration, provided that the parties
have not agreed otherwise. For the most part, this caveat is not
reflected in express statutory language, (518) but is the result of
judicial decisions giving effect to principles of party autonomy: if
parties wish to exclude recourse to national courts for provisional
measures, they are generally permitted to do so. (519) Among other
things, parties may wish to centralize page "2051" all dispute
resolution in a single (arbitral) forum, including requests for
provisional measures; although this may inhibit one (or both) parties'
access to provisional measures, the desire for efficiency, centralized
dispute resolution, confidentiality and neutrality may lead parties to
exclude court-ordered provisional measures. (520)
There may be circumstances in which a party's agreement not to

seek court-ordered provisional measures will be unenforceable.
Some national courts (521) and commentators (522) have concluded
that agreements not to seek court-ordered provisional measures will
not be given effect when no relief is available via the arbitral process.
Despite these views, commercial parties should generally be left free
to waive recourse to national courts for provisional measures, if this
is in fact what they have chosen to do: parties are generally free to
bargain for, or not to bargain for, security or expedited means of
enforcing their rights. A sophisticated commercial party's deliberate
decision to forego one avenue for interim measures should, even if
ill-advised, be no different.
On the other hand, as an interpretative matter, courts should not

lightly conclude that a party has agreed to waive access to court-
ordered provisional measures. As discussed above, the principle of
concurrent jurisdiction with regard to provisional measures is deeply-
rooted and sensible; in the absence of contrary agreement, it should
be considered to reflect the parties' mutual expectations. (523)
page "2052"
Given the principle of concurrent jurisdiction, an agreement to

arbitrate should not (without more) be considered as a waiver of
rights to court-ordered provisional measures. Similarly, an
agreement incorporating institutional rules (or otherwise) granting an
arbitral tribunal the power to order provisional measures should not
be deemed to waive the right to seek court-ordered provisional
measures. In neither case is such an agreement contrary to the
existence of concurrent judicial power to grant provisional measures
in aid of arbitration. Consistent with this, courts in most common
law (524) and civil law (525) jurisdictions have presumed that the
parties intended to permit court-ordered provisional measures,
provided that they are genuinely in aid of arbitration.
123545
Questions may also arise as to whether an exclusion agreement

extends to, or may enforceably extend to, judicial actions to enforce
tribunal-ordered provisional measures. The better view is that, save
where express and precise language excluding judicial enforcement
of provisional measures is used, parties should not be held to have
agreed to such a result. That is because this result effectively
renders tribunal-ordered provisional measures unenforceable, which
is a highly unsatisfactory and uncommercial result. (526)
e. Application for Court-Ordered Provisional Measures Does Not

Ordinarily Waive Rights to Arbitrate
Most arbitration legislation makes it clear that an application for

court-ordered provisional measures does not generally waive rights
under the parties' arbitration agreement. This is best considered as
a corollary to the principle of concurrent jurisdiction to grant
provisional measures in aid of an international arbitration. (527)
page "2053"
As noted above, Article 9 of the UNCITRAL Model Law provides that,

as a general rule, parties do not violate an agreement to arbitrate
simply by seeking court-ordered provisional measures. (528) Similar
provisions exist in other arbitration statutes, (529) while judicial
precedent generally arrives at the same conclusion. (530) Likewise,
Article VI(4) of the European Convention, (531) as well as most
institutional page "2054" rules, (532) provides that a request for
court-ordered provisional measures does not independently
constitute a waiver of rights under an arbitration agreement.
It is important, however, to understand the limits of this statement. It

does not mean that no request for court-ordered provisional
measures can constitute a waiver of a right to arbitrate. Rather, it
means that, where the parties have simply agreed to arbitrate
(without excluding court-ordered provisional measures), an
application for court-ordered provisional measures is not necessarily
a waiver of the right to arbitrate. (533) Nonetheless, if the parties
have agreed to exclude court-ordered provisional measures or if a
party seeks court-ordered provisional measures in an effort to
circumvent an arbitration clause, then the foregoing principle
requires qualification. In these circumstances, a party's application
for court-ordered provisional measures may well be contrary to its
agreement to arbitrate and, under applicable national law, may be
deemed a waiver of its arbitration rights. (534)
f. Choice of Law Applicable to Court-Ordered Provisional

Measures
Assuming that a national court has the power to issue provisional

measures in connection with an international arbitration, the
546
question arises what law will apply to requests for such relief.
National courts will virtually always apply their own law to the
availability and form of court-ordered provisional measures. In
particular, the relief requested in aid of an arbitration must, of
course, be a category of relief recognized and available under the
law of the judicial forum.
The foregoing conclusion is made explicit in Article 183(2) of the

Swiss Law on Private International Law, which provides that “[t]he
court shall apply its own law” to requests for court-ordered
provisional measures. (535) The 2006 revisions to the UNCITRAL
Model Law are identical. (536) Courts in other jurisdictions take the
same approach, typically applying local law to requests for court-
ordered provisional relief. (537)
page "2055"
In principle, most national courts apply generally-applicable local

standards for pre-judgment relief to requests for court-ordered
provisional measures in aid of arbitration. (538) Nevertheless, some
courts have suggested that special requirements apply to requests
for court-ordered provisional measures, taking into account the
particular characteristics of international arbitration and the possible
availability of relief from the arbitral tribunal. (539)
Thus, some lower U.S. courts have held that court-ordered

provisional relief will not be granted unless it is absolutely necessary
to protect the arbitral process. (540) Similarly, some U.S. lower
courts have considered a blend of traditional equitable standards,
implied expectations of the parties and needs of the arbitral process.
(541) page "2056" To the same effect, the Hong Kong
Arbitration Ordinance has been interpreted as disfavoring requests
for court-ordered provisional measures if the tribunal has been
constituted and could provide relief. (542) These prudential restraints
reflect sound policy, to avoid judicial interference with the arbitral
process, but courts should nonetheless be prepared to issue
provisional measures where no alternative exists.
g. What National Court Possesses Jurisdiction to Grant

Provisional Measures?
Assuming that the parties' agreement does not exclude court-

ordered provisional measures in aid of an international arbitration,
the question arises as to what national court(s) should have the
jurisdiction to grant such measures. In particular, should such
jurisdiction be limited to the courts of the arbitral seat, or should
provisional measures in aid of arbitration also be available in other
national courts? There is relatively little authority that addresses this
question.
i. New York Convention Is Silent as to National Court

Possessing Jurisdiction to Order Provisional Measures
547
125
It is relatively clear that nothing in either the New York Convention or

any other international arbitration convention addresses the question
of what national court(s) possess(es) jurisdiction to order provisional
measures in connection with an international arbitration. No
provision of any of these instruments addresses this issue. (543)
ii. Forum Selection Agreements
In some cases, parties agree upon a contractual forum for

provisional measures in aid of arbitration. When this occurs, most
national laws will give effect to the parties' contractual choice-of-
forum. (544) It is often unwise for parties to limit themselves to
page "2057" a single contractual forum for pursuing provisional
measures: there may be instances where immediate applications for
provisional measures in the place of the expected wrongful actions
are required. (545) Courts will generally (and properly) not interpret
general forum selection clauses as applying to requests for
provisional measures. (546)
iii. National Law Permitting Courts in Arbitral Seat to Order

Provisional Relief
Whether or not the parties have agreed upon a contractual forum for
court-ordered provisional measures, national law will be decisive for
determining what forum(s) will or will not issue such relief. Generally-
applicable legislation concerning the availability of provisional
measures will typically determine whether a national court is
competent to issue provisional relief in connection with a particular
arbitration. There is relatively little uniformity among different
legislative regimes on this issue.
In most states, national courts have the statutory authority to issue

provisional measures in aid of arbitrations with their seat within
national territory. That is, if an international arbitration is seated in
State A, then the courts of State A will ordinarily have the power
under State A's private international law legislation to order
provisional measures in relation to the arbitration. This is the case
under the 2006 revisions of the Model Law, as well as under a few
other arbitration statutes. (547)
iv. National Law Permitting Courts to Order Provisional Relief in

Aid of Foreign Arbitration
The courts of the state where the arbitration is being conducted may
not be in a position to grant effective provisional relief. Particularly
where attachment or similar remedies are sought, only the
jurisdiction where the defendant's assets are located may be able to
grant meaningful provisional relief. That is because security
measures often have only territorial effect and, even when they
548
purport to apply extraterritorially, enforcement may be impossible or

difficult. (548) In those page "2058" circumstances, according
exclusive jurisdiction to the state where the arbitration is pending
may not be warranted.
In part for these reasons, some national courts have concluded that
they have the power to order provisional relief in connection with a
foreign arbitration. Thus, a number of lower U.S. courts have granted
provisional measures in aid of arbitrations being conducted in a
foreign country, under the arbitration law of that country, albeit often
without analysis. (549) In England, the House of Lords has
concluded that English courts have the power to grant provisional
measures in connection with a non-English arbitration. (550) Hong
Kong courts have also affirmed their inherent authority to issue
provisional measures in aid of foreign arbitrations, (551)
as have Swiss courts. (552)
page "2059"
The foregoing results are consistent with Articles 1(2) and 9 of the
UNCITRAL Model Law, which provide that an arbitration agreement
does not ordinarily preclude a party from applying to “a court” for
provisional measures, without suggesting that “a” court is only a
court in the arbitral seat. (553) Judicial decisions in Model Law
jurisdictions affirm this result. (554) The 2006 revisions of the Model
Law make the point even more explicitly. (555)
In contrast, other arbitration legislation appears to deny national

courts the power to grant provisional measures in connection with
foreign arbitrations. Indian judicial decisions initially adopted this
view, (556) but have more recently held that interim relief may be
granted in aid of a foreign arbitration. (557)
v. Judicial Reserve in Ordering Provisional Relief in Aid of

Foreign Arbitration
Even if a national court has the power to issue provisional measures

in connection with a foreign arbitration, there are strong reasons for
exercising such authority with circumspection. When a court in
State A issues provisional measures in connection with an
arbitration seated in State B, it runs a double risk, of interfering in (a)
the arbitral proceedings, and (b) the (limited) supervisory jurisdiction
of the courts in the arbitral seat. In these circumstances, courts
have rightly demonstrated caution in granting provisional measures.
(558)
page "2060"
A leading example of a national court's caution in this regard was

the English House of Lords' decision in Channel Tunnel Group Ltd v.
Balfour Beatty Constr. Ltd. The case involved disputes arising from
549
an international consortium of French and English parties, with a

complex arbitration clause providing for ICC arbitration in Belgium.
After the arbitration clause was invoked, one party sought provisional
measures in English courts. After reversing a lower court decision
(holding that English courts lacked the power to order injunctive
relief), the House of Lords held that although this power existed it
would nonetheless be inappropriate for the English courts to
exercise their authority to order provisional measures in aid of the
Belgian arbitration. Preliminarily:
“the court should bear constantly in mind that English

law, like French law, is a stranger to this Belgian
arbitration, and that the respondents are not before the
English court by choice. In such a situation the court
should be very cautious in its approach both to the
existence and to the exercise of supervisory and
supportive measures, lest it cut across the grain of
the chosen curial law.” (559)
The House of Lords went on to observe that the requested

“provisional measures” were in fact almost identical to the requested
final relief in the arbitration, and that granting this relief would have
had a substantial impact on the parties' litigation positions. The Law
Lords expressed serious reservations about granting this sort of
relief, and then concluded:
“Any doubts on this score are to my mind resolved by

the choice of the English rather than the Belgian
courts as the source of interim relief. … [T]he Belgian
court must surely be the natural court for the source of
interim relief. If the appellants wish the English court
to prefer itself to this natural forum it is for them to
show the reason why, in the same way as a plaintiff
who wishes to pursue a substantive claim otherwise
than in a more convenient foreign court … They have
not done so. Apparently no application for interim relief
has been made to the court in Brussels. …
Notwithstanding that the court can and should in the
right case provide reinforcement for the arbitral
process by granting interim relief I am quite satisfied
that this is not such a case, and that to order an
injunction here would be to act contrary both to the
general tenor of the construction contract and to the
spirit of international arbitration.” (560)
A similar caution is reflected in other national court decisions. In

Borden, Inc. v. Meiji Milk Products Co., (561) a U.S. appellate court
held that it had the power to page "2061" grant court-ordered
provisional measures in aid of a foreign arbitration, (562) but then
relied on a forum non conveniens analysis to conclude that
Japanese (rather than U.S.) courts would be better-suited to
considering an application for court-ordered provisional measures.
Relying on the trial court's findings, the U.S. court reasoned:
550
“[The trial court] found that only the Japanese market

and consumers are affected by the parties' dispute
and that all necessary fact witnesses are in Japan.
The court found further that an injunction issued in
Japan clearly would be enforceable there, whereas one
obtained in this country might not be. Examining the
public interests at stake, the court found that Japan
has a much greater interest in the litigation than does
the United States.… Under the circumstances of the
instant case, we hold that the court's decision to
dismiss [on forumnon conveniens grounds] was
sufficiently justified.” (563)
In each of the foregoing English and U.S. cases, the court refused to
exercise a concededly-existent judicial power to grant provisional
measures in aid of a foreign arbitration. Both courts cited a variety of
factors counseling against the exercise of this authority. In Channel
Tunnel, the House of Lords considered: (a) the seat of the
arbitration; (b) the procedural law of the arbitration; (c) the
substantive law governing the parties' underlying dispute; (d) the
fortuitous involvement of English courts, merely because the
defendants were domiciled there; (e) the fact that the requested
“interim” relief in fact would have resolved much of the parties'
dispute; (f) the fact that courts should generally be reluctant to grant
provisional relief in aid of any arbitration; and (g) the fact that a
Belgian court was the “natural court” to consider the issue, since the
arbitration had its seat in Belgium. In contrast, the page
"2062" Borden court considered: (a) the seat of the arbitration; (b)
the location of the conduct giving rise to the parties' underlying
dispute; (c) the location of the evidence and witnesses; (d) the
respective interests of the possible judicial fora in issuing relief; and
(e) the ease of enforcing the court's order.
The basic circumspection displayed by both the English and U.S.

courts, when requested to order provisional relief in aid of a foreign
arbitration, is appropriate, as is the general approach of considering
whether or not to grant such relief on a case-by-case basis. As
between the two approaches, the factors considered by the Channel
Tunnel opinion appear, in principle, more directly-focused on the
appropriateness of granting court-ordered provisional measures in
connection with a foreign arbitration. These factors more specifically
address the extent to which a national court may intrude upon a
foreign court's supervisory jurisdiction, or a foreign arbitral tribunal's
authority. At the same time, courts considering whether to grant
provisional measures should also examine the extent to which an
arbitral tribunal has already been constituted and whether it appears
capable of issuing the requested provisional relief (e.g., because of
territorial limitations). Even where the arbitral tribunal is unable to
act, a court outside the arbitral seat must consider with care why it
– rather than a court in the arbitral seat – has been requested to
provide provisional relief, and whether doing so would inappropriately
interfere with the supervisory authority of courts in the arbitral seat.
h. Recognition of Court-Ordered Provisional Relief

551
129
If a court, in the arbitral seat or elsewhere, orders provisional

measures in aid of an international arbitration, the prevailing party
may seek to enforce that order (or judgment) abroad. General
principles of private international law, in the relevant jurisdictions, will
apply to such enforcement efforts. (564) In general, it will be difficult
successfully to enforce judgments granting provisional measures, in
aid of arbitral proceedings, because they are not “money” judgments
and are arguably not “final” for purposes of many national
enforcement regimes. (565)
page "2063"

Aid of International Arbitrations under Institutional Arbitration
Rules
Like most developed arbitration legislation, leading institutional rules

confirm the availability of court-ordered provisional measures. (566)
Most institutional rules provide expressly that parties remain free,
notwithstanding their agreements to arbitrate, to apply to national
court(s) for provisional measures (at least in certain circumstances).
For example, Article 26(3) of the UNCITRAL Rules provides that “a
request for interim measures addressed by any party to a judicial
authority shall not be deemed incompatible with the agreement to
arbitrate, or as a waiver of that agreement.” (567) This provision has
been interpreted, in accordance with its plain language, as
permitting parties to apply to national courts for provisional
measures without material qualifications (such as, for example,
permitting applications for court-ordered provisional measures only
before the arbitral tribunal has been formed). (568)
Other institutional rules also permit applications for court-ordered

provisional measures, albeit with some restrictions. Most
significantly, Article 23(2) of the ICC Rules provides:
“Before the file is transmitted to the Arbitral Tribunal,

and in appropriate circumstances even thereafter, the
parties may apply to any competent judicial authority
for interim or conservatory measures. The application
of a party to a judicial authority for such measures or
for the implementation of any such measures ordered
by an Arbitral Tribunal shall not be deemed to be an
infringement or a waiver of the arbitration agreement.”
(569)
page "2064"
Unlike the UNCITRAL Rules, Article 23(2) imposes limits on the

rights of the parties to seek provisional relief from national courts.
The provision attempts to make it clear that, prior to constitution of
the arbitral tribunal, requests for court-ordered provisional measures
552
130
are in principle permitted; after the tribunal is constituted, however,

judicial relief is permitted only in “appropriate circumstances.” (570)
The LCIA Rules are similar. (571)
Under both the ICC and LCIA Rules, (572) the expectation is that
requests for provisional measures will be presumptively addressed to
the arbitral tribunal once it has been constituted, rather than to
national courts. After the tribunal has been constituted, request for
provisional measures may be made to national courts only in
“exceptional” or “appropriate” circumstances. For the reasons noted
above, however, parties will not infrequently have justifiable grounds
for seeking court-ordered provisional measures even after an arbitral
tribunal has been constituted: it may require provisional measures
involving third parties, or may reasonably believe that tribunal-
ordered provisional measures will not be complied with, or may
reasonably believe that ex parte action is essential. A party's
application for court-ordered provisional measures in any of these
circumstances is consistent with the purposes of the ICC and LCIA
Rules, and should not ordinarily be considered a breach or waiver of
the parties' arbitration agreement. (573)
page "2065"
5. Judicial Assistance in Taking Evidence in International

Arbitration
As noted above, some authorities treat the preservation or

production of evidence as a form of provisional measures. (574)
Putting aside the question whether this characterization is useful,
some arbitration legislation grants national courts power to order
disclosure or discovery in aid of arbitral tribunals. (575) These
statutory provisions are discussed in detail above. (576)
page "2066"
405 For commentary, see Becker, Attachments in Aid of

International Arbitration – The American Position, 1 Arb. Int'l 40
(1985); Brody, An Argument for Pre-Award Attachment in
International Arbitration under the New York Convention, 18 Cornell
Int'l L.J. 99 (1985); Brower & Tupman, Court-Ordered Provisional
Measures under the New York Convention, 80 Am. J. Int'l L. 24
(1986); Hoellering, Interim Measures and Arbitration: The Situation
in the United States, 46 Arb. J. 22 (1991); Huntley, The Scope of
Article 17: Interim Measures under the UNCITRAL Model Law, 740
PLI/Lit. 1181 (2005); Jarvin, Is Exclusion of Concurrent Courts'
Jurisdiction Over Conservatory Measures to be Introduced by A
Revision of the Convention?, 6(1) J. Int'l Arb. 171 (1989); McDonnell,
The Availability of Provisional Relief in International Commercial
553
131
Arbitration, 22 Colum. J. Transnat'l L. 273 (1983-1984); Redfern,

Arbitration and the Courts: Interim Measures of Protection - Is the
Tide About to Turn?, 30 Tex. Int'l L.J. 72 (1995); Reichert,
Provisional Remedies in the Context of International Commercial
Arbitration, 3 Int'l Tax & Bus. Law. 368 (1986).
406 See supra pp. 1972-1973.
407 See supra pp. 1970-1971.
408 See supra pp. 1971-1972.
409 See supra pp. 1965-1966.
410 E.g., Jarvin, Is Exclusion of Concurrent Courts' Jurisdiction
Over Conservatory Measures to Be Introduced by A Revision of the
Convention?, 6(1) J. Int'l Arb. 171 (1989) (“Intervention by state
courts offers the only effective means for implementing conservatory
measures during an arbitration.”); Sanders, Commentary on the
UNCITRAL Arbitration Rules, II Y.B. Comm. Arb. 172, 197 (1977)
(noting possibility that party seeking provisional measure may
“prefer to approach the court instead of addressing himself to the
arbitral tribunal”); Caron, Interim Measures of Protection: Theory and
Practice in Light of the Iran-United States Claims Tribunal, 46
Zeitschrift für ausländisches öffentliches Recht und Völkerrecht 465
(1986) (“in municipal legal orders, there ordinarily is a court that is
readily available, that has jurisdiction and the ability to deliver an
enforceable judgment. Most certainly this is not the case in
international arbitration. Indeed, compensation in an international
context is often uncertain.”).
411 See supra pp. 1020-1024, 1128-1130.
412 Neither the Geneva Protocol nor the Geneva Convention
contained any reference to provisional measures in international
arbitration, whether granted by arbitral tribunals or national courts.
See supra p. 1946.
413 European Convention, Art. VI(4). See supra pp. 1946-1947,
1972-1973.
414 See Award in ICC Case No. 4415, 111 J.D.I. (Clunet) 952
(1984); J.-F. Poudret & S. Besson, Comparative Law of International
Arbitration ¶612 (2d ed. 2007); Hascher, European Convention on
International Commercial Arbitration of 1961 - Commentary, XX Y.B.
Comm. Arb. 1006 (1995).
415 See, e.g., Judgment of 12 June 1991, Bahia Indus. SA v.
Eintacar-Eimar SA, XVIII Y.B. Comm. Arb. 616 (Cadiz Provincial
Court) (1993).
416 See supra pp. 1948-1949.
417 See infra pp. 2031-2034; I.T.A.D. Assoc., Inc. v. Podar Bros.,
636 F.2d 75 (4th Cir. 1981); McCreary Tire & Rubber Co. v. CEAT
SpA, 501 F.2d 1032 (3d Cir. 1974); Cooper v. Ateliers de la
Motobecane, SA, 442 N.E.2d 1239 (N.Y. 1982).
418 See infra pp. 2034-2037; Carolina Power & Light Co. v. Uranex,
451 F.Supp. 1044 (N.D. Cal. 1977); Rhone Mediterranee etc. v.
Lauro, 555 F.Supp. 481 (D.V.I. 1982).
419 See authorities cited at infra pp. 2037-2038.
554
420 501 F.2d 1032 (3d Cir. 1974). See Brower & Tupman, Court-
Ordered Provisional Measures under the New York Convention, 80
Am. J. Int'l L. 24, 27 (1986) Zeft, The Applicability of State
International Arbitration Statutes and the Absence of Significant
Preemption Concerns, 22 N.C. J. Int'l L. & Com. Reg. 705, 768
(1997).
421 See, e.g., Filanto SpA v. Chilewich Int'l Corp., 789 F.Supp.
1229 (S.D.N.Y. 1992), app. dismissed, 984 F.2d 58 (2d Cir. 1993);
Channel Tunnel Group Ltd v. Balfour Beatty Constr. Ltd [1993] A.C.
334 (House of Lords) (rejecting Cooper reading of Article II(3)); Ebb,
Flight of Assets From the Jurisdiction “In the Twink ling of a Telex”:
Pre- and Post-Award Conservatory Relief in International
Commercial Arbitration, 7(1) J. Int'l Arb. 9 (1990); Brower & Tupman,
Court-Ordered Provisional Measures under the New York
Convention, 80 Am. J. Int'l L. 24 (1986); Becker, Attachments in Aid
of International Arbitration – The American Position, 1 Arb. Int'l 40
(1985); McDonnell, The Availability of Provisional Relief in
International Commercial Arbitration, 22 Colum. J. Transnat'l L. 273
(1983-1984); Committee on Arbitration and Alternative Dispute
Resolution, The Advisability and Availability of Provisional Remedies
in the Arbitration Process, 39 Record Ass'n Bar City of N.Y. 625,
629 (1984). See also infra pp. 2034-2042.
422 501 F.2d at 1032.
423 501 F.2d at 1034.
424 501 F.2d at 1038.
425 As described above, Article II(3) of the Convention requires that
courts of Contracting States enforce arbitration agreements by
referring the parties to arbitration. See supra pp. 202-205, 1005-
1007, 1021, 1025-1028.
426 501 F.2d at 1038 (emphasis added).
427 McCreary involved an ICC arbitration, and Article 8(5) of the
then-prevailing 1988 ICC Rules was therefore applicable. As
discussed above, supra p. 1959, Article 8(5) of the 1988 ICC Rules
provided that “[b]efore the file is transmitted to the arbitrators, and in
exceptional circumstances even thereafter, the parties shall be at
liberty to apply to any competent judicial authority for interim or
conservatory measures, and they shall not by so doing be held to
infringe the agreement to arbitrate or to affect the relevant powers
reserved to the arbitrator.” Even though the ICC Rules provided that
seeking attachment does not in principle violate the parties'
arbitration agreement, that does not mean that it never does. Where
the attachment is plainly part of a scheme to substitute litigation for
arbitration, Article 8(5) of the ICC Rules would not permit it. See
supra p. 1959 & infra pp. 2064-2065.
428 See supra pp. 1972-1973 & infra pp. 2043-2048, 2049.
429 At the same time, the McCreary opinion contained broad
language concerning Article II(3), which, if read independently, could
be understood as forbidding all court-ordered provisional measures.
See 501 F.2d at 1037.
430 Cooper v. Ateliers de la Motobecane, SA, 442 N.E.2d 1239
555
(N.Y. 1982).
431 Cooper, 442 N.E.2d at 1243 (emphasis added). There were
also statements in Cooper that questioned the necessity for any
orders of provisional measures in connection with international
arbitration: “It is open to dispute whether attachment is even
necessary in the arbitration context. Arbitration, as part of the
contracting process, is subject to the same implicit assumptions of
good faith and honesty that permeate the entire relationship.
Voluntary compliance with arbitral awards may be as high as 85%.
Moreover, parties are free to include security clauses (e.g.,
performance bonds or creating escrow accounts) in their
agreements to arbitrate.” 442 N.E.2d at 1242.
The foregoing rationale reflects a fairly basic misunderstanding of the

arbitral process. Although parties agree to international arbitration in
an effort to resolve disputes in good faith, once disputes arise,
provisional measures such as attachments are no less important
than in a domestic litigation context. Indeed, for the reasons
discussed above, provisional measures are generally more important
in international contexts than in purely domestic ones. See supra
pp. 1943-1945. The Court of Appeals' comments to the contrary in
Cooper are therefore not serious policy grounds for withholding
court-ordered provisional measures in connection with international
arbitrations.
432 See, e.g., Drexel Burnham Lambert, Inc. v. Ruebsamen, 531

N.Y.S.2d 547 (N.Y. App. Div. 1988); I.T.A.D. Assoc., Inc. v. Podar
Bros., 636 F.2d 75 (4th Cir. 1981); McDonnell Douglas Corp. v.
Kingdom of Denmark , 607 F.Supp. 1016 (E.D. Mo. 1985); Siderius,
Inc. v. Compania de Acero del Pacifico, SA, 453 F.Supp. 22
(S.D.N.Y. 1978); Metropolitan World Tank er Corp. v. P.N.
Pertambangan Minjak dangas Bumi Nasional, 427 F.Supp. 2
(S.D.N.Y. 1975); Shah v. Eastern Silk Indus. Ltd, 493 N.Y.S.2d 150
(N.Y. App. Div. 1985); Faberge Int'l Inc. v. Di Pino, 491 N.Y.S.2d
345 (N.Y. App. Div. 1985). SeealsoLafarge Coppee v. Venezolana
de Cementos, S.A.C.A., 31 F.3d 70 (2d Cir. 1994) (discussing grant
of provisional injunctive relief in aid of arbitration).
While parts of the rationale and the specific results in Cooper and
McCreary can be explained as involving litigation that was designed
to frustrate the arbitral process, subsequent decisions following
Cooper and McCreary cannot. In these cases, Article II(3) was
invoked where it was clear that court-ordered provisional measures
were not intended to circumvent the arbitral process.
433 Drexel Burnham Lambert, Inc. v. Ruebsamen, 531 N.Y.S.2d

547 (N.Y. App. Div. 1988).
547, 548 (N.Y. App. Div. 1988).
551 (N.Y. App. Div. 1988).
556
436 See Sanders, Consolidated Commentary on Court Decision on

the New York Convention 1958, XIV Y.B. Comm. Arb. 528, 570
(1989) (“no court has doubted that an attachment in connection with
the enforcement of an arbitral award, in order to secure payment
under the award, is compatible with the Convention”); Cooper v.
Ateliers de la Motobecane SA, 442 N.E.2d 1239 (N.Y. 1982).
437 Carolina Power & Light Co. v. Uranex, 451 F.Supp. 1044 (N.D.
Calif. 1977). Note that in Uranex, in contrast to McCreary and
Cooper, there was no evidence that the pre-award attachment was
designed to do anything other than secure the final arbitral award
(and hence, aid the arbitral process).
438 Carolina Power & Light v. Uranex, 451 F.Supp. 1044, 1051-
1052 (N.D. Cal.1977). The Uranex court noted that the FAA permits
pre-judgment attachments. The Anaconda v. Am. Sugar Refining
Co., 322 U.S. 42, 44-45 (U.S. S.Ct. 1944). See also Murray Oil
Products Co. v. Mitsui & Co., 146 F.2d 381 (2d Cir. 1944).
439 For other lower court decisions adopting the Uranex analysis of
the Convention, see Borden, Inc. v. Meiji Milk Prods. Co., 919 F.2d
822, 826 (2d Cir. 1990) (“We hold that entertaining an application for
a preliminary injunction in aid of arbitration is consistent with the
court's powers pursuant to [the Convention]”); Ledee v. Ceramiche
Ragno, 684 F.2d 184 (1st Cir. 1982); Bahrain Telecomm. Co. v.
Discoverytel, Inc., 476 F.Supp.2d 176, 181 (D. Conn. 2007)
(agreeing “with those courts that have rejected McCreary's reasoning
and holding”); James Assoc. Ltd v. Anhui Mach. & Equip. Imp. and
Exp. Corp., 171 F.Supp.2d 1146 (D. Colo. 2001); Signature
Mark eting Pty Ltd v. Slim Print Int'l LLC, 2001 U.S. Dist. LEXIS
21222 (D. Conn. 2001); China Nat'l Metal Prods. Import/Export Co.
v. Apex Digital, Inc., 155 F.Supp.2d 1174, 1179 (C.D. Cal. 2001)
(“The court disagrees with Apex and McCreary and concludes that
Article II(3) of the Convention does not deprive the court of subject
matter jurisdiction over this action and particularly to order
provisional relief, e.g., a pre-arbitral award writ of attachment pending
reference to arbitration and pending the conclusion of the arbitration
proceedings.”); Daye Nonferrous Metals Co. v. Trafigura Beheer BV,
1997 WL 375680 (S.D.N.Y. 1997) (granting injunctive relief against
transfers of funds, in aid of arbitration in Paris);Alvenus Shipping v.
Delta Petroleum (U.S.A.), Ltd, 876 F.Supp. 482, 487 (S.D.N.Y.
1994) (granting preliminary injunctive relief in aid of arbitration in New
York Convention Contracting State); Compania de Navegacion y
Financiera Bosnia SA v. Nat'l Unity Marine Salvage Corp., 457
F.Supp. 1013, 1014 (S.D.N.Y. 1978); Atlas Chartering Services, Inc.
v. World Trade Group, Inc., 453 F.Supp. 861, 863 (S.D.N.Y. 1978);
Andros Compania Maritima SA v. Andre & Cie, SA, 430 F.Supp. 88
(S.D.N.Y. 1977). See also Tampimex Oil Ltd v. Latina Trading
Corp., 558 F.Supp. 1201 (S.D.N.Y. 1983) (granting provisional relief
without discussion).
440 Filanto SpA v. Chilewich Int'l Corp., 789 F.Supp. 1229
(S.D.N.Y. 1992), app. dismissed, 984 F.2d 58 (2d Cir. 1993).
441 See E.A.S.T. Inc. of Stamford, Conn. v. M/V Alaia, 876 F.2d
1168 (5th Cir. 1989); Jesk o v. United States, 713 F.2d 565 (10th
Cir. 1983); Castelan v. M/V Mercantil Parati, 1991 U.S. Dist. LEXIS
557
135
6472 (D.N.J. 1991); Atwood Nav., Inc. v. M/V Rizal, 1989 WL 16306
(E.D. Pa. 1989) (suggesting McCreary is inapplicable to maritime
attachment); Barclays Bank , SA v. Tsak os, 543 A.2d 802 (D.C. Cir.
1988); Constr. Exporting Enter. v. Nik k i Maritime, Ltd, 558 F.Supp.
1372 (S.D.N.Y. 1983) (relying on Supplemental Rule B(1) and
traditional maritime attachment); Atlas Chartering Services Inc. v.
World Trade Group, Inc., 453 F.Supp. 861, 863 (S.D.N.Y. 1978)
(same). See Higgins, Interim Measures in Transnational Maritime
Arbitration, 65 Tulane L. Rev. 1519 (1991). Some lower courts have
rejected this result. Metropolitan World Tank er Corp. v. P.N.
Pertambangan Minjak dangas Bumi Nasional, 427 F.Supp. 2
(S.D.N.Y. 1975).
One U.S. lower court has also (correctly) concluded that the
Convention does not restrict a court's power to recognize and
enforce tribunal-ordered provisional measures. Fiat S.p.A. v. Ministry
of Finance & Planning, 1989 U.S. Dist. LEXIS 11995 (S.D.N.Y.
1989).
442 Borden, Inc. v. Meiji Milk Prods. Co., 919 F.2d 822 (2d Cir.
1990) (“entertaining an application for a preliminary injunction in aid
of arbitration is consistent with the court's powers pursuant to §20”);
Rogers, Burgun, Shahine & Deschler, Inc. v. Dongsan Constr. Co.,
598 F.Supp. 754, 758 (S.D.N.Y. 1984) (“The fact that this dispute is
to be arbitrated does not deprive the Court of its authority to provide
provisional remedies”).
443 The New York Appellate Division has held that Cooper was not
applicable, and that an attachment in aid of arbitration could be
granted, where the party against whom the attachment was sought
was based in a nation that was not a signatory to the New York
Convention. Intermar Overseas, Inc. v. Argocean SA, 503 N.Y.S.2d
736 (N.Y. App. Div. 1986) (“[Cooper ] involved a dispute between
American and French parties, both of whose Nations were
signatories to the [New York] Convention. However, the countries in
which the parties to the agreements here in dispute reside and do
business are not signatories to the [New York] Convention. So far as
appears, there is nothing in the [New York] Convention which
precludes attachment, although it requires that Nations which are
signatories provide for enforcement of arbitration awards by the
respective countries. The rationale of Cooper is that the signatory
Nation will appropriately provide for security for such enforcement,
without prejudgment attachment. Whatever the effect of those
provisions, they cannot be binding in this case. If [the party seeking
attachment] is successful [on the merits], it will have to sue to
enforce the arbitration award in Argentina, a nonsignatory State.
Intermar will not have the benefit of the Convention's enforcement
provisions.”).
The reasoning in the foregoing excerpt is flawed, but its result is

sensible. The Convention's applicability does not depend on the
parties' nationality, but instead on the character of the parties'
arbitration agreement and the arbitral situs. See supra pp. 208-306,
1244-1245. Nonetheless, the Intermar court does suggest a relevant
558
136
consideration for the exercise of a court's discretion to grant pre-

award provisional measures – namely, to what extent does it appear
that the ultimate award will be difficult to enforce.
For other decisions holding that the McCreary/Cooper interpretation

of Article II(3) is not applicable outside the New York Convention
context, see MCT Shipping Corp. v. Sabet, 497 F.Supp. 1078, 1086
(S.D.N.Y. 1980); Coastal States Trading, Inc. v. Zenith Nav. SA,
446 F.Supp. 330, 341-42 (S.D.N.Y. 1977) (holding (wrongly) that
agreement had no “reasonable relation” to foreign state under FAA
§202, and therefore that Convention and Article II(3) did not apply).
444 See supra pp. 103-105.

445 See Committee on Arbitration and Alternative Dispute
Resolution, The Advisability and Availability of Provisional
Remedies in the Arbitration Process, 39 The Record of the
Association of the Bar of the City of New York 625 (1984); Becker,
Attachments and International Arbitration - An Addendum, 2 Arb.
Int'l 365 (1986).
446 N.Y. C.P.L.R. §7502(c).
447 ContiChem LPG v. Parsons Shipping Co., 229 F.3d 426 (2d
Cir. 2000) (N.Y. C.P.L.R. 7502(c) “applies only to domestic
arbitrations”).
448 Oehmke, Commercial Arbitration §39:13 (Update 2008) (“the
New York rule (providing for prearbitration attachment) is limited to
domestic arbitrations”). But seeCanWest Global Comm. Corp. v.
Mirk aei Tik shoret Ltd, 804 N.Y.S.2d 549 (N.Y. S. Ct. 2005) (“When,
as here, parties agree to permit application to a court for pre-
arbitration injunctive relief, it would be consistent with the letter and
spirit of Cooper and its progeny to enforce that agreement. …
Therefore there is no basis to preclude parties to an international
agreement from enforcing an agreement to seek the same remedies
that CPLR §7502(c) provides to domestic arbitrations”).
449 See, e.g., A. van den Berg, The New York Arbitration
Convention of 1958 139-40 (1981) (“There … seems to be no doubt
as to the possibility of a pre-award attachment, that is to say an
attachment before or during the arbitration, in order to secure the
subject matter in dispute or the payment under the award if rendered
in favor of the party who has applied for the attachment”); E. Gaillard
& J. Savage (eds.), Fouchard Gaillard Goldman on International
Commercial Arbitration ¶1307 (1999); Judgment of 12 May 1977,
Scherk Enter. AG v. Société des Grandes Marques, IV Y.B. Comm.
Arb. 286 (Italian Corte di Cassazione) (1979); The Rena K [1979]
Q.B. 377 (Q.B.).
450 Channel Tunnel Group Ltd v. Balfour Beatty Constr. Ltd [1993]
A.C. 334, 354 (House of Lords) (rejecting Cooper reading of Article
II(3)). Notably, Lord Mustill's analysis expressly left open the
possibility that, while Article V did not “necessarily” forbid court-
ordered applications for interim relief, it might nonetheless forbid
applications that did not “properly use []”concurrent judicial authority
to order provisional measures.
559
451 As noted above, both McCreary and Cooper involved arbitration

agreements which expressly incorporated the ICC Rules, which
specifically permit court-ordered provisional measures. See supra
pp. 1959, 2031-2034.
452 As discussed elsewhere, Article II requires Contracting States
to give effect to all material terms of an agreement to arbitrate. See
supra pp. 202-205, 567-568, 655-658, 1265-1270, 1351-1368, 1368-
1376, 1749-1751, 1765-1770, 1948-1949 & infra pp. 2444-2446,
2455-2456, 2553-2560. This would include an agreement authorizing
applications for court-ordered provisional measures in aid of the
arbitration.
453 On the contrary, at the time the Convention was drafted, many
states permitted court-ordered provisional measures and some
states only permitted court-ordered provisional measures. See supra
pp. 1949-1951.
454 See supra pp. 1943-1945, 1951-1952, 1953-1954. Other U.S.
authorities recognize this. See, e.g., Revised Uniform Arbitration
Act, §8, comment 5 (2000) (“The case law, commentators, rules of
arbitration organizations, and some state statutes are very clear that
arbitrators have broad authority to order provisional remedies and
interim relief, including interim awards, in order to make a fair
determination of an arbitral matter”);Ortho Pharm. Corp. v. Amgen,
Inc., 882 F.2d 806, 814 (3d Cir. 1989) (court-ordered provisional
measures necessary to “protect the integrity of the applicable
dispute resolution process”).
455 See supra pp. 1965-1971; China Nat'l Metal Prods. Imp./Exp.
Co. v. Apex Digital, Inc., 155 F.Supp.2d 1174 (C.D. Cal. 2001)
(reasoning that Article II(3) does not deprive a court of jurisdiction to
order provisional relief and such relief can, in fact, reinforce
arbitration agreements by securing assets while arbitration is
pending); see infra pp. 2037-2042.
456 That view is shared by the vast majority of commentators.
Seesupra p. 2037 n. 449.
457 Cooper, 442 N.E.2d at 1242 (“parties are free to include
security clauses (e.g., performance bonds or creating escrow
accounts) in their agreements to arbitrate.”).
458 See supra pp. 1972-1973, 2028 et seq.
459 See supra pp. 2034-2037.
460 See supra pp. 2037-2038.
461 See supra pp. 2031-2034.
462 See supra pp. 2031-2032.
463 As discussed below, most institutional arbitration rules permit
court-ordered provisional measures in aid of arbitration in a
substantial range of circumstances. See supra pp. 1958-1961.
Some institutional rules preclude or limit applications for provisional
measures in national courts in specified circumstances. See infra
pp. 2050-2053.
464 See supra pp. 1972-1973, 2031-2038 & infra pp. 2040, 2043-
2049, 2050-2051.
560
138
465 As discussed below, most national statutes provide that a

party's request for court-ordered provisional relief is not necessarily
contrary to, or a waiver of, the parties' arbitration agreement. See
infra pp. 2053-2055; UNCITRAL Model Law, Art. 9.
466 See infra p. 2049. Unless the arbitration agreement specifically
prohibits or restricts court-ordered provisional measures. See infra
pp. 2051-2053.
467 See, e.g., Partial Award in ICC Case No. 5896, 11(1) ICC Ct.
Bull. 37 (2000); Final Award in ICC Case No. 6998, XXI Y.B. Comm.
Arb. 54 (1996); China Nat'l Metal Prods. Imp./Exp. Co. v. Apex
Digital, Inc., 155 F.Supp.2d 1174, 1179 (C.D. Cal. 2001) (“complaint
… seeks to bypass the agreed upon method of settling disputes,
[which] is prohibited by the Convention if one party to the agreement
objects”).
468 See, e.g., J.J. Ryan & Sons, Inc. v. Rhone Poulenc Textile,
SA, 863 F.2d 315, 320-21 (4th Cir. 1988) (when charges inherently
inseparable, court may refer claims against non-signatory parent to
arbitration); Sam Reisfeld & Son Imp. Com. v. SA Eteco, 530 F.2d
679 (5th Cir. 1976) (“If the parent corporation was forced to try the
case, the arbitration proceedings would be rendered meaningless
and the federal policy in favour of arbitration effectively thwarted”);
McBro Planning & Dev. Co. v. Triangle Elec. Constr. Co., 741 F.2d
342 (llth Cir. 1984) (same result reached under theory of equitable
estoppel).
469 See supra pp. 1946-1949.
470 ICSID Convention, Art. 26.
471 C. Schreuer, The ICSID Convention: A Commentary, Art. 26,
¶¶, 72, 84 (2001) (noting split in authority). See alsoHoliday Inns
SA/Occidental Petroleum Corp. v. Morocco, ICSID Award No.
ARB/72/1 (1 July 1973), commented on in Lalive, The First ‘World
Bank ’ Arbitration (Holiday Inns v. Morocco); Lalive, The First “World
Bank ” Arbitration (Holiday Inns v. Morocco) – Some Legal
Problems, 51 Brit. Y.B. Int'l L. 123 (1980); Friedland, Provisional
Measures and ICSID Arbitration, 2 Arb. Int'l 335 (1986); Brower &
Goodman, Provisional Measures and the Protection of ICSID
Jurisdictional Exclusivity Against Municipal Proceedings, 6 ICSID
Rev.-For. Inv. L.J. 431 (1991).
472 Judgment of 27 September 1985, Guinea v. Maritime Int'l
Nominees Establishment, 25 Int'l Legal Mat. 1639 (Antwerp
Rechtbank) (1985) (Article 26 of ICSID Convention precludes court-
ordered provisional measures); Judgment of 26 October 1984,
République Populaire Révolutionnaire de Guinée v. Atlantic Triton, XI
Y.B. Comm. Arb. 215 (Rennes Cour d'appel)(1986) (same, but
reversed on appeal). CompareJudgment of 18 November 1986,
Société Atlantic Triton v. République populaire révolutionnaire de
Guinée et société Soguipêche, 1987 Rev. arb. 315 (French Cour de
cassation civ. 1e) (Article 26 of ICSID Convention does not preclude
court-ordered provisional measures).
473 ICSID Arbitration Rules, Rule 39(6) (“Nothing in this Rule shall
prevent the parties, provided that they have so stipulated in the
agreement recording their consent, from requesting any judicial or
561
139
other authority to order provisional measures, prior to or after the

institution of the proceeding, for the preservation of their respective
rights and interests.”).
474 Seesupra pp. 1949-1951 (Italy, Argentina, China). As
discussed above, such legislation is likely contrary to the New York
Convention in many instances. See supra pp. 1948-1949, 1963-
1964.
475 See supra pp. 1972-1973 & infra pp. 2049, 2050-2051.
476 UNCITRAL Model Law, Arts. 9, 17. See H. Holtzmann & J.
Neuhaus, A Guide to the UNCITRAL Model Law on International
Commercial Arbitration: Legislative History and Commentary 332-
333 (1989).
477 SeeSilver Standard Resources Inc. v. JSC Geolog, 168 D.L.R.
(4th) 309 (B.C. S.Ct. 1998) (upholding judicial freezing order in aid of
arbitration under Article 9 of Model Law); TLC Multimedia Inc. v.
Core Curriculum Tech., Inc., [1998] B.C.J. No. 1656 (B.C. S.Ct.)
(court has broad discretion to award interim relief in aid of arbitration
under Article 9 of Model Law); Trade Fortune Inc. v. Amalgamated
Mill Supplies Ltd, 113 D.L.R.4th 116 (B.C. S.Ct. 1994).
478 UNCITRAL Model Law, 2006 Revisions, Art. 17J (“A court shall
have the same power of issuing an interim measure in relation to
arbitration proceedings, irrespective of whether their place is in the
territory of this State, as it has in relation to proceedings in courts.
The court shall exercise such power in accordance with its own
procedures in consideration of the specific features of international
arbitration.”).
479 Swiss Law on Private International Law, Arts. 183, 185. See
Berti, in S. Berti et al. (eds.), International Arbitration in Switzerland
Art. 183, ¶5 (2000); S. Besson, Arbitrage international et mesures
provisoires 192 (1998); G. Walter, W. Bosch & J. Brönnimann,
Internationale Schiedsgerichtsbark eit in der Schweiz 144 (1991).
480 Belgian Judicial Code, Arts. 1679(2), 1696(1) (“Without
prejudice to Article 1679(2) [providing for court-ordered provisional
measures], the arbitral tribunal may, at the request of a party, order
provisional measures or protective measures…”).
481 Netherlands Code of Civil Procedure, Art. 1022(2) (“An
arbitration agreement shall not preclude a party from requesting a
court to grant interim measures of protection or from applying to the
President of the District Court for a decision in summary
proceedings.”).
482 German ZPO, §1041 (“(1) Unless otherwise agreed by the
parties, the arbitral tribunal may, at the request of a party, order
such interim measures of protection as the arbitral tribunal may
consider necessary in respect of the subject-matter of the dispute.
The arbitral tribunal may require any party to provide appropriate
security in connection with such measure. (2) The court may, at the
request of a party, permit enforcement of a measure referred to in
subsection 1, unless application for a corresponding interim
measure has already been made to a court. It may recast such an
order if necessary for the purpose of enforcing the measure. (3) The
court may, upon request, repeal or amend the decision referred to in
562
140
subsection 2. (4) If a measure ordered under subsection 1 proves to

have been unjustified from the outset, the party who obtained its
enforcement is obliged to compensate the other party for damage
resulting from the enforcement of such measure or from his providing
security in order to avoid enforcement. This claim may be put
forward in the pending arbitral proceedings.”). See J.-P. Lachmann,
Handbuch für die Schiedsgerichtspraxis ¶¶2852 et seq. (3d ed.
2008); Geimer, in R. Zöller (ed.), Zivilprozessordnung §1041, ¶¶1 et
seq. (26th ed. 2007); K.-H. Schwab & G. Walter,
Schiedsgerichtsbark eit Ch. 17a, ¶¶1 et seq. (7th ed. 2005);
Schlosser, in F. Stein & M. Jonas (eds.), Kommentar zur
Zivilprozessordnung §1041, ¶¶1 et seq. (22nd ed. 2002).
483 English Arbitration Act, 1996, §44. See alsoMarazura Nav. SA
v. Oceanus Mut. Underwriting Ass'n (Bermuda) Ltd [1977] 1 Lloyd's
Rep. 283 (Q.B.) (seeking security for claims through litigation in
foreign court does not necessarily violate arbitration agreement).
484 Japanese Arbitration Law, Art. 15.
485 Indian Arbitration and Conciliation Act, Art. 9.
486 See, e.g., New Zealand Arbitration Act, First Schedule, Art. 9;
Canadian Commercial Arbitration Act, Art. 9; British Columbia
International Commercial Arbitration Act, §9.
487 Sundaram Fin. Ltd v. NEPC India Ltd, XXIV Y.B. Comm. Arb.
309 (Indian S.Ct. 1999) (1999) (interim relief in aid of arbitration
available).
488 See supra pp. 2031-2034, 2040-2042; McCreary Tire & Rubber
Co. v. CEAT SpA, 501 F.2d 1032 (3d Cir. 1974) (Convention
precludes court-ordered provisional measures that “bypass”
arbitration agreement); Channel Tunnel Group Ltd v. Balfour Beatty
Constr. Ltd [1993] A.C. 334, 354 (House of Lords) (Convention may
preclude applications for provisional measures that do not “properly
use” concurrent judicial authority).
489 See Relais Nordik Inc. v. Secunda Marine Sers. Ltd, 24 F.T.R.
256 (Fed. Ct. of Canada 1988); Channel Tunnel Group Ltd v. Balfour
Beatty Constr. Ltd [1993] A.C. 334, 358 (House of Lords); ICC
Interim Award in ICC Case No. 10973, XXX Y.B. Comm. Arb. 83
(2005); Judgment of 29 November 1991, 1992 NJW-RR 640
(Oberlandesgericht Hamm); Worldsource Coil Coating, Inc. v.
McGraw Const. Co., Inc., 946 F.2d 473 (6th Cir. 1991) (complainant
waived right to compel arbitration, as damages request went beyond
interim relief within meaning of ICC Rules and raised arbitral issues);
Shainin II, LLC v. Allen, 2006 WL 2473495 (W.D. Wash. 2006).
490 Leviathan Shipping Co. Ltd v. Sk y Sailing Overseas Co., Ltd
[1998] 4 HKC 347 (H.K. Court of First Instance, High Court). See
alsoMerrill Lynch v. Salvano, 999 F.2d 211 (7th Cir. 1993) (issuing
provisional measures “only until the arbitration panel is able to
address whether the [relief] should remain in effect. Once
assembled, an arbitration panel can enter whatever temporary
injunctive relief it deems necessary to maintain the status quo”).
491 For commentary, see Karmel, Injunctions Pending Arbitration
and the Federal Arbitration Act: A Perspective From Contract Law,
54 U. Chi. L. Rev. 1373 (1987); Fiotte, The United States Arbitration
563
141
Act and Preliminary Injunctions: A New Interpretation of An Old

Statute, 66 B.U. L. Rev. 1041 (1986); Pike, The Federal Arbitration
Act: A Threat to Injunctive Relief, 21 Willamette L. Rev. 674 (1985);
Note, Availability of Provisional Remedies in Arbitration
Proceedings, 17 N.Y.U.L.Q. Rev. 638 (1940).
492 U.S. FAA, 9 U.S.C. §8. State law in some U.S. states purports
to go further than the FAA and expressly grant authority to local
courts to issue provisional measures in connection with an
international arbitration. See Revised Uniform Arbitration Act, §8(a)
(2000) (“Before an arbitrator is appointed and is authorized and able
to act, the court, upon [motion] of a party to an arbitration
proceeding and for good cause shown, may enter an order for
provisional remedies to protect the effectiveness of the arbitration
proceedings to the same extent and under the same conditions as if
the controversy were the subject of a civil action.”), §8(b) (“After an
arbitrator is appointed and is authorized and able to act: … (2) a
party to an arbitration proceeding may move the court for a
provisional remedy only if the matter is urgent and the arbitrator is
not able to act timely or the arbitrator cannot provide an adequate
remedy.”); N.Y. C.P.L.R. §7502(c); Ohio Rev. Code Ann. §2712.36.
493 See supra pp. 2031-2034.
494 See, e.g., Credit Suisse Securities (USA) LLC v. Ebling, 2006
WL 3457693, at *3 (S.D.N.Y. 2006); Discount Trophy & Co. v.
Plastic Dress-Up Co., 2004 WL 350477, at *8 (D. Conn. 2004);
American Express Fin. Advisors v. Thorley, 147 F.3d 229 (2d Cir.
1998); Peabody Coalsales Co. v. Tampa Elec. Co., 36 F.3d 46 (8th
Cir. 1994); Blumenthal v. Merrill Lynch, Pierce, Fenner & Smith,
Inc., 910 F.2d 1049, 1052-54 (2d Cir. 1990); Ortho Pharm. Corp. v.
Amgen, Inc., 882 F.2d 806, 812 (3d Cir. 1989); Transportes Caribe,
SA v. M/V Feder Trader, 860 F.2d 637, 638 (5th Cir. 1988); PMS
Dist. Co. v. Huber & Suhner AG, 854 F.2d 355 (9th Cir. 1988);
Merrill Lynch, Pierce, Fenner & Smith v. Dutton, 844 F.2d 726, 727-
28 (10th Cir. 1988); Teradyne, Inc. v. Mostek Corp., 797 F.2d 43, 51
(1st Cir. 1986) (“district court can grant injunctive relief in an
arbitrable dispute pending arbitration”); Merrill Lynch, Pierce, Fenner
& Smith, Inc. v. Bradley, 756 F.2d 1048, 1051-54 (4th Cir. 1985);
Rose-Lino Bev. Distrib. v. Coca-Cola Bottling Co., 749 F.2d 124,
125 (2d Cir. 1984) (“fact that a dispute is to be arbitrated … does not
absolve the court of its obligation to consider the merits of a
requested preliminary injunction”); Guinness-Harp Corp. v. Jos.
Schlitz Brewing Co., 613 F.2d 468 (2d Cir. 1980); Discount Trophy &
Co. v. Plastic Dress-Up Co., 2004 WL 350477, at *8 (D. Conn.
2004) (“Even though this case will be stayed pending the parties'
arbitration, the Second Circuit has made it clear in a series of
decisions that the Court has both the power and duty to entertain a
motion for a preliminary injunction pending the results in the
arbitration. And this is true even though, as is the case here, the
parties are entitled under the rules of the arbitral tribunal they have
chosen to seek pendente lite relief directly from the arbitrator.”);
Organizing Comm. for the 1998 Goodwill Games, Inc. v. Goodwill
Games, Inc., 919 F.Supp. 21 (D.D.C. 1995); Bosworth v.
Ehrenreich, 823 F.Supp. 1175 (D.N.J. 1993); Merrill Lynch, Pierce,
Fenner & Smith, Inc. v. Kramer, 816 F.Supp. 1242 (N.D. Ohio
564
142
1992); Rogers, Burgun, Shahine & Deschler, Inc. v. Dongsan

Constr. Co., 598 F.Supp. 754 (S.D.N.Y. 1984) (“The fact that this
dispute is to be arbitrated does not deprive the Court of its authority
to provide provisional remedies”); Erving v. Virginia Squires
Bask etball Club, 349 F.Supp. 716, 719-29 (E.D.N.Y.), aff'd, 468
F.2d 1064, 1067 (2d Cir. 1972); Bancamerica Comm. Corp. v.
Brown, 806 P.2d 897 (Ariz. Ct. App. 1990) (attachment); Lambert v.
Superior Court, 279 Cal.Rptr. 32 (Cal. 1991) (mechanic's lien);
Hughley v. Rock y Mountain Health Maintenance Org. Inc., 927 P.2d
1325 (Colo. 1996) (order to maintain status quo). See also Boys
Mark ets, Inc. v. Retail Clerk s Union, Local 770 398 U.S. 235 (U.S.
S.Ct. 1970).
495 See, e.g., Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Hovey,
726 F.2d 1286 (8th Cir. 1984) (holding that, absent agreement
permitting court-ordered provisional measures, “unmistakably clear
congressional purpose” was to bar such); Jab Indus., Inc. v. Silex
SpA, 601 F.Supp. 971, 979 (S.D.N.Y. 1985); Merrill Lynch, Pierce,
Fenner & Smith Inc. v. DeCaro, 577 F.Supp. 616, 625 (W.D. Mo.
1983); Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Thomson, 574
F.Supp. 1472, 1478-79 (E.D. Mo. 1983); Merrill Lynch, Pierce,
Fenner & Smith Inc. v. McCollum, 666 S.W.2d 604 (Tex. Ct. App.
1984). Cf.ContiChem LPG v. Parsons Shipping Co., 229 F.3d 426,
430 (2d Cir. 2000) (“because ContiChem did not have a judgment
against Parsons, the court had no equitable power to issue a
preliminary injunction preventing any entity from disposing of
Parsons' assets pending arbitration of the dispute”).
496 Albatross S.S. Co. v. Manning Bros., 95 F.Supp. 459, 463
(S.D.N.Y. 1951).
497 See, e.g., Judgment of 27 October 1995, 1996 Rev. arb. 274
(Paris Cour d'appel); Couchez, Référé et arbitrage (Essai de bilan…
provisoire), 1986 Rev. arb. 155; E. Gaillard & J. Savage (eds.),
Fouchard Gaillard Goldman on International Commercial Arbitration
¶¶1306-09, 1332 (1999); J.-F. Poudret & S. Besson, Comparative
Law of International Arbitration ¶611 (2nd ed. 2007).
498 Judgment of 8 October 1998, Société Ak zo Nobel et autres v.
SA Elf Atochem, 1999 Rev. arb. 56, 57 (Versailles Cour d'appel)
(emphasis added).
Law ¶¶14.46 to 14.64 (2004 & Update 2007); U.K. Departmental
Advisory Committee on Arbitration Law, 1996, Report on the
Arbitration Bill(February 1996), reprinted in, 13 Arb. Int'l 275, ¶¶214-
16.
500 Ohio Rev. Code, Ann. §2712.36. See also Revised Uniform
Arbitration Act, §8(b) (2000) (“After an arbitrator is appointed and is
authorized and able to act: … (2) a party to an arbitration proceeding
may move the court for a provisional remedy only if the matter is
urgent and the arbitrator is not able to act timely or the arbitrator
cannot provide an adequate remedy.”).
Similarly, some parties have argued under the FAA that court-
ordered provisional measures “should issue only after the movant
has proved that the arbitrators are unable to provide the requested
565
143
relief in a timely fashion.” Blumenthal v. Merrill Lynch, Pierce,

Fenner & Smith, Inc., 910 F.2d 1049, 1054 (2d Cir. 1990). Courts
have not necessarily accepted those efforts. Id.
501 As amended, §7502(c) permits attachments in aid of arbitration

if the ultimate arbitral award “may be rendered ineffectual without
such provisional relief.”
Importantly, the substantive requirements of chapter 62 of the New

York Civil Practice Law, which ordinarily defines the availability of an
attachment, need not be satisfied in order to obtain relief under
§7502(c). Nat'l Telecomm. Ass'n, Ltd v. Nat'l Comm. Ass'n, Inc.,
592 N.Y.S.2d 591 (N.Y. App. Div. 1993). Under N.Y. C.P.L.R.
§6201, an attachment is available if one of the following four grounds
is satisfied: (a) the defendant is a foreign corporation not qualified to
do business in New York; (b) the defendant cannot, despite diligent
efforts, be personally served with process; (c) the defendant, with
the intent to frustrate the award, has disposed of or removed his
property from the state; or (d) the action is to enforce another court's
judgment. In addition, the plaintiff must show that it has a cause of
action, on which it will probably succeed, and that the amount
sought exceeds all known counterclaims. Even if these
requirements are satisfied, attachment is a discretionary remedy
and may be denied. Merrill Lynch Futures, Inc. v. Kelly, 585 F.Supp.
1245 (S.D.N.Y. 1984). Section 7502(c) relaxes these requirements,
permitting an attachment based solely on a showing that the arbitral
award “may be rendered ineffectual without such provisional relief.”
N.Y. C.P.L.R. §7502, 1985 Supplementary Practice Commentary
(McKinney 1986 Supp.).
For decisions granting relief under §7502, see Habitations Ltd, Inc.
v. BKL Realty Sales Corp., 554 N.Y.S.2d 117 (N.Y. App. Div. 1990)
(considering only §7502(c) requirements); Saferstein v. Wendy, 523
N.Y.S.2d 725 (Sup. Ct. 1987) (granting injunction, but holding that
§7502(c) “was not designed to make the court a simple rubber
stamp,”and applying traditional equitable principles).
502 UNCITRAL Model Law, 2006 Revisions, Art. 17J.

503 Ibid.
504 See supra pp. 74-76, 1020-1024.
505 Revised Uniform Arbitration Act, §8, comment 2 (2000)
(“interim judicial remedies … can preempt the arbitrator's authority
to decide a case and cause delay, cost, complexity and formality
through intervening litigation process, but without such protection an
arbitrator's award may be useless”).
As already discussed, provisional measures are often needed at the

outset of the parties' dispute. Ordinarily, however, no arbitral tribunal
will be in place and functioning at the beginning of a dispute; even
after the request for arbitration has been filed, the process of
selecting and confirming the arbitrators can take several weeks or
566
months. See supra pp. 1970-1971.
506 Note that, by analogy, forum selection clauses are generally

not interpreted as precluding courts other than the contractually-
selected forum from granting interim relief. Hague Convention of 30
June 2005 on Choice of Court Agreements, Art. 7, available at
www.hcch.net (“Interim measures of protection are not governed by
this Convention. This Convention neither requires nor precludes the
grant, refusal or termination of interim measures of protection by a
court of a Contracting State and does not affect whether or not a
party may request or a court should grant, refuse or terminate such
measures.”).
507 See supra pp. 1965-1968.
Law ¶¶14.46 to 14.64 (2004 & Update 2007); D. Sutton, J. Gill & M.
Gearing, Russell on Arbitration ¶¶7-129 et seq. (22d ed. 2003).
509 See Revised Uniform Arbitration Act, §8(b) (2000) (“After an
remedy”); Ohio Rev. Code, Ann. §2712.36. See alsoLeviathan
Shipping Co. Ltd v. Sk y Sailing Overseas Co. Ltd, [1998] 4 HKC
347 (H.K. Court of First Instance, High Court).
510 The UNCITRAL Rules are an exception, not addressing the
subject.
511 ICC Rules, Art. 23(2) (emphasis added). See Schwartz, The
and Provisional Measures in International Arbitration 45 (1993); Y.
Derains & E. Schwartz, A Guide to the ICC Rules of Arbitration 299-
302 (2d ed. 2005).
512 LCIA Rules, Art. 25(3) (emphasis added).
513 See supra pp. 1972-1973, 2050-2051.
514 A. Redfern & M. Hunter (eds.), Law and Practice of
International Commercial Arbitration ¶7-21 (4th ed. 2004) (“it is
appropriate to apply first to [the arbitral] tribunal for interim
measures, unless the measures sought are ones that the tribunal
itself does not have the power to grant”).
515 See supra pp. 2031-2034.
516 See supra pp. 2038-2042.
517 See supra pp. 1972-1973, 2050-2051.
518 See, e.g., UNCITRAL Model Law, Art. 9; German ZPO, §1041;
Netherlands Code of Civil Procedure, Art. 1022(2).
519 See, e.g., Judgment of 18 November 1986, Société Atlantic
Triton v. République populaire révolutionnaire de Guinée et société
Soguipêche, 1987 Rev. arb. 315 (French Cour de cassation civ. 1e);
Mantovani v. Caparelli SpA [1980] 1 Lloyd's Rep. 375 (English Court
of Appeal) (court-ordered provisional measures excluded by clause
providing that neither party “shall bring any action or other legal
567
proceeding against the other of them in respect of any such dispute

until such dispute shall first have been heard and determined by the
arbitrators”).
International Arbitration 45 (1993); Mills, State International
Arbitration Statutes and the U.S. Arbitration Act: Unifying the
Availability of Interim Relief, 13 Ford. Int'l L.J. 604 (1989-1990); E.
Gaillard & J. Savage (eds.), Fouchard Gaillard Goldman on
International Commercial Arbitration ¶1319 (1999) (“the principle of
concurrent jurisdiction is not a matter of public policy. … it is
generally accepted that the parties can agree not to apply to the
courts for provisional or protective measures during the course of the
arbitration”); G. Walter, W. Bosch & J. Brönnimann, Internationale
Schiedsgerichtsbark eit in der Schweiz 146 (1991).
521 Anaconda v. American Sugar Refining Co., 322 U.S. 42 (U.S.
S.Ct. 1944) (agreement excluding court-ordered maritime
attachment under §8 of FAA is not enforceable).
522 Hausmaninger, The ICC Rules for A Pre-Arbitral Referee
Procedure: A Step Towards Solving the Problem of Provisional
Relief in International Commercial Arbitration, 7 ICSID Rev.-For. Inv.
L.J. 82 (1992) (“Although most legal systems permit individuals to
contractually waive judicial protection, they usually allow such
waiver only if an adequate substitute is available. [A]rbitrators are an
inadequate substitute when it comes to issuing certain important
provisional measures”).
523 See supra pp. 1972-1973, 2049, 2050-2051. Indeed, as
discussed below, national arbitration legislation often provides
expressly that seeking court-ordered provisional measures is not a
waiver of rights to arbitrate (further confirming the principle of
concurrent jurisdiction). See infra pp. 2053-2055. The same general
approach applies with regard to forum selection clauses, where an
exclusive forum selection clause is not generally interpreted to
exclude recourse to other jurisdictions for provisional measures. See
supra pp. 67, 1024.
524 See, e.g., Blumenthal v. Merrill Lynch, Pierce, Fenner & Smith,
Inc., 910 F.2d 1049, 1052-53 (2d Cir. 1990) (rejecting argument that
“district court injunctions pending arbitration are available only when
the contract expressly so provides”); Ortho Pharm. Corp. v. Amgen,
Inc., 882 F.2d 806, 812 (3d Cir. 1989) (“an arbitration agreement
reflects the parties' intention to adhere to an orderly process of
alternative dispute resolution [and] we do not construe such an
agreement as constituting a ‘waiver’ by either party of the right to
seek preliminary injunctive relief necessary to prevent one party from
unilaterally eviscerating the significance of the agreed-upon
procedures”); Roso-Lino Beverage Dist., Inc. v. Coca-Cola Bottling
Co., 749 F.2d 124, 125 (2d Cir. 1984); Re Q's Estate [1999] 1
Lloyd's Rep. 931, 935 (Q.B.) (agreement to arbitrate, to the
exclusion of court proceedings, does not waive right to seek court-
ordered provisional relief).
525 See, e.g., Judgment of 20 December 1982, 1986 Rev. arb. 233
(French Cour de cassation civ. 3e) (agreement to arbitrate does not
568
146
preclude application for court-ordered statutory investigation under

Article 145 of New Civil Procedure Code); Judgment of 22 April
1985, XII Y.B. Comm. Arb. 494 (Verona Tribunale di I grado) (1987);
Judgment of 7 August 1992, XIX Y.B. Comm. Arb. 680 (Italian Corte
di Cassazione) (1994). See also Wessel & North Cohen, In Tune
With Mantovani: The ‘Novel’ Case of Damages for Breach of An
Arbitration Agreement, 2001 Int'l Arb. L. Rev. 65, 68.
526 Even where parties enter into such an (express) agreement,
questions as to enforceability would arise.
527 See supra pp. 1972-1973, 2049-2051.
528 UNCITRAL Model Law, Arts. 9, 17; UNCITRAL Model Law,
2006 Revisions, Arts. 9, 17J. See H. Holtzmann & J. Neuhaus, A
Guide to the UNCITRAL Model Law on International Commercial
Arbitration: Legislative History and Commentary 332-333 (1989); G.
Petrochilos, Procedural Law in International Arbitration 101 (2004)
(“the general rule that by agreeing to arbitrate the parties do not
waive any right they may have to resort to a court with jurisdiction to
order such relief (or to enforce an order by the arbitral tribunal)”);
Caron, Interim Measures of Protection: Theory and Practice in Light
of the Iran-United States Claims Tribunal, 46 Zeitschrift für
ausländisches öffentliches Recht und Völkerrecht 465, 507 (1986)
(“a party does not lose the right to demand arbitration and does not
become subject to suit for breach of its agreement to arbitrate” by
seeking provisional measures from a court). See also supra pp.
1952-1954.
529 See, e.g., Netherlands Code of Civil Procedure, Art. 1022(2);
German ZPO, §1033; Austrian ZPO, §593(1); Swedish Arbitration
Act, §25; Japanese Arbitration Law, Art. 14.
530 In general, U.S. courts have not construed requests for court-
ordered provisional measures as waivers of a right to arbitrate. See,
e.g., Valero Refining, Inc. v. M/T Lauberhorn, 813 F.2d 60, 65-66
(5th Cir. 1987) (party “sought judicial assistance to further the
arbitration process when [adverse party] refused to name an
arbitrator”); Sauer-Getriebe KG v. White Hydraulics, Inc., 715 F.2d
348, 349-50 (7th Cir. 1983); Rogers, Burgun, Shahine & Deschler,
Inc. v. Dongsan Constr. Co., 598 F.Supp. 754, 757-58 (S.D.N.Y.
1984); United Nuclear Corp. v. Gen. Atomic Corp., 597 P.2d 290
(N.M. 1979).
Courts in other jurisdictions reach the same results. See, e.g.,

Judgment of 25 October 2006, 2007 Rev. arb. 343 (Paris Cour
d'appel); Judgment of 7 March 2002, 2002 Rev. arb. 214 (French
Cour de cassation civ. 2e); Judgment of 7 June 2001, SA
Hellafranca v. SA Natalys, 2001 Rev. arb. 605, 616 (Paris Cour
d'appel); Judgment of 7 July 1994, Uzinexport-Import Romanian Co.
v. Attock Cement Co., 1995 Rev. arb. 107 (Paris Cour d'appel);
Judgment of 8 October 2002, XXXII Y.B. Comm. Arb. 555 (Spanish
Tribunal Supremo) (2007) (“We cannot deem that a request to the
Spanish courts to grant interim protective measures implies a tacit
submission to those courts and consequently a waiver of the referral
to arbitration”); BhatiaInt'l v. Bulk Trading SA, [2002] 1 LRI 703
(Indian Court of Appeal 2002) (giving effect to ICC Rules, Art. 23).
569
See also Van Uden Maritime BV v. Kommanditgesellschaft in Firma

Deco-Line, C-391/95 [1998] E.C.R. I-7091, 7133 (E.C.J.) (“An
arbitration agreement shall not preclude a party from applying to the
ordinary courts for a protective measure or from making an
application to the President of the court for interim relief …”).
The English Arbitration Act, 1996, §44 gives the court power to
intervene only where the tribunal gives permission (§44(4)) or the
tribunal does not have the power or is unable to act effectively
(§44(5)). Only under §44(3), and in urgent cases does a court have
the power to act independently and this would not waive the right to
arbitrate, see Cetelem SA v. Roust Holdings Ltd [2004] EWHC 3175
(Q.B.) (defendant ordered to fulfil contractual obligation to supply
documents to a third party where arbitration had not commenced);
Judgment of 11 March 2002, 33 O 4352/03 reported at www.dis-
arb.de (Landesgericht Munich).
531 See European Convention, Art. VI(4) (“[a] request for interim
measures or measures of conservation addressed to a judicial
authority shall not be deemed incompatible with the arbitration
agreement, or regarded as a submission of the substance of the
case to the court”). See supra pp. 1946-1947, 1972-1973.
532 See infra pp. 2064-2065; UNCITRAL Rules, Art. 26(3); LCIA
Rules, Art. 25(3); ICC Rules, Art. 23(2); AAA Commercial Rules, R-
34(c).
533 This is arguably evidenced by the text of the Model Law: “It is
not incompatible with an arbitration agreement for a party to request
… from a court an interim measure of protection.” UNCITRAL Model
Law, Art. 9.
534 See supra pp. 2031-2042, discussing New York Convention, &
supra pp. 744, 2053-2055, discussing principles of waiver.
535 Swiss Law on Private International Law, Art. 183(2). See Berti,
in S. Berti et al. (eds.), International Arbitration in Switzerland Art.
183, ¶18 (2000).
536 UNCITRAL Model Law, 2006 Revisions, Art. 17J. See also
English Arbitration Act, 1996, §44.
537 See, e.g., Commerce and Indus. Ins. Co. of Canada v. Certain
Underwriters at Lloyd's of London [2002] 1 WLR 1323 (Q.B.)
(request for interim relief in aid of foreign arbitration is inappropriate
where it seeks a form of relief not contemplated by English law);
Judgment of 28 June 1989, Eurodif v. Islamic Republic of Iran, 1989
Rev. arb. 653 (French Cour de cassation civ. 1e); Judgment of 27
October 1995, 1996 Rev. arb. 274 (Paris Cour d'appel); Judgment of
20 January 1988, 1990 Rev. arb. 651 (Paris Cour d'appel); Judgment
of 8 October 1998, Société Ak zo Nobel et autres v. SA Elf
Atochem, 1999 Rev. arb. 56 (Versailles Cour d'appel); B. Berger &
F. Kellerhals, Internationale und interne Schiedsgerichtsbark eit in
der Schweiz ¶1163, 1175 (2006); Puerto Rico Hosp. Supply, Inc. v.
Boston Scientific Corp., 426 F.3d 503, 507 (1st Cir. 2005) (“district
court properly applied federal law [to injunction], leaving for the
arbitrator the choice-of-law determination”); S. Besson, Arbitrage
570
148
international et mesures provisoires ¶¶466, 471 (1998); Wirth,

Arbitration in Switzerland, 18 ASA Bull. 31, 40 (2000); Kröll,
Germany 35, in J. Paulsson (ed.), International Handbook on
Commercial Arbitration (Update 2007). See also Bond, The Nature
of Conservatory and Provisional Measures, in ICC, Conservatory and
Provisional Measures in International Arbitration 8 (1993).
538 For example, many U.S. courts apply generally-applicable
standards for granting provisional relief in federal courts. See, e.g.,
Teradyne, Inc. v. Mostek Corp., 797 F.2d 43, 51 (1st Cir. 1986);
Roso-Lino Beverage Dist., Inc. v. Coca-Cola Bottling Co., 749 F.2d
124 (2d Cir. 1984); Sauer-Getriebe KG v. White Hydraulics, Inc.,
715 F.2d 348 (7th Cir. 1983); Merrill Lynch, Pierce, Fenner & Smith,
Inc. v. Kramer, 816 F.Supp. 1242 (N.D. Ohio 1992) (granting
preliminary injunction forbidding disclosure of trade secrets and
solicitation of clients). Compare authorities cited infra p. 2056 n.
541.
539 Cf. UNCITRAL Model Law, 2006 Revisions, Art. 17J, second
sentence.
540 See, e.g., Merrill Lynch, Pierce, Fenner & Smith, Inc. v.
Bradley, 756 F.2d 1048, 1053 (4th Cir. 1985) (“where a dispute is
subject to mandatory arbitration under the Federal Arbitration Act, a
district court has the discretion to grant a preliminary injunction to
preserve the status quo pending the arbitration of the parties' dispute
if the enjoined conduct would render that process a ‘hollow
formality.’”); Revised Uniform Arbitration Act, §8(b) (2000) (“After an
remedy”).
541 See, e.g., Specialty Bak eries, Inc. v. HalRob, Inc., 129 F.3d
726, 727 (3d Cir. 1997) (“courts invoke the phrase ‘preservation of
the status quo’ as a summary explanation of the need to protect the
integrity of the applicable dispute resolution process”); Ortho Pharm.
Corp. v. Amgen, Inc., 882 F.2d 806, 813-14 (3d Cir. 1989) (in
applying traditional equitable standards, “the district court must
focus on preservation of the integrity of the arbitration process”);
Connecticut Resources Recovery Auth. v. Occidental Petroleum
Corp., 705 F.2d 31, 33-35 (2d Cir. 1983); Guinness-Harp Corp. v.
Jos. Schlitz Brewing Co., 613 F.2d 468 (2d Cir. 1980) (federal court
“is empowered to grant specific performance of the agreement to
arbitrate”); Erving v. Virginia Squires Bask etball Club, 468 F.2d
1064 (2d Cir. 1972).
As noted above, other U.S. courts have held that ordinary standards
governing the grant of preliminary injunctive relief are applicable. See
supra pp. 2045-2048, 2056 n. 538.
542 Leviathan Shipping Co. Ltd v. Sk y Sailing Overseas Co. Ltd,

[1998] HKC 347 (H.K. Court of First Instance, High Court).
571
543 At most, Article II(1) and II(3) of the New York Convention might
be interpreted as giving effect to an agreement, contained within an
arbitration clause, selecting a court for seeking provisional relief; in
fact, however, an agreement on a contractual judicial forum for
actions in aid of arbitration probably falls outside the scope of
Articles II(1) and II(3), which are probably best understood as
addressed to the material terms of arbitration agreements (not other
provisions of the parties' contract). See supra pp. 202-205, 567-568,
655-658, 1262-1270, 1368-1376, 1444-1446, 1450, 1765-1770, 1948-
1949 & infra pp. 2444-2446, 2455-2456.
544 The choice-of-forum clause will be interpreted and enforced in
accordance with generally-applicable private international law rules
in the forum. See generally G. Born & P. Rutledge, International Civil
Litigation in United States Courts 435-59 (4th ed. 2007); W. Park,
International Forum Selection 17-51 (1995); supra pp. 67-68, 76-78.
545 For example, if a party suspects that it counter-party is about
to dissipate funds, transfer the subject matter of the dispute or
destroy essential evidence, an application for court-ordered
provisional measures in the place where such dissipation, transfer or
destruction would occur may be the most (and only) effective means
of obtaining relief.
546 See, e.g., Toepfer Int'l GmbH v. Societe Cargill France [1998]
1 Lloyd's Rep. 379 (English Court of Appeal) (exclusive jurisdiction
clause interpreted as inapplicable to interim relief in aid of
arbitration); Judgment of 29 June 2000, 2000 Dalloz 1390
(Versailles Cour d'appel) (exclusive jurisdiction clause for judicial
assistance in aid of arbitration interpreted as inapplicable to interim
relief in aid of arbitration); Bhatia Int'l v. Bulk Trading SA, XXVII Y.B.
Comm. Arb. 234, 247-248 (Indian S.Ct. 2002) (2002).
547 See UNCITRAL Model Law, 2006 Revisions, Art. 17J; English
Arbitration Act, 1996, §§3, 44; Swiss Law on Private International
Law, Arts. 176(1), 183(2).
548 See G. Born & P. Rutledge, International Civil Litigation in
United States Courts 1009-1010 (4d ed. 2007).
549 E.g., Deiulemar Compagnia di Navigazione S.P.A. v. M/V
Allegra, 198 F.3d 473 (4th Cir. 1999) (inspection of vessel, located in
United States, ordered in aid of arbitration seated in London);
Tampimex Oil Ltd v. Latina Trading Corp., 558 F.Supp. 1201
(S.D.N.Y. 1983) (granting attachment of New York bank account in
aid of arbitration in London); Atlas Chartering Services Inc. v. World
Trade Group, Inc., 453 F.Supp. 861, 863 (S.D.N.Y. 1978) (granting
attachment of funds in two accounts in New York banks in aid of
arbitration in London); Paramount Carriers Corp. v. Cook Indus., 465
F.Supp. 599 (S.D.N.Y. 1979) (granting maritime attachment in aid of
arbitration pending in London); Andros Compania Maritima SA v.
Andre & Cie, SA, 430 F.Supp. 88 (S.D.N.Y. 1977) (same); Carolina
Power & Light Co. v. Uranex, 451 F.Supp. 1044 (N.D. Calif. 1977).
ContraContiChem LPG v. Parsons Shipping Co., 229 F.3d 426 (2d
Cir. 2000) (attachment of U.S. funds in aid of London arbitration
denied on grounds that New York rule providing for pre-arbitration
attachment is limited to domestic arbitrations).
572
For an extreme statement of this, consider Castelan v. M/V

Mercantil Parati, 1991 U.S. Dist. LEXIS 6472 (D.N.J. 1991), where
the parties' agreement provided for arbitration in London, under
English law. The district court concluded that, under English law,
the plaintiff in the U.S. action could not have obtained provisional
relief from an English court; nevertheless, because U.S. standards
for maritime arrest were satisfied, the court arrested the defendant's
vessel in aid of the arbitration.
550 Channel Tunnel Group Ltd v. Balfour Beatty Constr. Ltd [1993]
A.C. 334 (House of Lords).
The discretionary power of English courts to grant provisional

measures in aid of a foreign arbitration is confirmed in the English
Arbitration Act, 1996. See English Arbitration Act, 1996, §2(3)(b)
(English court may exercise power to order provisional measures in
aid of foreign-seated arbitration except where “inappropriate”); R.
Merkin, Arbitration Law ¶14.56 (2004 & Update 2007).
551 The “Lady Muriel” v. Transorient Shipping Ltd, 10(7) Mealey's

Int'l Arb. Rev. J-1 (H.K. Court of Appeal, S.Ct.) (1995) (granting
provisional relief in aid of foreign arbitration based on presence of
assets in Hong Kong). CompareInterbulk (Hong Kong) Ltd v. Safe
Rich Indus. Ltd, [1992] 2 HKLR 185 (H.K. High Court, S.Ct)
(expressing doubts as to authority of Hong Kong court to order
interim relief in aid of foreign arbitration).
552 Judgment of 20 October 1989, 1991 RSDIE 368 (Zug District
Court) (Swiss courts can order provisional measures even if the seat
of the arbitration is abroad); J.-F. Poudret & S. Besson, Comparative
Law of International Arbitration ¶611 (2d ed. 2007).
553 Article 1(2) excludes Article 9 from the provisions of the Model
Law that apply only where the arbitration is seated in national
territory. Article 5 of the Model Law does not directly bear on the
issue. G. Petrochilos, Procedural Law in International Arbitration
102 (2004) (“Article 5 does not preclude the courts of the seat of the
arbitration from making interim orders in respect of foreign
proceedings, but neither does it expressly authorize them to do so”).
554 See, e.g., TLC Multimedia Inc. v. Core Curriculum Tech., Inc.,
[1998] B.C.J. No. 1656 (B.C. S.Ct.) (court has power under Article 9
of Model Law to grant provisional measures in aid of foreign
arbitration); Silver Standard Resources Inc. v. JSC Geolog, 168
D.L.R.(4th) 309 (B.C. S.Ct. 1998 (same).
555 UNCITRAL Model Law, 2006 Revisions, Art. 17J (“irrespective
of whether their place is in the territory of this State”).
556 Indian Arbitration and Conciliation Act, Art. 9; Marriott Int'l Inc.
v. Ansal Hotels Ltd, XXVI Y.B. Comm. Arb. 788 (Delhi High Court
2000) (2001) (Indian court lacks power to grant provisional measures
in aid of arbitration seated in Malaysia: “the Court has no jurisdiction
to entertain such a petition for grant of interim measures in relation
to an arbitration being held outside India”). See Goswami, Interim
573
Relief: The Role of the Courts in A. van den Berg (ed.), International
Arbitration and National Courts: The Never Ending Story 116 (ICCA
Congress Series No. 10 2001).
557 Bhatia Int'l v. Bulk Trading SA, XXVII Y.B. Comm. Arb. 234
(Indian S.Ct. 2002) (2002) (Indian courts can provide judicial
assistance in aid of arbitration seated outside India).
558 The “Lady Muriel” v. Transorient Shipping Ltd, 10(7) Mealey's
Int'l Arb. Rev. J-1 (H.K. Court of Appeal, St.Ct.) (1995); Channel
Tunnel Group Ltd v. Balfour Beatty Constr. Ltd [1993] A.C. 334
(House of Lords); Borden, Inc. v. Meiji Milk Prods. Co., 919 F.2d
822 (2d Cir. 1990).
559 [1993] A.C. 334, 358 (House of Lords) (emphasis added).
560 [1993] A.C. at 368.
561 919 F.2d 822 (2d Cir. 1990).
562 In fact, it was unclear in Borden whether the arbitral seat would
be within or outside the United States. 919 F.2d at 827.
563 919 F.2d at 828. For similar U.S. decisions, seeCanWest
Global Comm. Corp. v. Mirk aei Tik shoret Ltd, 804 N.Y.S.2d 549
(N.Y. S. Ct. 2005) (court-ordered provisional measures in aid of
arbitration not available for foreign arbitration); ContiChem LPG v.
Parsons Shipping Co., 229 F.3d 426 (2d Cir. 2000) (attachment of
U.S. funds in aid of London arbitration denied on grounds that New
York rule providing for pre-arbitration attachment is limited to
domestic arbitrations); Palmco Corp. v. JSC Techsnabexport, 448
F.Supp.2d 1194 (C.D. Cal. 2006) (declining provisional measures in
aid of arbitration seated in Sweden: “In accordance with the
arbitration clause Tenex and Palmco chose to include in their
contracts, each has asserted their claims in the Swedish arbitral
tribunal, and therefore both parties must absorb the costs
associated with attending the arbitration, presenting their evidence
and witnesses, and all of the other inconveniences of resolving the
dispute. Everything necessary to resolve this dispute must be
presented in Sweden. A second lawsuit here, covering at least some
of the same territory and requiring the parties to attend and produce
evidence, even if not necessarily requiring direct witness testimony,
is highly inefficient and duplicative of the ongoing arbitration. Even
though only interim relief is sought here, the parties would need to
invest resources in the development of the factual record while
concurrently undergoing the same effort in Sweden, and both the
arbitral tribunal and this Court would have to make factual and legal
findings on matters governed by Swedish law.”).
564 G. Born & P. Rutledge, International Civil Litigation in United
States Courts 1009 et seq. (4th ed. 2007); L. Collins (ed.), Dicey,
Morris & Collins on TheConflicts of Law ¶16-108 (14th ed. 2006).
565 See Ibid. For decisions refusing to recognize foreign judicial
decisions granting provisional measures in aid of international
arbitral proceedings. See City Water Services Ltd v. Dar es Salaam
Water and Sewerage Authority, Misc. Civil Cause No. 20 of 2005
(Tanzanian High Court 8 June 2005) (Tanzanian court refuses to
recognize or enforce English court's provisional measures in aid of
English arbitration).
574
566 Although it is unusual, some arbitration clauses include

provisions expressly permitting resort by the parties to national
courts for injunctive relief. Remy Amérique, Inc. v. Touzet Distrib.
SARL, 816 F.Supp. 213, 215 (S.D.N.Y. 1993) (“The parties may
seek from the Arbitral Tribunal and from any judicial courts of proper
jurisdiction equitable relief by way of temporary and permanent
injunctions.”).
567 UNCITRAL Rules, Art. 26(3) (emphasis added). See D. Caron,
L. Caplan & M. Pellonpää, The UNCITRAL Arbitration Rules: A
Commentary 545 (2006) (“Article 26(3) [of the UNCITRAL Rules]
allows the parties to approach courts both at the place of arbitration
and elsewhere”).
Arbitration Rules: A Commentary 544-544 (2006); J. Lew, L. Mistelis
& S. Kröll, Comparative International Commercial Arbitration 616-
617 (2003); S. Baker & M. Davis, The UNCITRAL Arbitration Rules
in Practice:; The Experience of the Iran-United States Claims
Tribunal 133-143 (1992).
569 ICC Rules, Art. 23(2). See also Schwartz, The Practices and
Measures in International Arbitration 45, 61-62 (1993); Y. Derains &
E. Schwartz, A Guide to the ICC Rules of Arbitration 299-302 (2d
ed. 2005).
570 Note that Article 8(5) of the previous (1988) version of the ICC
Rules permitted court-ordered provisional measures, after the arbitral
tribunal had received the file, only in “exceptional circumstances.”
45, 61-62 (1993). Note also that, even after a tribunal is in place, it
may be difficult to convene a meeting of the tribunal on short notice.
It is feasible for the parties to make written submissions on
extremely short notice, but oral or evidentiary hearing are usually not
possible. That may, as a practical matter, make it difficult to obtain
provisional relief from the tribunal.
571 LCIA Rules, Art. 25(3) (“The power of the Arbitral Tribunal under
Article 25.1 shall not prejudice howsoever any party's right to apply
to any state court or other judicial authority for interim or
conservatory measures before the formation of the Arbitral Tribunal
and, in exceptional cases, thereafter.”). The LCIA Rules’
“exceptional circumstances” formulation parallels that adopted in the
pre-1998 ICC Rules. See supra pp. 1959-1960, 2032.
572 See also ICDR Rules, Art. 21(3).
573 For an arbitral awards considering whether a particular
applications for court-ordered provisional measures was permitted
under the ICC Rules, see Interim Award in ICC Case No. 9324, 11(1)
ICC Ct. Bull. 103 (2000); Interim Award in ICC Case No. 7589, 11(1)
ICC Ct. Bull. 60 (2000);Final Award on Jurisdiction in ICC Case No.
10904, XXXI Y.B. Comm. Arb. 95 (2006). See supra pp. 1972-1973,
2049-2051, 2053-2055.
574 See supra pp. 2006-2008.
575 See, e.g., U.S. FAA, 9 U.S.C. §7; English Arbitration Act,
575
153
1996, §44.
576 See supra pp. 1876 et seq.

576
154
577
The Journal of the London Court of International Arbitration
A Guide to Interim Measures in Investor-State Arbitration
CALINE MOUAWAD & ELIZABETH SILBERT
Volume 29 Number 3 2013
ISSN: 09570411
578
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A forum for the rigorous examination of the international arbitral process,
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579
400 Arbitration International, Volume 29 Issue 3
party requesting the provisional measure establishes a prima facie case that it owns
a legally protected interest.’98
(e) Burdensomeness on the Opposing Party
Paushok v. Mongolia also stated that the tribunal ‘is called upon to weigh the balance
of inconvenience in the imposition of interim measures upon the parties.’99 This
observation is in line with Article 26(3) of the 2010 UNCITRAL Rules, which
states that the likelihood of irreparable harm to the requesting party must
‘substantially outweigh’ the harm that the measures are likely to cause to the other
party if implemented.
IV. ISSUING INTERIM MEASURES: TYPES OF RELIEF

AVAILABLE TO PARTIES
A tribunal’s decision to order interim measures depends not only on the standard
for interim measures being satisfied, but also on the type of relief that a party
requests. The jurisprudence reveals that there are four main types of relief that
tribunals are willing to grant, namely measures that: (A) prevent disclosures to the
media or the public; (B) suspend or otherwise impact related litigation
proceedings; (C) preserve the evidence; and (D) order security for costs.
(a) Non-Disclosure Orders
Arbitral tribunals have issued non-disclosure (or gag) orders to prevent statements
and disclosures to the public or to the media pending the outcome of the
arbitration that would otherwise aggravate, exacerbate, or extend the dispute or
that would impact the integrity of the arbitral proceedings.
To protect these rights to non-aggravation of a dispute, maintenance of status
quo, and protection of procedural integrity, investment tribunals have ordered
disputing parties to refrain from making public statements to the media and from
disclosing documents produced in the arbitration. In Amco Asia v. Indonesia,
Indonesia sought an order restraining Amco from taking any action ‘of any kind
which might aggravate or extend the dispute submitted to the Tribunal, and in
particular that they abstain from promoting, stimulating, or investigating the
publication of propaganda presenting their case selectively outside this tribunal or
otherwise calculated to discourage foreign investment in Indonesia’.100 Indonesia’s
concern was that certain statements by the claimants’ controlling shareholder
reported in press articles would damage Indonesia’s economy. Although the
tribunal was not satisfied on that point, it nonetheless reiterated ‘the good and fair
98
Tethyan v. Pakistan ¶ 117.
99
Paushok v. Mongolia ¶ 79.
100
Amco Asia Corp. et al. v. Republic of Indonesia, ICSID, Decision on the Request of the Republic of Indonesia
for Recommendation of Provisional Measures, 9 December 1983, 24 I.L.M. 366 (1985) (‘Amco Asia v.
Indonesia’), ¶ 1.
580
A Guide to Interim Measures in Investor-State Arbitration 401
practical rule’ that the parties should ‘refrain, in their own interest, to do anything
that could aggravate or exacerbate’ the dispute.101
In Metalclad v. Mexico, the Government of Mexico sought an order prohibiting
the disclosure of any information about the case and an order that any breach
would entitle it to request the tribunal to enforce sanctions.102 The tribunal refused
to grant the relief sought because the claimant was a public company trading on a
public stock exchange with a duty to provide certain information to its
shareholders.103 However, while refusing to grant the request, the tribunal
emphasized that ‘it still appears to the tribunal that it would be of advantage to the
orderly unfolding of the arbitral process and conducive to the maintenance of
working relations between the Parties if during the proceedings they were both to
limit public discussion of the case to a minimum, subject only to any externally
imposed obligation of disclosure by which either of them may be legally bound.’104
The tribunal in Biwater Gauff v. Tanzania examined the claimant’s request for
interim measures to preserve the confidentiality of the proceedings and the
documents produced or disclosed in the arbitration. The tribunal first noted that
‘[i]t is now settled in both treaty and international commercial arbitration that an
arbitral tribunal is entitled to direct the parties not to take any step that might (1)
harm or prejudice the integrity of the proceedings, or (2) aggravate or exacerbate
the dispute.’105 The tribunal then considered that these bases for interim measures
include the need (i) to preserve the tribunal’s mission and mandate to determine
finally the issues between the parties, and the proper functioning of the dispute
settlement procedure; (ii) to ensure the orderly unfolding of the arbitration process
and a level playing field; (iii) to minimize the scope for any external pressure on any
participant in the arbitration; and (iv) to avoid ‘trial by media.’106 The tribunal
concluded that ‘[i]t is self-evident that the prosecution of a dispute in the media or
in other public fora, or the uneven reporting and disclosure of documents or other
parts of the record in parallel with a pending arbitration, may aggravate or
exacerbate the dispute and may impact upon the integrity of the procedure,’
particularly ‘in very public cases.’107 Accordingly, the tribunal granted the
requested interim measures so as to preserve the integrity of the proceedings and
prevent the aggravation of the dispute, which might have occurred if certain
documents or records had been made public.108
101
Id. ¶ 5.
102
Metalclad Corp. v. The United Mexican States, ICSID Case No. ARB(AF)/97/1, Decision on a Request by the
Respondent for an Order Prohibiting the Claimant from Revealing Information Regarding ICSID Case
ARB/(AF)/97/1, 27 October 1997, ¶ 1 (‘Metalclad v. Mexico’).
103
Id. ¶ 9.
104
Id. ¶ 10. See also The Loewen Group, Inc. and Raymond L. Loewen v. United States of America, ICSID Case No.
ARB(AF)/98/3, Decision on Hearing of Respondent’s Objection to Competence and Jurisdiction, 5
January 2001, ¶ 26 (same) (‘Loewen v. US’).
105
Biwater Gauff v. Tanzania, Procedural Order No. 3 ¶ 135.
106
Id.
107
Id. ¶ 136.
108
See also Chevron v. Ecuador, Order on Interim Measures, 14 May 2010, reconfirmed in Procedural Order and
Further Order on Interim Measures, 28 January 2011, Point 1(i) and (ii) (ordering the parties ‘to maintain,
581
Like the Metalclad v. Mexico and Biwater Gauff v. Tanzania tribunals, the EDF v.
Romania tribunal expressed concern over the ‘risk of derailment [of the arbitral
process] by some sort of parallel process conducted by and through the press.’109
Although the tribunal recognized the public interest in making available
information on certain sensitive issues (such as allegations of corruption by public
officials), it considered that such interest had ‘to be balanced with the essential
objective, in both Parties’ interest, that the course of the arbitral process they have
freely chosen to enforce their rights not be endangered in any manner by external
pressures.’110 It thus ordered the parties to refrain ‘from taking any steps which
might undermine the integrity of the arbitral process or its orderly working and/or
that more generally might aggravate or exacerbate the dispute,’ including
prohibiting the disclosure of any documents produced or originating in the
arbitration,111 and further specified that ‘[g]eneral discussion of the case in public
is not restricted if not used to antagonize the Parties, to exacerbate the dispute or
render its resolution potentially more difficult.’112
(b) Suspension of Parallel Proceedings
Numerous international tribunals – including ICSID tribunals, ad hoc international
investment tribunals, the US-Iran Claims Tribunal, and the ICJ – have granted
interim measures directed at the conduct of domestic courts. In his seminal treatise
on international arbitration, Gary Born likens interim measures directed at
pending litigation to court-ordered ‘anti-suit’ injunctions. In this way, an arbitral
tribunal can address the risk of parallel and inconsistent proceedings by issuing an
injunction in protection of its own jurisdiction.113 Mr. Born observes that a
tribunal’s anti-suit order is ‘directed against a party to the arbitration, not
technically against a national court.’114
Arbitral tribunals have issued orders directed at various types of local
proceedings, namely: (1) parallel litigation proceedings; (2) bankruptcy
proceedings; (3) enforcement proceedings; and (4) criminal proceedings.
(i) Parallel Litigation Proceedings

In recent years, a number of international tribunals have issued interim measures
to suspend or dismiss pending litigations, predominantly on jurisdictional grounds
to protect the tribunals’ ability to decide the parties’ dispute before them.
as far as possible, the status quo and not to exacerbate the procedural and substantive disputes before this
Tribunal, including ... the avoidance of any public statement tending to compromise these arbitration
proceedings’ and ‘to refrain from any conduct likely to impair or otherwise adversely affect, directly or
indirectly, the ability of the Tribunal to address fairly any issue raised by the Parties before this Tribunal.’).
109
EDF (Services) Limited v. Romania, ICSID Case No. ARB/05/13, Procedural Order No. 2, 30 May 2008, ¶ 50
(‘EDF v. Romania’).
110
Id. ¶ 52.
111
Id. ¶ 54(1) and (2).
112
Id. ¶ 54(2).
113
Born, International Commercial Arbitration at 2009.
114
Id.
582
Most of these cases involve the tribunal ordering one of the parties to the
arbitration to cease, suspend, or refrain from filing a related litigation against the
other party. For example, in SGS v. Pakistan, the Supreme Court of Pakistan
enjoined the claimant from pursuing or participating in the ICSID arbitration,
instead granting Pakistan’s request to proceed with domestic arbitration pursuant
to the contract at issue.115 Although Pakistan had applied for an order of contempt
of court, the judgment of the Supreme Court did not issue a notice of contempt,
but the claimant was concerned that steps could be taken by an indefinite number
of persons to pursue contempt proceedings.116 The claimant thus sought interim
relief ordering Pakistan to withdraw from and cause to be discontinued all
proceedings in Pakistani courts relating to the ICSID arbitration, including any
stay of the ICSID arbitration and any contempt proceedings.117 The tribunal first
noted that it is ‘essential for the proper operation of both the BIT and the ICSID
Convention that the right of access to international adjudication be maintained’118
and that the ‘right to seek access to international adjudication must be respected
and cannot be constrained by an order of a national court.’119 Accordingly, the
tribunal ordered the Government of Pakistan ‘not [to] take any step to initiate a
complaint for contempt ... [and to] ensure that if contempt proceedings are
initiated by any party, such proceedings not be acted upon.’120
In Tokios Tokelés v. Ukraine, the tribunal relied on Article 26’s exclusive remedy
rule and Article 47’s authorization that a tribunal may issue interim measures ‘to
preserve the respective interests of either party,’121 and ordered the parties to
‘refrain from, suspend and discontinue, any domestic proceedings, judicial or
other, concerning Tokios Tokelés or its investment in Ukraine ... which might
prejudice the rendering or implementation of an eventual decision or award of this
Tribunal or aggravate the existing dispute.’122 Similarly, the Iran-US Claims
Tribunal directed parties to take action in connection with local proceedings so as
to protect its jurisdiction. In E-Systems, Inc. v. Iran, the claimant sought to enjoin
Iran from prosecuting before its own courts an action that it could have brought
before the arbitral tribunal as a counterclaim.123 The tribunal noted that, while it
115
SGS Société Générale de Surveillance S.A. v. Islamic Rep. of Pakistan, ICSID Case No. ARB/01/13, Procedural
Order No. 2, 16 October 2002 (‘SGS v. Pakistan’), ICSID Review – Foreign Investment Law Journal, Vol. 18
No. 1 (2003), p. 296.
116
Id. at 297.
117
Id. at 299.
118
Id. at 300.
119
Id.
120
Id. at 305. The tribunal further ordered that the domestic arbitration be stayed pending the tribunal’s
decision on jurisdiction and that a copy of the tribunal’s order be transmitted to the arbitrator in the
domestic arbitration. Id.
121
Tokios Tokelés v. Ukraine, Procedural Order No. 1 ¶ 3. See also Aucoven v. Venezuela ¶ 205 (noting that ‘[b]y
entering into such an exclusive arbitration agreement, both parties have accepted to refrain from proceeding
before a court which is not the one jointly entrusted with the resolution of the dispute’); Perenco v. Ecuador ¶
61 (ruling that ‘none of the parties may resort to the domestic courts of Ecuador to enforce or resist any
claim or right which forms part of the subject matter of this arbitration’).
122
Tokios Tokelés v. Ukraine, Procedural Order No. 1 ¶ 7.
123
E-Systems, Inc. v. Iran, 2 Iran-U.S. Cl. Trib. Rep. 51, 57 (1983).
583
would have had jurisdiction over the counterclaim, its jurisdiction was not
exclusive under the terms of its formative document, the Algiers Accord. Thus,
instead of ordering Iran to withdraw its action before the Iranian courts, the
tribunal ordered Iran to request a stay of the case to preserve the tribunal’s
jurisdiction. The tribunal noted that it has ‘an inherent power to issue such orders
as may be necessary to conserve the respective rights of the Parties and to ensure
that this Tribunal’s jurisdiction and authority are made fully effective.’124
The Millicom v. Senegal tribunal also directed the respondent State to suspend
local court proceedings that it had commenced in Senegal against one of the
claimants (Sentel) and its ultimate parent company (MIC), seeking an order to
compel Sentel to cease and desist its operations (which Senegal considered to be
conducted in the absence of a valid concession) and to pay damages for harm
caused to the State.125 This local proceeding was brought on the same day that the
claimants filed their request for arbitration concerning the disputed termination of
Sentel’s telecommunications concession granted by Senegal. In their interim
measures application, the claimants requested that the tribunal order Senegal to
discontinue the local court proceedings. The tribunal considered that both sets of
proceedings concerned the same set of facts, namely the existence and
continuation of the concession.126 Although the parties to the two proceedings
were not identical – MIC was a party to the local proceedings but not the
arbitration, while MIO was a party to the arbitration but not to the local
proceedings – the tribunal nonetheless granted interim measures on the basis that
‘Claimant 2 in these proceedings (MIO) has an obvious interest in the outcome of
the Senegalese proceedings, if it can claim the benefit of a protected investment by
virtue of its interest in Sentel’s capital.’127
In some cases, the tribunal directly addressed the domestic courts,
recommending or ordering them to stop proceedings involving the same issues
presented to the ICSID tribunal.128 In Zhinvali v. Georgia, the claimant requested
interim measures in response to a domestic litigation that allegedly affected issues
pending before the ICSID tribunal. The domestic proceeding involved a claim by
Tbilisi Water Utilities Ltd., a municipal governmental entity, against the City of
Tbilisi to cancel the agreement between the parties to the ICSID arbitration.129
The claimant was named as a ‘third person’ to the local lawsuit. According to the
claimant’s interim measures request, the domestic lawsuit (and inclusion of the
claimant’s name as a party-in-interest) was designed purely to strip the ICSID
124
Id. at 57.
125
Millicom Int’l Operations B.V. and Sentel GSM SA v. Republic of Senegal, ICSID Case No. ARB/08/20, Decision
on the Application for Provisional Measures, 9 December 2009, ¶ 17 (‘Millicom v. Senegal’).
126
Id. ¶ 45(b).
127
Id. ¶ 45(d). The tribunal also noted that ‘protected rights can also include procedural rights such as the
general right to status quo and the right to non-aggravation of the dispute.’ Id. ¶ 45(e).
128
See Zhinvali v. Georgia ¶¶ 44-45; CSOB v. Slovak Republic, Procedural Order No. 4; CSOB v. Slovak Republic,
Procedural Order No. 5.
129
Zhinvali v. Georgia ¶ 38.
584
tribunal of jurisdiction and bind the claimant to the local judgment.130 The
tribunal issued interim measures, finding that a final judgment in the Georgian
lawsuit could have affected adversely the claimant’s rights and interests.
Accordingly, the tribunal made two recommendations: (1) that the Georgian court
‘stay and suspend its proceedings insofar as any issues pending before the Tribunal
were concerned,’ and (2) that Georgia immediately notify its courts of the tribunal’s
recommendation.131 While a Georgian court had already preliminarily ruled on
the agreement between the parties at the time of the tribunal’s order, within
months that ruling was vacated by a higher regional court.132
It is notable that Zhinvali v. Georgia, like CSOB v. Slovak Republic discussed below,
involved the application of Article 26 to enjoin domestic proceedings even when
the parties to the domestic proceedings were not identical to those involved in the
ICSID arbitration. In Zhinvali v. Georgia, the domestic court proceedings involved
two governmental entities, and the claimant was simply named as a ‘third person’
in interest. However, the domestic proceedings involved or affected the same real
party-in-interest, and subjected an issue under the jurisdiction of ICSID to the
judgment of a local court.133 As a general matter, it is accepted that interim
measures, adopted by an arbitral tribunal against a State party to a BIT or other
arbitration, may validly impact upon the position of a private third party.134
Indeed, even if the interim measures would have a direct impact on the rights of a
third party (e.g., an order sequestering assets due to a third-party creditor), that
does not preclude their adoption.
In the UNCITRAL arbitration Himpurna v. Indonesia, the tribunal did not direct
the Indonesian courts to stay or dismiss a litigation, but rather it issued a
preliminary order disregarding the Indonesian courts’ injunction against the
arbitration.135 The tribunal refused to suspend its proceedings, holding that
Indonesia had consented to the jurisdiction of the international tribunal by signing
the Terms of Appointment establishing the tribunal.136 The tribunal refused to
accede to the injunctions issued by Indonesia’s courts, and eventually rendered an
award of nearly USD 400 million against Indonesia for breaches of its investment
agreement with Himpurna.137
130
Id.
131
Id. ¶ 45.
132
Id. ¶ 46.
133
In contrast, in Pey Casado v. Chile, the tribunal found that it could not issue interim measures regarding a local
dispute, reasoning that the dispute was not identical to the ICSID proceeding because the parties were not
the same. Pey Casado v. Chile, ICSID Case No. 98/2, Decision on Provisional Measures, 25 September 2001,
¶ 40 (‘Pey Casado v. Chile’).
134
See, e.g., UNCITRAL Model Law on International Commercial Arbitration (1985 as amended 2006), Art
17H(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.’
135
Himpurna California Energy Ltd. v. Republic of Indonesia, Interim Award, 26 September 1999, ¶ 73 (‘Himpurna v.
Indonesia’).
136
Id. ¶ 73.
137
Himpurna v. Indonesia, Final Award, 16 October 1999.
585
Finally, it bears mention that arbitral tribunals may equally order the
termination of local litigation proceedings as final, not interim, relief. In ATA v.
Jordan, the claimant complained of the Jordanian courts’ annulment of an arbitral
award and the extinguishment – by operation of Jordanian law applied
retroactively – of the parties’ arbitration agreement contained in the relevant
contract.138 The tribunal concluded that such extinguishment of the claimant’s
right to arbitrate violated the bilateral investment treaty and that the only way to
repair all of the consequences of this unlawful act was to restore the claimant’s
right to arbitration.139 The tribunal thus ordered ‘that the ongoing Jordanian court
proceedings in relation to the Dike No. 19 dispute be immediately and
unconditionally terminated, with no possibility to engage further judicial
proceedings in Jordan or elsewhere on the substance of the dispute’ and that the
claimant was entitled to proceed to arbitration in relation to the Dike No. 19
dispute in accordance with the parties’ arbitration agreement.140 Although the
tribunal’s termination order on its terms was not directed at a particular party or
entity, the tribunal later clarified that both the claimant and the respondent State
were bound to comply with this order immediately.141
(ii) Bankruptcy Proceedings

Arbitral tribunals’ interim measures orders directed at domestic courts also have
related to bankruptcy proceedings that had an impact on the issues pending before
the tribunal. In CSOB v. Slovak Republic, the parties had entered into a
‘Consolidation Agreement’ in which the Slovak Republic guaranteed to cover the
losses of a collection company that had defaulted on its payment obligations to the
claimant bank.142 When the collection company defaulted, CSOB initiated ICSID
arbitration against the Slovak Republic on the basis of the guarantee. At the same
time, the Slovak government filed insolvency proceedings against the collection
company in the Slovak courts. CSOB submitted several interim measures requests
to the ICSID tribunal and directly requested a suspension of proceedings from the
Slovak court.143 The Slovak court denied the suspension request at first, reasoning
that although the government is bound by international agreements, Slovakian
legislation created ‘no conflict of legal relations’ with these international
agreements, and that in any event the decision of the ICSID tribunal would be
binding and valid notwithstanding the results of the local proceedings.144
However, the tribunal found that the Slovak court proceedings related to questions
presented to ICSID, and therefore issued two relevant orders: (1) a
recommendation to the Slovak courts that they suspend the proceedings to the
138
ATA Construction, Industrial, and Trading Co. v. The Hashemite Kingdom of Jordan, ICSID Case No. ARB/08/2,
Award, 18 May 2010, ¶ 124 (‘ATA v. Jordan’).
139
Id. ¶¶ 129, 131.
140
Id. ¶ 133(4) and (5).
141
ATA v. Jordan, Decision on Interpretation and on the Request for Provisional Measures, 7 March 2011, ¶ 44.
142
CSOB v. Slovak Republic, Procedural Order No. 4; CSOB v. Slovak Republic, Procedural Order No. 5.
143
CSOB v. Slovak Republic, Procedural Order No. 4; CSOB v. Slovak Republic, Procedural Order No. 5.
144
CSOB v. Slovak Republic, Procedural Order No. 5, at 1.
586
extend they involve matters at issue in the arbitration, and (2) a command to the
parties that they bring the tribunal’s order to the attention of the appropriate
Slovakian courts.145
Like Zhinvali v. Georgia discussed above, the parties to the domestic proceedings
in CSOB v. Slovak Republic – namely the government and a third-party collection
agency – were not identical to those involved in the ICSID arbitration (the
claimant bank and the government). Yet the domestic proceedings involved or
affected an issue within the exclusive jurisdiction of the ICSID tribunal.
Nonetheless, there are also important examples in which ICSID tribunals have
refused to interfere in domestic bankruptcy proceedings where the parties were not
identical and the issues were not in direct correlation. For example, in Plama v.
Bulgaria, the tribunal refused to suspend local insolvency proceedings where the
claims, causes of actions, and parties in the two proceedings were different, and
where the local proceedings could not affect the outcome of the ICSID
arbitration.146
Finally, in Azurix v. Argentina, the Province of Buenos Aires terminated the
concession contract of the claimant’s local subsidiary, ABA, ultimately forcing ABA
to request protection from its creditors by seeking reorganization proceedings.147
The Province managed to become ABA’s largest creditor for purposes of voting on
ABA’s proposed restructuring agreement.148 The claimant thus sought interim
measures ordering Argentina to refrain from aggravating the dispute, particularly
given ABA’s reorganization proceedings.149 The tribunal considered that, to grant
the requested measures, it would have to decide (1) the extent to which protecting
Azurix’s rights under the treaty was linked to protecting ABA and its rights, and (2)
the extent to which the Province’s conduct engaged Argentina’s international
responsibility.150 To answer these questions would require the tribunal to prejudge
the merits, and thus the tribunal held that it was not in a position to grant the
interim measures requested.151 Notwithstanding this conclusion, however, the
tribunal invited the parties ‘to abstain from adopting measures of any character
that could aggravate or extend the controversy submitted to this arbitration.’152
(iii) Enforcement Proceedings

To protect contractual and legal rights, including the rights to the status quo, the
non-aggravation of the dispute, and the integrity of the arbitral proceedings,
145
Id. at 2.
146
Plama v. Bulgaria ¶ 38.
147
Azurix Corp. v. The Argentine Rep., ICSID Case No. ARB/01/12, Decision on Provisional Measures, 6 August
2003, ¶¶ 2-3 (‘Azurix v. Argentina’).
148
Id. ¶ 13.
149
Id. ¶ 22.
150
Id. ¶ 44.
151
Id. ¶ 45.
152
Id. ¶ 50(b).
587
arbitral tribunals have ordered the suspension of enforcement proceedings, i.e., of

proceedings that seek to enforce a disputed law or debt (such as a judgment).
One of the earliest cases on point is the In re Electricity Company case, in which the
PCIJ ordered Bulgaria to ensure that, pending the proceedings before the Court,
no further steps were taken in a local collection action brought by the Municipality
of Sofia against a Belgian company.153 In the investor-State context, arbitral
tribunals also have not been timid about ordering interim measures directed at
enforcement proceedings. In City Oriente v. Ecuador, for example, the tribunal
ordered Ecuador to refrain from demanding payment of disputed amounts
allegedly due under the new law, and from instituting or pursuing any judicial
proceedings (including criminal proceedings and collection actions) against City
Oriente or its employees in relation to the contracts at issue.154
The Perenco v. Ecuador tribunal also enjoined Ecuador from, inter alia, demanding
payment of any amounts allegedly due by Perenco under the new Law 42,
instituting or pursuing any judicial proceedings against Perenco or its employees to
collect the disputed amounts.155 The tribunal considered that, pending the
arbitration challenging the additional payments required by the new law but not
by the contract, Perenco should not have to choose between making the disputed
payments and suffering coercive actions by Ecuador (such as seizure of its oil
production or other assets) to collect those disputed payments.156
Similarly, the Burlington v. Ecuador tribunal restrained Ecuador from taking
imminent coercive action against Burlington to enforce payments pursuant to Law
42, emphasizing that ‘the rights to be preserved by provisional measures ... may
extend to procedural rights, including the general right to the status quo and to the
non-aggravation of the dispute. These latter rights are thus self-standing rights.’157
In that case, Ecuador and Petroecuador had initiated seizures and judicial
proceedings against the claimant’s oil production, arguing that the State had a
duty to enforce its own laws regardless of the pending ICSID proceeding.158 The
tribunal rejected this argument, noting that by ratifying the ICSID Convention,
Ecuador accepted the power of an ICSID tribunal to enforce provisional
measures, ‘even in a situation which may entail some interference with sovereign
powers and enforcement duties.’159 The tribunal ordered that Ecuador and
Petroecuador (the respondents in the ICSID arbitration) ‘shall discontinue the
proceedings pending against the Claimant ... and shall not initiate new []
actions.’160
153
In re Electricity Company at 199.
154
City Oriente v. Ecuador ¶ 55.
155
Perenco v. Ecuador ¶ 79.
156
Id. ¶ 60. On the same basis, the Burlington v. Ecuador tribunal also restrained Ecuador from taking imminent
coercive action against Burlington to enforce payments pursuant to Law 42.
157
Burlington v. Ecuador ¶¶ 60, 68, 73. See also Quiborax v. Bolivia ¶ 117.
158
Burlington v. Ecuador ¶¶ 64-66.
159
Id. ¶ 66.
160
Id. at 29, point 7.
588
The EnCana v. Ecuador tribunal reached a different conclusion.161 The claimant,

through its subsidiaries, was a party to a series of oil contracts with the Ecuadorian
national oil company, Petroecuador, which entitled the subsidiaries to a share of oil
produced from each field covered by the contracts. Subsequently, the Ecuadorian
tax service changed the way in which it allowed VAT rebates for goods and services
used in connection with the production of oil for export, effectively denying VAT
rebates on future acquisitions, while also pursuing certain enforcement measures to
reclaim VAT refunds wrongly paid in its view. Specifically, Ecuador froze the bank
accounts of the claimant’s subsidiary and its legal representative in Ecuador, in an
effort to recover approximately USD 7.5 million claimed to be owed to Ecuador as
a result of incorrect VAT refunds.162 These actions formed the subject of EnCana’s
interim measures application. The tribunal found that Ecuador’s enforcement
measures were open to challenge before the Ecuadorian tax courts and that, in any
event, if jurisdiction was upheld ultimately, it would be open to the tribunal to
provide redress to the claimant for any losses suffered by the enforcement measures
taken in breach of the treaty, including by payment of interest on sums
refunded.163 Accordingly, the tribunal concluded that it was not necessary to order
the withdrawal of the enforcement measures against EnCana’s subsidiary to
protect the claimant’s rights at stake in the arbitration from irreparable harm.164
More recently, two arbitral tribunals considered requests for interim measures
orders seeking to preserve the status quo by preventing the enforcement of local
court judgments: Quantum v. DRC and Chevron v. Ecuador. Although both of these
cases initially issued strong measures against the respondent State, they evolved
very differently, with the Quantum v. DRC tribunal ultimately revoking its interim
measures while the Chevron v. Ecuador tribunal increased the strength of its interim
measures by issuing three interim awards on interim measures.
The claimants in the Quantum v. DRC case took an unusual approach and
requested not only interim measures but also a provisional freezing order pending
the tribunal’s decision on their interim measures request. The claimants sought to
bar the DRC from enforcing or executing upon two decisions of its national courts
so as to preserve the status quo: (1) a 12 March 2010 commercial decision ordering
one of the claimants to pay monetary damages to the Congo’s state-owned mining
company; and (2) a Supreme Court decision dated 14 May 2010, which served as
the basis for the DRC’s revocation of the claimants’ mining title.165 In its
Procedural Order No. 1, the Quantum v. DRC tribunal granted the claimants’
request for a provisional freezing order and ‘recommended’ to the DRC to ‘take
whatever measures and actions are necessary and useful to suspend any further
enforcement measure’ of both aforementioned decisions, pending the tribunal’s
161
EnCana Corp. v. Republic of Ecuador (UNCITRAL), Interim Award, Request for Interim Measures of
Protection, 31 January 2004 (‘EnCana v. Ecuador’).
162
Id. ¶ 2.
163
Id. ¶ 17.
164
Id. ¶¶ 17-19.
165
Int’l Quantum Resources Ltd., Frontier SPRFL and Compagnie Minière de Sakania SPRL v. Democratic Republic of the
Congo, ICSID Case No. ARB/10/21, Procedural Order No. 1, ¶ 16, 1 July 2011, (‘Quantum v. DRC’).
589
decision on the claimants’ request for interim measures.166 A few months later, the
tribunal considered the merits of the claimants’ interim measures application.167
With respect to the money judgment against one of the claimants, the tribunal
rejected the requested suspension of enforcement as neither necessary nor urgent
on the basis that the decision was under appeal and thus unenforceable as a matter
of local law.168 The tribunal, however, kept open the possibility of granting relief
with respect to that case, which ‘is based on circumstances closely related to this
[ICSID] case,’ even though it involved parties who were not identical to the parties
to the arbitration.169 The tribunal then rejected the claimants’ request to suspend
enforcement of the Supreme Court decision on the basis that the requested
measure was not necessary in light of the DRC’s representation that the judgment
had already been fully executed.170
In contrast, the arbitral tribunal in Chevron v. Ecuador issued a number of
incrementally-stronger interim measures orders and awards seeking to preserve the
status quo and non-aggravation of the dispute by preventing the enforcement of an
Ecuadorian court judgment. The tribunal issued its first interim measures order in
May 2010, ordering the parties (i) ‘to maintain ... the status quo and not to
exacerbate the procedural and substantive disputes before this Tribunal,
including ... the avoidance of any public statement tending to compromise these
arbitration proceedings’ and (ii) to refrain from ‘any conduct likely to impair or
otherwise adversely affect, directly or indirectly, the ability of the Tribunal to
address fairly any issue raised by the Parties before this Tribunal.’171 Nearly three
years after issuing its original interim measures order, the Chevron v. Ecuador
tribunal’s Fourth Interim Award, issued in February 2013, held that Ecuador had
violated its First and Second Interim Awards by issuing and rendering enforceable
the Lago Agrio judgment in defiance of the tribunal’s directives.172
(iv) Criminal Proceedings

Arbitral tribunals have not been timid about ordering the suspension of criminal
proceedings. In City Oriente v. Ecuador, criminal complaints were filed against three
executives of City Oriente Limited, alleging, inter alia, that these individuals had
committed the crime of embezzlement by not paying the so-called additional
participation established by Law No. 2006-42. The tribunal granted the claimant
provisional relief ordering Ecuador to refrain from ‘instituting or prosecuting, if
166
Quantum v. DRC, Procedural Order No. 1 ¶ 30(3)(i) and (ii). The tribunal rejected the claimants’ request for
a directive ordering the DRC to refrain from aggravating the dispute on the basis that the formulated
request was too general. Id. ¶ 28. However, the tribunal noted that non-aggravation of the dispute is a
general principle applicable to all arbitrating parties. Id.
167
Quantum v. DRC, Procedural Order No. 3, 28 November 2011.
168
Id. ¶ 112.
169
Id.
170
Id. ¶¶ 103-04.
171
Chevron v. Ecuador, Order on Interim Measures, 14 May 2010, reconfirmed in Procedural Order and Further
Order on Interim Measures, 28 January 2011.
172
Chevron v. Ecuador, Fourth Interim Award, 7 February 2013.
590
already in place, any judicial proceeding or action of any nature whatsoever

against or involving [the claimant] and/or its officers or employees arising from or
in connection with’ the contract at issue.173 Although the tribunal noted that ‘it has
great respect for the Ecuadorian Judiciary and that it acknowledges Ecuador’s
sovereign right to prosecute and punish crimes of all kinds perpetrated in its
territory,’ the tribunal held that Ecuador’s sovereign right to prosecute and punish
crimes ‘should not be used as a means to coercively secure payment of the amounts
allegedly owed by City Oriente ... since this would entail a violation of the
principle that neither party may aggravate or extend the dispute or take justice into
their own hands.’174 The coercive nature of the criminal prosecutions powerfully
reinforced the need for immediate interim measures: ‘In the Tribunal’s opinion,
the passing of the provisional measures is indeed urgent, precisely to keep the
enforced collection or termination proceedings from being started, as this operates
as a pressuring mechanism, aggravates and extends the dispute and, by itself,
impairs the rights which Claimant seeks to protect through this arbitration.’175
In Quiborax v. Bolivia, the tribunal found that Bolivia’s pursuit of criminal
proceedings against one of the co-claimants and other related individuals was
related to, ‘and may even be motivated by,’ the ICSID arbitration.176 In the
tribunal’s view, the factual accusation underlying the criminal proceedings was
that certain documents were forged to support Claimants’ contention that they
were investors in Bolivia at the time that the dispute brought before the tribunal
arose, thus allowing them to gain access to ICSID arbitration under the Chile-
Bolivia bilateral investment treaty.177 This access to ICSID arbitration was
deemed to satisfy the harm element of the crime prosecuted.178 Like the City Oriente
v. Ecuador tribunal, the Quiborax v. Bolivia tribunal noted that it ‘has every respect for
Bolivia’s sovereign right to prosecute crimes committed within its territory’179 and
that Bolivia ‘has the sovereign power to prosecute conduct that may constitute a
173
City Oriente v. Ecuador ¶ 55.
174
Id. ¶ 62. The City Oriente v. Ecuador tribunal is one of several tribunals that has had occasion to scrutinize a
State’s exercise of its sovereign powers in the context of an interim measures request. See generally Himpurna
v. Indonesia, Interim Award ¶ 21 (‘The Arbitral Tribunal’s respect for the sovereignty of the Republic of
Indonesia is complete. But it is precisely by the exercise of an attribute of sovereignty that a State accepts
binding international undertakings ... The present Arbitral Tribunal would prefer not to have to pass
judgment on procedural initiatives of the Republic of Indonesia, but neither will it shirk, if the issue arises
and is pressed, from its own duties[.]’); Burlington v. Ecuador ¶ 66 (‘by ratifying the ICSID Convention,
Ecuador has accepted that an ICSID tribunal may order measures on a provisional basis, even in a situation
which may entail some interference with sovereign powers and enforcement duties.’).
175
Id. ¶ 69. See also E-Systems, Inc. v. Islamic Republic of Iran, Case No. 388, Interim Award No. ITM 13-388-FT,
Iran-U.S. Cl. Trib., UNCITRAL Arbitration Rules, 4 February 1983 (stating that the tribunal has an
‘inherent power’ to issue orders as necessary to conserve the rights of the Parties and ensure the effectiveness
of the tribunal’s jurisdiction). The tribunal in E-Systems further declared that its eventual award would
prevail over inconsistent local decisions because the tribunal had ‘been established by inter-governmental
agreement.’ Id.
176
Quiborax v. Bolivia ¶ 119.
177
Id. ¶ 120.
178
Id. ¶ 121.
179
Id. ¶ 120.
591
crime on its own territory, if it has sufficient elements justifying prosecution.’180

However, the tribunal emphasized that ‘such power must be exercised in good faith
and respecting Claimants’ rights, including their prima facie right to pursue this
arbitration.’181 Ultimately, the tribunal ordered Bolivia to take all appropriate
measures to suspend the criminal proceedings on the basis that these proceedings
threatened the procedural integrity of the ICSID proceedings, in particular with
respect to Claimants’ right of access to evidence through potential witnesses.182
In Tokios Tokelés v. Ukraine, the tribunal rejected the claimant’s request to reaffirm
a prior interim measures order and to order the Ukraine to refrain from, suspend,
and discontinue criminal proceedings brought against a founder and key manager
of the claimant’s local subsidiary on the basis that the requested interim measures
were neither necessary nor urgent to protect the claimant’s rights in the ICSID
arbitration.183 In particular, the tribunal found that the claimant had not
demonstrated that the manager’s absence from Ukraine had caused decline in
profits of such magnitude as to impair the claimant’s ability to finance the
arbitration.
Citing this Tokios Tokelés v. Ukraine Procedural Order No. 3 with approval, the
tribunal in Caratube v. Kazakhstan cautioned that, for a tribunal to issue interim
measures relating to criminal proceedings, ‘a particularly high threshold must be
overcome.’184 In the case before it, however, the tribunal concluded that the
claimant had failed to meet this high threshold. According to the tribunal, the
claimant had not shown that the criminal proceedings somehow precluded its
procedural right to continue with the ICSID arbitration and, since the claimant
was not seeking specific performance, no interim measures were required to
protect the claimant’s right to money damages.185 The tribunal thus rejected the
claimant’s request for interim measures ordering the Kazakhstani authorities to
refrain from acting upon any existing criminal complaints or to file any new
criminal complaints against the claimant.186
Tribunals operating under the UNCITRAL Rules also have addressed requests
for interim measures directed at criminal proceedings. In Paushok v. Mongolia, the
claimants asked the tribunal to issue provisional measures against Mongolia to
suspend enforcement of the disputed windfall profit tax law, any criminal action
against claimants, and all other conduct aggravating the dispute.187 The tribunal
180
Id. ¶ 123.
181
Id.
182
See infra Section IV.C on preservation of evidence.
183
Tokios Tokelés v. Ukraine, Procedural Order No. 3 ¶ 12.
184
Caratube International Oil Company LLP v. Republic of Kazakhstan, ICSID Case No. ARB/08/12, Decision
Regarding Claimant’s Application for Provisional Measures, 31 July 2009, ¶ 137 (‘Caratube v. Kazakhstan’).
Although the tribunal noted that criminal proceedings are ‘a most obvious and undisputed part of the
sovereign right of a state to implement and enforce its national law on its territory,’ the tribunal reaffirmed
that criminal proceedings ‘may not be totally excluded from the scope of provisional measures in ICSID
proceedings.’ Id. ¶¶ 135-36.
185
Id. ¶ 139.
186
Caratube v. Kazakhstan ¶ I.5.
187
Paushok v. Mongolia ¶ 12.
592
agreed, ordering the State to refrain from initiating any seizure or lien proceeding
against assets of the claimants, and also issuing a more general ban on ‘any action
which could lead to further injury and aggravation of the dispute between the
parties.’188 While the tribunal did not describe or discuss the alleged criminal
actions, its decision to grant the claimant’s provisional measures request in full, and
its general directive that neither party shall aggravate the dispute, suggests that it
intended to halt any ongoing prosecution. The Chevron v. Ecuador tribunal likewise
issued interim measures orders and awards directing Ecuador to maintain the status
quo, in response to applications based on the criminal proceedings against the
claimants’ lawyers, in addition to the environmental litigation.
(c) Preservation of Evidence

Investment treaty tribunals also have faced requests for interim measures to
preserve evidence, whether documentary or testimonial.
In AGIP v. Congo, the Congolese government nationalized the claimant’s
subsidiary, occupied its local offices, and seized its records.189 After commencing
ICSID arbitration, the claimant requested interim measures ordering the
government to collect all of the documents that had been kept at the local office, to
provide the tribunal with a complete list of these documents, and to keep these
documents available for presentation to the tribunal at the claimant’s request.190
The respondent did not avail itself of the right to make observations, and the
tribunal issued interim measures in the terms requested.191
The Biwater Gauff v. Tanzania tribunal observed that the preservation of evidence
was ‘one of the most common forms of interim relief ’192 when it granted the
claimant’s request to preserve documentary evidence (hard copy and electronic)
that was in Tanzania and beyond the claimant’s possession, custody, or control.
In contrast, the tribunal in Railroad Development v. Guatemala rejected the
claimant’s request for an interim measure of protection mandating that Guatemala
preserve certain categories of documents while the arbitration was pending.193
The tribunal found no evidence that the new government had destroyed or lost
documents or that the destruction of relevant documents was imminent because of
the existence of the arbitration.194 Accordingly, the tribunal concluded that the
request ‘would place an unfair burden on the Government because of its excessive
breadth and that no need or urgency has been proven to justify the
recommendation.’195
188
Id. at 17.
189
AGIP Spa v. Government of the People’s Republic of the Congo, ICSID Case No. ARB/77/1, 18 January 1979,
reported in the Award of 30 November 1979, 1 ICSID Reports, ¶¶ 7-9 (‘AGIP v. Congo’).
190
Id. ¶ 7.
191
Id. ¶ 9.
192
Biwater Gauff v. Tanzania, Procedural Order No. 1 ¶ 84.
193
Railroad Development v. Guatemala.
194
Id. ¶ 35.
195
Id. ¶ 36.
593
In the context of access to testimonial evidence, the Quiborax v. Bolivia tribunal

found that interim measures were also appropriate when criminal proceedings
impair ‘the access to and integrity of evidence’196 and ‘Claimants’ right to present
their case, in particular with respect to their access to documentary evidence and
witnesses.’197 The claimants’ Bolivian business partner, Mr. Moscoso, who had first
denied participation in the crime of forging documents to support the claimants’
access to ICSID arbitration, ultimately confessed to this crime but only after bail of
USD 300,000 was set on his personal liberty. Once he confessed, he was
immediately pardoned, which suggested to the tribunal that the restriction on his
personal liberty was meant as an intimidation measure and not because the
circumstances of the crime required preventive detention.198 Moreover, since the
ICSID arbitration had been characterized as a harm to Bolivia in the context of
the criminal proceedings, the tribunal was ‘troubled by the effect that the criminal
proceedings may have on potential witnesses’199 and considered that it was unlikely
that the persons charged would feel free to participate as witnesses in the
arbitration.200 For the tribunal, ‘the question of whether a Party has the
opportunity to present its case or rely on the integrity of specific evidence is
essential to (and therefore cannot await) the rendering of an award on the
merits.’201 The tribunal thus ordered Bolivia to take all appropriate measures to
suspend the criminal proceedings on the basis that these proceedings threatened
the procedural integrity of the ICSID proceedings, in particular with respect to
Claimants’ right of access to evidence through potential witnesses.
Similarly, in Chevron v. Ecuador, the claimants asserted that the underlying case in
Ecuador was so politicized that their legal representatives were subject to
harassment, intimidation tactics, and some even to unjustified criminal
proceedings in Ecuador. The tribunal ordered Ecuador ‘to facilitate and not to
discourage, by every appropriate means, the Claimants’ engagement of legal
experts, advisers and representatives from the Ecuadorian legal profession for the
purpose of these arbitration proceedings (at the Claimants’ own expense).’202
(d) Security for Costs
Several investment tribunals have considered interim measures requests for
security for costs, to date without success for the requesting party, specifically the
respondent State every time.
196
Quirobax v. Bolivia ¶ 141.
197
Id. ¶ 142.
198
Id. ¶ 145.
199
Id. ¶ 143.
200
Id. ¶ 146.
201
Id. ¶ 153.
202
Chevron v. Ecuador, Order on Interim Measures,14 May 2010, Point 1(vi). See also Libananco Holdings Co. Ltd. v.
Republic of Turkey, ICSID Case No. ARB/06/8, Decision on Preliminary Issues, 23 June 2008, ¶ 82, point
1.1.2 (‘Libananco v. Turkey’) (restating the tribunal’s 1 May 2008 order requiring the respondent state to
‘permit legal counsel for the Claimant to have access, free from surveillance, to any person within Turkey for
the purposes of preparing or conducting Claimant’s case in this arbitration’).
594
In Maffezini v. Spain, Spain filed a request for interim measures ordering the
claimant to post a guaranty, bond, or similar instrument in the amount of the costs
that Spain expected to incur in defending against the ICSID arbitration.203 Noting
the lack of ICSID precedent,204 the tribunal turned to the language of Rule 39 of
the ICSID Rules (which, together with Article 47 of the ICSID Convention grants
ICSID tribunals the authority to order interim measures) and observed that such
measures are intended to preserve rights that ‘must exist at the time of the request,
must not be hypothetical, nor are ones to be created in the future.’205 The tribunal
considered that Spain’s request for security for costs was premised on two
hypothetical situations: that the claimant would not prevail and that the tribunal
would order the claimant to pay the respondent’s costs and expenses.206 In such
circumstances, the tribunal deemed that it would be improper to prejudge the
claimant’s case by recommending the requested interim measures.207 The tribunal
also considered that Spain’s request did not relate to the subject matter of the case
before the tribunal.208 For all of these reasons, the tribunal dismissed Spain’s
application for interim measures.
Turkey also sought security for costs in Libananco v. Turkey, on the basis that the
claimant was a shell company without assets of its own and therefore unlikely to be
able to meet an eventual award of costs against it.209 In rejecting this argument, the
tribunal noted that it was ‘not aware of any established practice on the part of
ICSID Tribunals in favour of granting security for costs either to a Claimant or to
a Respondent.’210 The tribunal further took the view that ‘it would only be in the
most extreme case – one in which an essential interest of either Party stood in
danger of irreparable damage – that the possibility of granting security for costs
should be entertained at all.’211
In RSM v. Grenada, Grenada filed a request for security for costs against the RSM
claimants, asserting that the issue was not whether the claimants could satisfy a
possible costs award, but whether they were willing to do so.212 Although the
claimants had ‘ample means’ to post the security requested,213 Grenada argued
that the claimants were unwilling to do so, relying principally on RSM’s decision
not to post the required advance on costs in the annulment proceedings that it had
commenced to annul a first ICSID award between the same parties and on the
203
Emilio Agustín Maffezini v. Kingdom of Spain, ICSID Case No. ARB/97/7, Procedural Order No. 2, 28 October
1999 (‘Maffezini v. Spain’).
204
Id. ¶ 4.
205
Id. ¶ 13.
206
Id. ¶¶ 16-18.
207
Id. ¶ 21.
208
Id. ¶¶ 24-25.
209
Libananco v. Turkey ¶ 58.
210
Id. ¶ 57.
211
Id.
212
RSM Production Corp. et al. v. Grenada, ICSID Case No. ARB/10/6, Decision on Respondent’s Application for
Security for Costs, 14 October 2010, ¶ 3.3 (‘RSM v. Grenada’).
213
Id. ¶ 5.22.
595
attempts of RSM’s CEO to place personal assets beyond the reach of his creditors
about 10 years ago.214
After concluding that Article 47 of the ICSID Convention and Rule 39 of the
ICSID Arbitration Rules empowered an ICSID tribunal, in an appropriate case,
to grant interim measures in the nature of security for costs,215 the tribunal
rejected Grenada’s request for security for costs on the basis that Grenada had
failed to prove the claimants’ inability or unwillingness to pay a costs award.216
According to the tribunal, Grenada did not contest the claimants’ ability to pay,
nor did it demonstrate RSM’s unwillingness to pay. RSM had every right not to
continue with its annulment application, and the conduct of RSM’s CEO more
than a decade earlier in unrelated proceedings could not support the conclusion
that the claimants would use every available means to avoid the enforcement of
any potential costs award.217
V. PUTTING INTERIM MEASURES TO USE:

ENFORCEMENT ISSUES
International law generally recognizes the binding nature of provisional measures
awards.218 However, only arbitral ‘awards’ that finally resolve a ‘substantive issue’
between the parties are capable of being recognized and enforced under most
national statutes and international conventions concerning the recognition and
enforcement of arbitral awards. The New York Convention, for example, is silent
regarding the enforceability of ‘interim awards,’ and refers simply to ‘awards.’
Moreover, interim relief necessarily differs from final relief, in that interim
measures may have been granted ex parte or remain subject to revision.219 National
courts, therefore, face numerous considerations in deciding whether and how to
step in concerning the enforcement of interim measures ordered by an
214
Id. ¶ 5.23.
215
Id. ¶ 5.16.
216
Id. ¶ 5.21.
217
Id. ¶ 5.24.
218
See Avena and Other Mexican Nationals (Mex. v. U.S.), Order of Provisional Measures, 2003 I.C.J. 128 (5
February) (‘Avena Provisional Measures Order’); LaGrand Judgment; see also Donald Francis Donovan, ‘The
Scope and Enforceability of Provisional Measures in International Commercial Arbitration: A Survey of
Jurisdictions, the Work of UNCITRAL, and Proposals for Moving Forward,’ in Albert Jan Van den Berg
(ed.), International Commercial Arbitration: Important Contemporary Questions, ICCA Congress ser.
2002, at 82, 146 (Kluwer Law Int’l 2003) (‘Donovan, ‘Scope and Enforceability of Provisional Measures’’)
(‘When an arbitral tribunal orders interim measures, it acts on the same authority by which it renders a final
award. Indeed ... the very purpose of interim measures is to ensure the effectiveness of the final award. It
follows that, if states are prepared to lend their enforcement machinery to the enforcement of final awards,
they should lend it as well to the enforcement of interim measures.’); see also Albert Jan Van den Berg, ‘The
Application of the Convention by the Courts,’ in Improving the Efficiency of Arbitration Agreements and
Awards: 40 Years of Application of the New York Convention, ICCA Congress Series No. 9 (1998), at 25 (‘I
maintain my opinion that an arbitral award providing for interim relief can be enforced under the [New
York] Convention, provided that an arbitral decision providing for interim relief constitutes an arbitral
award at the place of arbitration (i.e., the place of arbitration).’).
219
Donovan, ‘Scope and Enforceability of Provisonal Measures,’ at 142.
596
597
INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT DISPUTES
Hydro S.r.l. & Others
Republic of Albania
(ICSID Case No. ARB/15/28)
DECISION ON
CLAIMANTS’ REQUEST FOR A PARTIAL AWARD
AND
RESPONDENT’S APPLICATION FOR REVOCATION OR MODIFICATION OF
THE ORDER ON PROVISIONAL MEASURES
1 SEPTEMBER 2016
Members of the Tribunal

Dr Michael Pryles AO PBM, President of the Tribunal
Mr Ian Glick QC, Arbitrator
Dr Charles Poncet, Arbitrator
Secretary of the Tribunal

Mr Francisco Abriani
Assistant to the Tribunal

Dr Albert Dinelli
598
ICSID Case No. ARB/15/28
Hydro S.r.l & Ors v Republic of Albania
DECISION ON CLAIMANTS’ REQUEST FOR A PARTIAL AWARD AND RESPONDENT’S APPLICATION FOR
REVOCATION OR MODIFICATION OF THE ORDER ON PROVISIONAL MEASURES
CONTENTS
PART I: INTRODUCTION AND SUMMARY OF DECISION..................................................... 3
Introduction ................................................................................................................................ 3
Summary of Decision .................................................................................................................. 7

PART II: THE PARTIES’ SUBMISSIONS ....................................................................................... 8
The Claimants’ Application ......................................................................................................... 8
The Respondent’s Application................................................................................................... 10
The Claimants’ Reply to the Respondent’s Application.............................................................. 15
The Respondent’s Rejoinder...................................................................................................... 17
The Hearing of 15 June 2016..................................................................................................... 24
The Respondent’s Post-Hearing Submission of 29 June 2016 .................................................... 33
The Claimants’ Post-Hearing Submission of 8 July 2016............................................................ 35
The Opinions of Professor Arben Rakipi and Mr Arben Qeleshi .............................................. 39

PART III: FURTHER DEVELOPMENTS IN THE UNITED KINGDOM .............................. 44
The Judgment of District Judge Tempia .................................................................................... 44
The Parties’ Responses to the Judgment .................................................................................... 47

PART IV: TRIBUNAL’S ANALYSIS ................................................................................................ 49
PART V: TRIBUNAL’S ORDER ...................................................................................................... 56
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PART I: INTRODUCTION AND SUMMARY OF DECISION
Introduction
On 3 March 2016, the Tribunal issued its Order on Provisional Measures (the “Tribunal’s
Order” or the “Order”). In the Order, the Tribunal made the following recommendations
at Part V:
“5.1 The Tribunal recommends that the Republic of Albania:
(a) suspend the proceedings identified as Criminal Proceeding No. 1564

until the issuance of a Final Award in this proceeding; and
(b) take all actions necessary to suspend the extradition proceedings

currently pending as Case Numbers 1502751601 (for Mr. Becchetti)
and 1502752144 (for Mr. De Renzis), until the issuance of a Final
Award in this proceeding.
5.2 The Tribunal invites the Republic of Albania to confer with the
Claimants and seek to agree appropriate measures to be taken by the
Republic of Albania to preserve:
(a) the seized assets and the contents of the frozen bank accounts of
Energji [sh.p.k.], KGE [sh.p.k.], 400 KV [sh.p.k.], Cable System
[sh.p.k.], and Agonset [sh.p.k.]; and
(b) the current shareholdings in those companies.
5.3 In the event that the Republic of Albania and the Claimants are unable
to agree appropriate measures to be taken by the Republic of Albania
within the period of 60 days from the date of this order, the Claimants
may apply to the Tribunal for further provisional measures.”
Shortly after the Tribunal’s Order was issued, on 10 March 2016, the Claimants wrote to
the Respondent requesting confirmation that they had complied, or were going to comply
with, the Tribunal’s Order. The Claimants also proposed the suspension of criminal
proceedings and “the consequential return of the Companies and their assets and bank
accounts” in order to satisfy paragraph 5.2 of the Tribunal’s Order. They sought an answer
by 17 March 2016. The Respondent’s counsel replied indicating that they would take
instructions.
Eight days thereafter, on 18 March 2016, the Claimants again wrote to the Respondent
noting that they had received no response. The Respondent’s counsel replied shortly
thereafter, stating “our clients are still considering the Order of the Tribunal of 3 March
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2016 and the terms of your letter”. The Claimants replied that “Albania’s lack of
engagement is simply not sufficient”, and reiterated its request that the Respondent provide
it with assurances that it would immediately comply with the Tribunal’s Order.
On 21 March 2016, both the Claimants and the Respondent wrote to the Tribunal.
In its letter dated 21 March 2016, the Claimants complained of what it said was “Albania’s
lack of engagement and its refusal to comply with the Tribunal’s Order”. The Claimants
requested, as a matter of urgency, a telephone conference with the Tribunal. The Claimants
further stated that they “reserve[d] the right to seek appropriate measures from the
Tribunal pursuant to paragraph 5.3 of the Order if the matter is not promptly resolved”.
In its letter of 21 March 2016, the Respondent said that it intended to make an application
to the Tribunal pursuant to Rule 39(3) of the ICSID Arbitration Rules to “revoke or
alternatively modify the terms of” the Tribunal’s Order. It stated that the Respondent “fully
reserves its rights in respect of compliance with the Order pending any decision in respect
of such application”.
On 22 March 2016, the Tribunal wrote to the Parties and stated that it did not consider a
telephone conference necessary as neither Party had sought a specific order from the
Tribunal, but it would consider an appropriate procedure for dealing with any such
application if one were to be made.
On 25 March 2016, the Claimants made an Application for a Partial Award, or alternatively
an Order, the contents of which are explained below (the “Claimants’ Application”). The
Tribunal invited the Respondent to reply, and it did so by submitting an Application to
Revoke or Modify the Order on Provisional Measures (the “Respondent’s Application”)
on 5 April 2016.
It is these two applications with which the Tribunal is presently vested.
On 18 April 2016, the Claimants submitted their Reply to the Respondent’s Application
(the “Claimants’ Reply”).
On 10 May 2016, the Respondent submitted its Reply to the Claimants’ Reply (the
“Respondent’s Rejoinder”).
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In the Respondent’s Rejoinder, the Respondent requested that the Tribunal list the present
application for an oral hearing, submitting:
“[Albania] views it as imperative for the fair disposition of this matter that
there be an oral hearing.”1
Further, the Respondent explained:
“The matter is complex and the present application is to be made against

the background of ongoing developments before the English courts. An
oral hearing is therefore the only fair way in which the distorted picture
(of facts and law) that the Claimants appear to be so intent on sowing in
correspondence can adequately be corrected; and will be the most
efficient way of informing the Tribunal of the most up-to-date position.”2
On 13 May 2016, the Tribunal wrote to the Parties informing them that it had determined
to hold a short hearing to deal with both the Claimants’ Application and Respondent’s
Application by teleconference.
On 23 May 2016, the Respondent wrote to the Tribunal requesting that the hearing should
be held in person (rather than by teleconference) and should be listed for a day. The
Respondent cited the following reasons as to why the hearing should be held in person: (i)
the importance of the issues at stake; (ii) the scale and complexity of those issues; and (iii)
fundamental considerations of procedural fairness. The Respondent explained in detail
why an in-person hearing was needed. The Tribunal invited the Claimants to reply, which
they did on 26 May 2016. The Claimants rejected the need for an in-person hearing, and
submitted that the Respondent’s request was “nothing more than another attempt to
further delay compliance with the Tribunal’s Order”.3
On 1 June 2016, the Tribunal wrote to the Parties informing them that it would hold an
in-person hearing on 15 June 2016 in London. The Tribunal noted that Messrs Glick and
Poncet would be present in London, but that the President of the Tribunal would attend
via video-link.
The hearing occurred, as anticipated, on 15 June 2016.
1 Respondent’s Rejoinder, para 16.

2 Ibid.
3 Claimants’ letter of 26 May 2016, para 3.
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On 16 June 2016, the Tribunal wrote to the Parties inviting them to provide brief post-
hearing submissions on issues that remained outstanding from the hearing.
On 27 June 2016, the Respondent wrote to the Tribunal seeking an extension of a day to
submit its post-hearing submissions. That was granted by the Tribunal, and a further day
was granted to the Claimants to submit its reply post-hearing submissions.
The Respondent provided its post-hearing submissions on 29 June 2016, and the Claimants
responded on 8 July 2016.
Later, on the same day (8 July 2016), the Tribunal was provided with the judgment of
District Judge Tempia of the Westminster Magistrates’ Court deciding not to allow the
extradition of Mr Francesco Becchetti and Mr Mauro De Renzis from the United Kingdom
(the “UK”) to Albania (the “Judgment”).
On 11 July 2016, the Tribunal invited the Parties to submit simultaneous submissions
regarding that Judgment by 18 July 2016. The Claimants did so, but the Respondent did
not.
The Respondent requested leave to respond to the Claimants’ submissions, which the
Tribunal granted, but only in respect of responding to the Claimants’ letter, not to the
Judgment itself.
Also on 18 July 2016, the Claimants wrote to the Tribunal informing it that they had
received notification that the Respondent would not appeal the Judgment.
On 22 July 2016, the Respondent submitted a letter which did, in fact, address the
Judgment, rather than confining its comments to the Claimants’ letter of 18 July 2016. The
Tribunal requested an explanation for why the Respondent had filed these comments not
only late, but without leave.
On 23 July 2016, the Respondent wrote that it was genuinely confused by what it was and
was not granted leave to make submissions on by the Tribunal. The Respondent’s counsel
stated that it could not file those submissions simultaneously with the Claimants on 18 July
because instructions were being sought from Albania.
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The Tribunal wrote to the Parties on 24 July 2016 and stated that whilst it did not believe
that its instruction to the Respondent was in any way unclear, it had decided to admit the
Respondent’s letter of 22 July 2016.
At this juncture, it is important for the Tribunal to again emphasise that no submissions
are to be filed in this proceeding without the leave of the Tribunal. The example referred
to in the preceding paragraphs is not the first occasion that this has occurred. Needless to
say, this proceeding is a very complex one, and one that is of critical importance to the
Parties. In order to ensure its efficient disposition, it is necessary for there to be
appropriate procedural rules put in place, and with which compliance is necessary. No
further submissions should be submitted in this proceeding unless they are filed and served
pursuant to procedural directions or leave of the Tribunal. Of course, the Tribunal will
ensure procedural fairness is granted to all Parties, and any application for leave will be
considered on the merits. It is not of any assistance to the Tribunal to receive unsolicited
submissions from the Parties.
From that point, the Tribunal did not accept any further submissions form the Parties,
given that both Parties had been given more than ample opportunity to make submissions
throughout the course of these two applications.
(Further correspondence was exchanged in relation to Interpol red notices, but the content
of that correspondence does not impact on the resolution of the two applications the
subject of this decision.)
Summary of Decision
For the reasons that follow, the Tribunal has determined that the Tribunal’s Order should
be revoked, but only on the basis that it is no longer required in its present form. Instead,
the Tribunal recommends that the Republic of Albania:
(a) take no steps in the proceedings identified as Criminal Proceeding No. 1564 to
recommence extradition proceedings in the UK against Messrs Becchetti and Mr De
Renzis until the issuance of a Final Award in this proceeding; and
(b) take all actions necessary to maintain the suspension of the extradition proceedings
(Case Numbers 1502751601 (for Mr Becchetti) and 1502752144 (for De Renzis))
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currently stayed, and not to take any steps to resume those proceedings, until the
issuance of a Final Award in this proceeding.
As is plain from the reasoning in the Tribunal’s Order, the principal reason for making the
recommendations the subject of paragraph 5.1(a) and 5.1(b) was the potential inability of
Messrs Becchetti and De Renzis to fully participate in the arbitration if they were
incarcerated. But that principal objective for the Tribunal’s recommendations has now
been secured. It matters not that it was secured by the Respondent’s attempt to adjourn
the extradition proceedings sine die, or what has now transpired, namely the suspension by
order of Judge Tempia. The English courts have stayed the extradition of Messrs Becchetti
and De Renzis and that stay should be maintained.
In relation to the preservation of the seized assets, the contents of the various frozen bank
accounts and the current shareholdings in those companies (collectively, the “Assets”),
the Tribunal has determined that no further recommendation should be made. It is
unnecessary to do so in circumstances where, by the Claimants’ Memorial of 13 May 2016
(the “Claimants’ Memorial”), which was filed while the applications the subject of this
decision were pending, it has become apparent that the Claimants no longer seek the return
of the Assets. While the precise factual situation is somewhat unclear, the Tribunal is not
required, nor would it be appropriate, to decide whether the Assets have, in fact been
destroyed or expropriated. Ultimately, if the Claimants succeed in this arbitration, the
Tribunal is presently of the view that any loss or damage to the Assets can be adequately
compensated by an award of damages.
Finally, the Tribunal rejects any entitlement of the Claimants for a penalty against the
Respondent of US$250,000 or otherwise.
The Tribunal now turns to the Parties’ respective submissions.
PART II: THE PARTIES’ SUBMISSIONS
The Claimants’ Application
2.1 The Claimants submitted their Application on 25 March 2016.
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2.2 The Claimants submit that the Respondent has openly defied the authority of the Tribunal
by refusing to comply with the Tribunal’s Order.4 The Claimants further contend that it
is not for the Respondent to decide when, and if, it will comply with the Tribunal’s Order
and that “[i]t is indeed beyond dispute that orders of provisional measures issued pursuant
to Article 47 of the ICSID Convention create a binding ‘legal obligation’ on the parties”.5
The Claimants say that the Tribunal’s Order is immediately binding, and that the
Respondent cannot purport to reserve its rights because it has no rights to reserve. The
Claimants further say that Art 47 does not provide for a vehicle for re-consideration of
substantive decisions of the Tribunal on provisional measures.6
2.3 As a consequence of the Tribunal’s Order, the Claimants also contend that the Respondent
must return control of the companies that are subject to sequestration orders made by the
Albanian prosecutorial authorities and unfreeze those companies’ bank accounts.7 The
Claimants say that the Respondent cannot delay this further on the basis that it is “currently
gathering information in relation to the assets”, as the Respondent stated in its letter of 21 March
2016.8
2.4 Accordingly, the Claimants request a partial award or an order from the Tribunal
addressing the Respondent’s refusal to comply with the Tribunal’s Order. The Claimants
submit that the Tribunal should impose a penalty against the Respondent of
US$250,000.00 for each day of non-compliance, and submits that this Tribunal has the
power to impose such a penalty.9
4 Claimants’ Application, p 1.
5 Ibid, p 2, citing Tokios Tokeles v Ukraine, ICSID Case No. ARB/02/18, Order No. 1 (1 July 2003), CL-9, para
4; City Oriente Limited v Republic of Ecuador and Empresa Estatal Petróleos del Ecuador (Petroecuador), ICSID Case
No. ARB/06/21, Decision on Provisional Measures (19 November 2007), CL-6, paras 52, 92; Burlington
Resources Inc v Republic of Ecuador and Empresa Estatal Petroleos del Ecuador (PetroEcuador), ICSID Case No.
ARB/08/5, Procedural Order No. 1 on Burlington Oriente's Request for Provisional Measures (29 June
2009), CL-7, para 66.
7 Letter from Quinn Emanuel Urqhart & Sullivan to Gowling WLG dated 10 March 2016. Those companies
are said by the Claimants to be 400 KV Sh.p.k, Energji Sh.p.k, Fuqi Sh.p.k, Cable System Sh.p.k and Agonset
Sh.p.k.
9 The Claimants relies on Enron Corporation Ponderosa Assets, LP v Argentine Republic, ICSID Case No. ARB/01/3,
Decision on Jurisdiction (14 January 2004), CL-20, para 79.
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606
2.5 The Claimants also request further provisional measures be made by the Tribunal regarding
the orders made by the Tribunal at paragraph 5.3 of the Order, whereby the Tribunal
invited the Parties to confer and agree as to appropriate steps to be taken by Albania to
preserve the Assets. The further provisional measures the Claimants now request are as
follows:
(a) “Return control of the companies that are subject to the June 5, 2015
sequestration order, i.e. 400 KV Sh.p.k, Cable System Sh.p.k., Energji
Sh.p.k, Fuqi Sh.p.k., and Agonset Sh.p.k. to their shareholders;
(b) Lift the measures of preservation issued against the assets of these
companies;
(c) Unfreeze these companies’ bank accounts as well as those of KGE

Sh.p.k.; and
(d) Suspend the insolvency proceedings commenced against Energji

Sh.p.k.”10
2.6 At this juncture, it should be noted that the Claimants have requested relief in respect of
the company “Fuqi Sh.p.k”, however this company was never contemplated by the
Tribunal’s (original) Order.
The Respondent’s Application
2.7 The Respondent responded to the Claimants’ Application, and submitted its own
Application on 5 April 2016.
2.8 The Respondent submits that the Tribunal’s Order made “unjustified and disproportionate
inroads” upon Albania’s sovereignty.11 The Respondent says that the original relief sought
by the Claimants was “intended to derail” long-running criminal prosecutions brought
against individuals charged with very serious offences, and that against this background
any ICSID Tribunal that was invited to interfere had to do so with the “utmost care”.12
The Respondent says it is appropriate for it to request that the Tribunal reconsider its
Order.
10
Claimants’ Application, p 4.
11 Respondent’s Application, para 4.
12 Ibid, para 5.
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607
2.9 The Respondent says that the Tribunal “plainly” has the power under Rule 39(3) of the
ICSID Arbitration Rules to revoke or modify its recommendations in its order “at any
time”.13 Further, it says that this power is without restriction.14 The Respondent relies on
the dicta of the Tribunal in Victor Pey Casado v Republic of Chile, which said of provisional
measures:
“provisional measures ... can be modified or cancelled at any time by the

Tribunal [and] do not benefit from the force of res judicata”.15
2.10 The Respondent does not dispute the test adopted by the Tribunal in determining whether
or not an interference with the exercise of a State’s sovereign rights is justified. Rather, it
takes issue with the Tribunal’s application of that test in the circumstances.16
2.11 The Respondent contends that the Tribunal did not clearly identify the nature of the right
to procedural integrity, nor provide sufficient reasons as to why the incarceration of
Messrs Becchetti and De Renzis would infringe that right.17 The Respondent concedes that
the right to procedural integrity allows the Tribunal to “police its own process, so as to
ensure the proper functioning of the dispute settlement procedure and the orderly
unfolding of the arbitration process”, but the ability of Messrs Becchetti and De Renzis to
“effectively manag[e] their businesses” (as stated by the Tribunal at paragraph 3.18 of the
Order) is “surely irrelevant”.18
2.12 Indeed, the Respondent submits that the Tribunal’s Order left a number of important
questions unanswered, such as which businesses the Tribunal considered would be affected
by the potential incarceration of Messrs Becchetti and De Renzis and what role they played
in those businesses.19 Similarly, the Respondent submits that the Tribunal’s concerns
regarding Messrs Becchetti and De Renzis’ “full participation” in the arbitration were not
13 Ibid, para 19.

14 Ibid.
15 ICSID Case No ARB/98/2, Decision on Provisional Measures (25 September 2001), CL-12, para 2.
16 Respondent’s Application, paras 24 – 27.
17 Ibid, paras 28, 30.
18 Ibid, paras 32 – 33.
19 Ibid, para 35.
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properly reasoned.20 The Respondent submits that the Tribunal justified its
recommendation to suspend the criminal proceedings against Becchetti and De Renzis on
the basis that the recommendation only “merely postpone[d]” the proceedings, not
cancelled them entirely.21 That is, the Tribunal’s approach is to countenance “any ICSID
claimant fearing arrest to stop local criminal proceedings … provided he makes sure to ask
only for a stay of those proceedings”.22 The Respondent contends that the Tribunal’s
decision in this respect was “out of step” with the “concept of procedural integrity”
adopted in the cases of Quiborax23 and Lao Holdings.24
2.13 Further, the Respondent contends that the Tribunal’s Order did not engage with the
question of whether it had jurisdiction to “step-in” and “short-circuit” the investigation
which the UK courts were themselves undertaking, namely whether extradition was
justified. It followed, so the Respondent contends, that “this Tribunal must have
considered that it (rather than the English court) was the appropriate forum for the
deliberation and determination of the issues raised by the Claimants”.25
2.14 Further, the Respondent submits that the duration of the recommendations by the
Tribunal is “excessive and disproportionate” and there is no reason for the “restraint
imposed by the PMO to last until the Award in this matter”.26
2.15 Notwithstanding these complaints the Respondent says that it has nevertheless “actively
sought to engage with the Tribunal’s recommendations”.27 The Respondent says that its
Minister of Justice wrote to the UK’s Home Office asking that they make an application
20 Ibid, paras 38 – 39. See, esp, para 39 where the Respondent submits that the “Tribunal does not explain what
‘full participation’ is intended to mean; nor why possible incarceration in Albania ‘would’ necessarily prevent
such ‘full participation’; or why a lesser measure was considered inappropriate by the Tribunal”. Other
criticisms follow on in paras 40 – 44 of the Respondent’s Application.
21 Ibid, para 44.
22 Ibid.
23 Quiborax SA, Non Metallic Minerals SA & Allan Fosk Kaplún v Plurinational State of Bolivia, ICSID Case No.
ARB/06/2, Decision on Provisional Measures (26 February 2010), CL-5; Respondent’s Application, para 47.
24 Lao Holdings NV v Lao People’s Democratic Republic, ICSID Case No. ARB (AF)/12/6, Ruling on Motion to
Amend the Provisional Order (30 May 2014), CL-8; Respondent’s Application para 47.
25 Respondent’s Application, para 50.
26 Ibid, para 52.
27 Ibid, para 9.
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609
to the UK courts that the extradition proceedings against Messrs Becchetti and De Renzis
be adjourned sine die.28 In this regard, the Respondent said that (at that stage) it fully
expected that the adjournment would be granted by the UK courts, and that, accordingly,
compliance with paragraph 5.1(b) of the Tribunal’s Order would be secured.29 The
Respondent says that even if Messrs Becchetti and De Renzis were to appear before an
Albanian Court, Albanian prosecutors would not seek to remand them in custody and
would not oppose bail on “reasonable bail conditions”.30 These assurances, according to
the Respondent, amount to a “guarantee” that Messrs Becchetti and De Renzis would not
be jailed.31 This should be sufficient to satisfy the Tribunal’s Order, according to the
Respondent, because anything more (namely, suspension of the criminal proceeding) was
not permitted by Albanian criminal procedure.32
2.16 Alternatively, in these circumstances, the Respondent contends that it would be open to
the Tribunal to find that the steps taken by the Respondent provide a compelling basis for
the revocation of the Tribunal’s Order. This is because, the Respondent submits, the
perceived risk that either Messrs Becchetti or De Renzis would not be able to participate
in the arbitration by virtue of their prospective imprisonment disappears,33 and there is no
“separate basis” on which suspension ought to continue to be recommended by the
Tribunal.34
2.17 As to the Claimants’ Application, the Respondent says that, in respect of the criminal
proceedings against Messrs Becchetti and De Renzis, if the Tribunal accepts its arguments
regarding the revocation or modification of paragraph 5.1 of the Order, then the Claimants’
application for relief in the form of a partial award must (at least partially) fall away.35 Even
28 Ibid, para 11.

29 Ibid, para 12.
30 Ibid, para 13.
31 Ibid, para 15.
32 Ibid, para 16.
33 Ibid, para 18.
34 Ibid, para 59.
35 Ibid, para 64.
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if the Tribunal is not minded to revoke or modify paragraph 5.1 of its Order, the
Respondent says there is no proper basis to grant the Claimants the relief they seek.
2.18 First, the Respondent submits that there is no power for the Tribunal to grant a “partial”
award under the ICSID Convention or the Arbitration Rules.36
2.19 Second, the Respondent says that the Claimants’ request for US$250,000.00 per day as a
penalty for non-compliance is misconceived. It says that, as a matter of principle, such
relief can only be granted when there is loss suffered by the Claimants by virtue of any
alleged breach of Art 47 of the ICSID Convention.37 The Respondent says that the
Claimants have provided no evidence of loss and in any event the Tribunal could not make
such a finding on an “interim” basis (that is, without a trial).38 The Respondent submits
that the measures it has taken to seek an adjournment of the extradition proceedings sine
die means that the monetary relief sought is wholly unnecessary.
2.20 As for the relief the subject of paragraph 5.2 of the Order, the Respondent submits that it
is continuing to engage with the Claimants on seeking to preserve the Assets.39 At that
time, it was quite apparent from both Parties’ submissions that they disagreed on measures
required to be taken by the Respondent under that paragraph of the Order, and that they
were thus unable to agree in any substantial respect. Nevertheless, the Respondent submits
that the exchanges of correspondence that occurred between the Parties’ practitioners
between 10 March 2016 to 21 March 2016 show that the Respondent was prepared to
engage in good faith in negotiations with the Claimants as to the best way to preserve the
Assets.40 As the Tribunal had allowed the Parties 60 days to come to an agreement in this
respect, a date which (as at the date of both the Claimants’ and the Respondent’s
Applications), had not yet elapsed, the Claimants’ Application was, in this regard,
premature.41 Further, the Respondent pointed to the fact that it was continuing to gather
36 Ibid, para 66.

37 Ibid, para 71.
38 Ibid, para 71.
39 Ibid, para 72.
40 Ibid, para 83(a).
41 Ibid, para 85.
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611
information from the Albanian authority in charge of administering the Assets as to

whether or not the Claimants’ proposals could be met.42
The Claimants’ Reply to the Respondent’s Application
2.21 On 18 April 2016, the Claimants submitted their Reply to the Respondent’s Application,
and its comments on the Respondent’s Response.
2.22 The Claimants say that the Respondent’s Application should be denied on a summary
basis, because it has not met the requirements that such an application must meet to
succeed.43
2.23 First, they say that the Respondent’s Application is a challenge of the Tribunal’s Order,
not a “bona fide request for revocation or modification”.44 The Claimants submit that such
a challenge is essentially an appeal against the Tribunal’s Order, where there is no right to
appeal or re-consideration under the ICSID Convention.45 In this regard, the Claimants
rely on various decisions, including the recent decision of an ICSID Tribunal in
ConocoPhillips v Venezuela on an application for re-consideration.46 The Claimants submit
that the power must be “found to exist” before it can be exercised, which in this case, it
cannot.47 The Claimants submit that Rule 39(3) of the Arbitration Rules does not allow for
re-consideration – it only permits revocation or modification when there are changed
circumstances that justify amending the relief originally ordered.48
2.24 Second, the Claimants say that the Respondent cannot satisfy the requirement discussed
above that there must be “changed circumstances”.49 The Claimants submit that Albania’s
request that the extradition proceedings be adjourned sine die in the UK courts does not
42 Ibid, para 87.

43 Claimants’ Response, p 2.
44 Ibid, p 3.
45 Ibid.
46 ConocoPhillips Petrozuata B.V. v Bolivarian Republic of Venezuela, ICSID Case No ARB/07/30, Decision on the
Respondent’s Request for Reconsideration (9 February 2016), CL-21.
47 Claimants’ Response, p 4.
48 Ibid.
49 Ibid, p 5.
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612
form a “changed circumstance”. It says that the mere postponement of the extradition
proceedings with similar bail conditions in place for Messrs Becchetti and De Renzis would
still mean that they would be subject to a curfew and unable to leave the UK.50
2.25 The Claimants further say that the Respondent’s claim that it is unable to withdraw the
extradition (as a matter of Albanian law) is extraordinary, describing it as “no more than a
belated attempt to pay lip service to the Order while continuing to ignore it”.51 The
Claimants point to the fact that not once since the Claimants sought orders suspending the
Albanian criminal proceedings against Messrs Becchetti and De Renzis did the Respondent
indicate that its domestic criminal laws prevented it from doing so, until now.52
2.26 Third, the Claimants say that the promise by the Respondent to impose “reasonable bail
conditions” on Messrs Becchetti and De Renzis is of no comfort to the Claimants,
contending that “when the Claimants are in Albania the Government can flout the
Tribunal’s orders, and by the time measures are taken to restrain Albania, the damage to
the Claimants’ rights will have been done”.53
2.27 The Claimants also contend that the Respondent’s Application should be denied because
it has not explained why revocation or modification of the Tribunal’s Order is urgent or
necessary. The Respondent relies on a passage by the ICSID tribunal in the Lao Holdings
where it was stated that a revocation “has to be based on changed circumstances, which
make it urgent and necessary to adopt a new decision on provisional measures”.54 The
Claimants instead say that the circumstances show that it is urgent and necessary to keep
in place the existing order, because: (i) Albania has indicated that it may reignite the
extradition proceedings if the Tribunal’s order is revoked; and (ii) the procedural integrity
of the arbitration is still affected by the criminal proceedings and the seizure of the
Claimants’ investments.55
50 Ibid, p 6.
51 Ibid.
52 Ibid.
53 Ibid, p 7.
54 Lao Holdings N.V. v. Lao People’s Democratic Republic, ICSID Case No. ARB(AF)/12/6, Ruling on Motion to
Amend the Provisional Order (30 May 2014), CL-8, para 9.
55 Claimants’ Reply, p 8.
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2.28 Further, in their Reply, the Claimants press their request for a Partial Award or Order. The
Claimants say that the requested relief (which was the subject of the Tribunal’s Order)
continues to be urgent and necessary (as does the relief sought in its new Application),
especially where a number of months have passed since the making of the Tribunal’s Order
with what the Claimants say has been no attempt by the Respondent to comply.56
The Claimants reject the Respondent’s contentions that it cannot withdraw, suspend or
stay the criminal proceedings, arrest warrants or extradition requests under Albanian law,
and point to different Albanian statutes which would allow such actions to occur on the
part of the Respondent.57 Furthermore, the Claimants reiterate that their request for relief
in the form of a monetary penalty against the Respondent for non-compliance is
proportionate, and only this kind of penalty will “seemingly compel compliance with this
binding Order”.58 The Claimants further reject the Respondent’s contention that the
Tribunal is unable to render a “Partial Award”, because there is nothing in the ICSID
Convention preventing it.59 Finally, the Claimants say that, if the relief it seeks in its
Application with respect to the Assets is granted by the Tribunal, it would provide an
undertaking not to sell its shareholding in the relevant companies, to move any physical
assets outside of Albania, and they would simply manage the relevant companies “in the
ordinary course of business”.60
The Respondent’s Rejoinder
2.29 The Respondent submitted its rejoinder on 10 May 2016. In it, the Respondent reiterates
and elaborates on many of the points made in its Application.
2.30 At the outset, the Respondent informed the Tribunal that the UK court had refused to
adjourn the extradition proceedings of Messrs Becchetti and De Renzis sine die.
2.31 Nevertheless, the Respondent submits that, far from the Claimants’ assertion that it had
ignored the Tribunal’s Order, it was the Respondent who was seeking to constructively
56 Ibid.
57 Ibid, p 9.
58 Ibid, p 11.
59 Ibid, p 12.
60 Ibid.
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engage with the Claimants.61 The Respondent submits that it is the Claimants who have
ignored the Tribunal’s Order by making an “aggressive, unreasonable and hasty”
application for a Partial Award, more than a month before the expiry of the 60-day period
prescribed by the Order for the Parties to discuss the protection of the Assets.62
2.32 The primary position taken by the Respondent in its Rejoinder is that there is no need for
“changed circumstances” (as suggested is required by the Claimant) in order for the
Tribunal to exercise its power to revoke or modify the award pursuant to Rule 39(3) of the
Arbitration Rules.63 The Respondent submits that “the Tribunal remains the master of its
own process and is able to modify or revoke the PMO in light of further submissions made
by the Parties about the reasoning adopted in it or indeed of its own motion”.64 The
Respondent says that there is no requirement in the text of Rule 39(3) that there be a
change of circumstances;65 the Tribunal’s discretion under Rule 39(3) is “wholly
untrammelled” because of the juridical nature of an order for Provisional Measures, which
(in contrast to a Final Award) does not carry the force of res judicata.66
2.33 Further, the Respondent challenges the legal authorities cited by the Claimants in their
Response.
2.34 The Respondent says that the Claimants’ reliance on the Lao Holdings case to import the
requirement of “changed circumstances” is flawed because, in that case, the Tribunal
proceeded on the basis of an express concession by the respondent State that it had to
establish a change of circumstances in order for the provisional measures order to be
modified. That is, put another way, neither party disputed that a change of circumstances
was actually required.67

62 Ibid.
63 Ibid, para 19.
64 Ibid.
65 Ibid, para 21.
66 Ibid, para 20.
67 Ibid, para 24.
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2.35 The Respondent also challenges the Claimants’ reliance on the ConocoPhillips case because
that case dealt with a request for re-consideration of a final award, not an order for
provisional measures.68 The Respondent submits that there is a clear difference between
asking a Tribunal to re-visit a binding and final decision, and a party seeking revocation or
modification of an interim order (and the Tribunal must be scrupulous in order not to pre-
judge the merits of the case itself).69
2.36 Moving beyond the question of whether “changed circumstances” are required, the
Respondent submits that there are nevertheless other “legal difficulties” with the Tribunal’s
reasoning in the Order.
2.37 First, the Respondent submits that it was “difficult to see how” the management of
Messrs Becchetti and De Renzis’ businesses (or, more accurately, the inability to manage
those businesses) imperilled the procedural integrity of the arbitration, or, even assuming
it did, how such inability could do so in a manner sufficient to make it absolutely necessary
to grant provisional measures.70
2.38 Second, insofar as the Tribunal’s reasoning for the Order was based on the justification
that incarceration of Messrs Becchetti and De Renzis would prevent them from “fully
participating” in the arbitration, and imperilling their right to procedural integrity,
the Respondent submits that the reasoning was not fully explained in the Order, and
therefore cannot be properly justified.71 Specifically, it points to five criticisms:
(a) The Tribunal did not provide an explanation for the concept of “full participation” in
the arbitration, nor make any findings to suggest that full participation was being
imperilled.72
68 Ibid, para 27. The difference, the Respondent says, between cases such as ConocoPhillips and the present is
that final awards carried with them the force of res judicata.
70 Ibid, para 30(1).
72 Ibid, para 30(2)(a).
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(b) The Tribunal stated that provisional measures must be “absolutely necessary” but did
not explain why the potential incarceration of Messrs Becchetti and De Renzis made
it so.73
(c) The Tribunal’s reasoning that the criminal allegations against Messrs Becchetti and
De Renzis were not divorced from the Claimants’ investments and that the criminal
proceedings that relate to the arbitration did not provide a valid justification for the
Order.74
(d) The Tribunal’s reasoning that the Order was justified because the interference into
Albania’s sovereign rights is “temporary” is not a satisfactory justification where the
test of provisional measures needing to be “absolutely necessary” is properly to be
applied.75
(e) The Order did not explain why it was appropriate to “cut across” the extradition
proceedings before the UK courts, and before a ruling by that court had been made.76
2.39 While the Claimants stated that Albania cannot “re-argue” the arguments ventilated before
the Order,77 the Respondent says that it is not seeking to “re-argue” them, but rather it
“has made submissions in response to the reasoning adopted by the Tribunal in the PMO,
which Albania obviously only saw for the first time once the PMO was issued”.78
2.40 The Respondent further says that if, contrary to its primary submissions, the Tribunal is
not minded to modify or revoke the Order, then any provisional measure should last only
until the end of the final hearing, or, at the latest, the date of post-hearing briefs and not
until the date of the Final Award.79 This submission is premised on the fact that there is
nothing about which Messrs Becchetti and De Renzis need to instruct their counsel after
73 Ibid, para 30(2)(b).

74 Ibid, para 30(2)(c).
75 Ibid, para 30(2)(d).
76 Ibid, para 30(2)(e).
77 Ibid, para 31.
78 Ibid.
79 Ibid, para 37.
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the final hearing. Indeed, the post-hearing submissions do not require their input to
analyse legal argument and oral and written evidence has already been submitted.80
2.41 Further, the Respondent criticises the Order as being “unprecedented” in nature, and that
it carries with it radical and extraordinary implications.81 For that reason, the Respondent
submits that the Tribunal “ought in principle be ready to reflect upon the validity of its
reasoning and conclusions”, and “it remains incumbent upon the Tribunal to subject its
unprecedented recommendations to close and continuing scrutiny”.82
2.42 The Respondent says that, if the Tribunal is not minded to review the validity of its Order
on the basis of the legal difficulties it presented (and which are summarised above), then
the Tribunal should modify or revoke the Order owing to changed circumstances.83
2.43 That changed circumstance is the decision of the Westminster Magistrates’ Court in the
UK where the Home Office’s application to adjourn the extradition proceedings involving
Messrs Becchetti and De Renzis sine die was rejected. The Respondent has submitted that
it is “clear that the attitude of the English court is that the only way the English proceedings
can be ‘suspended’ is in fact for them to be entirely withdrawn”.84 In that regard, the
Respondent says that the withdrawal of the extradition proceedings is not what the Order
required, and Albania had attempted in good faith to comply with the Tribunal’s order to
“suspend” the extradition proceedings by requesting the sine die adjournment.85
2.44 In this regard, the Respondent again points to the fact that there is no provision of
Albanian law that allows the Minister of Justice to withdraw an extradition request once
made, and that, the issuance of arrest warrants gives rise to an obligation on the Albanian
authorities to execute that arrest warrant.86 Art 504 of the Albanian Code of Criminal
Procedure provides the power for the Albanian Minister of Justice to request the
80 Ibid.
81 Ibid, para 38.
82 Ibid, para 38(1) & (2).
83 Ibid, para 40.
84 Ibid, para 44.
85 Ibid, paras 54, 57.
86 Ibid, para 58.
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extradition of a person from a foreign state. But the Respondent submits, contrary to what
the Claimants said, this does not give the Minister of Justice a discretion to withdraw an
extradition request.87 In essence, the Respondent says that, in the absence of something
that prevents the extradition proceedings to continue, as a matter of Albanian or
international law, then there is no unfettered discretion for the Minister of Justice to simply
withdraw the request.88 While the Tribunal’s Order does give rise to an obligation on
Albania under international law, the Respondent submits the ICSID Convention does not
prescribe any mechanism for the Order to be recognised or enforced in Albanian law.89 It
follows that the Tribunal’s Order cannot affect the validity of the extradition request as a
matter of Albanian law, leaving no discretion for the Minister of Justice to withdraw that
request.
2.45 In all of these circumstances, and in what the Respondent explains is an attempt to address
the concerns of the Tribunal, Albania offers a guarantee that if Messrs Becchetti and De
Renzis were extradited to Albania, then Albanian prosecutors would not seek that they be
remanded in custody, but instead be released on “reasonable bail conditions”.90 This offer
had been made by the Albanian Minister of Justice to the UK Home Office.91 The effect
would be that, upon arriving in Albania, Messrs Becchetti and De Renzis would spend a
maximum of three days in custody before being brought before a court, where the
prosecutor would ask the Albanian court to impose bail conditions which would allow
Messrs Becchetti and De Renzis to be released from custody.92 The Respondent says that
the prosecutor is obliged to follow the guarantee given by the Minister of Justice and “must
ask the Court to replace the existing security measures with the reduced security measures
of reasonable bail”.93 It follows that there is no risk that the Albanian court would not
release Messrs Becchetti and De Renzis on bail, because Art 244(3) of the Albanian Code

88 Ibid, para 62.
89 Ibid, para 63.
91 Letter from the Albanian Minister of Justice to the UK Home Office (5 April 2016) (R-0010).
93 Ibid.
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of Criminal Procedure provides that “the court cannot assign a remand order more severe
than the one applied for by the prosecutor”.94
2.46 In response to the Claimants’ position that the Claimants cannot now rely on the
undertaking given by Albania, the Respondent says that when the Claimants originally
sought provisional measures, they did not suggest that “Albania could not be trusted to
comply with a tribunal’s order or undertaking”. The Respondent asserts that the Claimants
have changed their position and that the Tribunal should consider the credibility of the
Claimants’ avowed concerns about needing to be able to attend to their businesses in
Albania. They add that it is now clear that neither Mr Becchetti nor Mr De Renzis intend
to travel to Albania to attend to their investments, so the basis for the provisional order,
by the Claimants’ own admission, falls away. 95
2.47 As to what it had previously described as an “inability” to comply with the Tribunal’s
recommendation to suspend domestic criminal proceedings,96 the Respondent contends
that, under Albanian law, criminal proceedings as a whole cannot be suspended.97 It points
to Art 342 of the Code of Criminal Procedure which provides for uninterrupted criminal trials
to be one of the main features for the conduct of criminal trials in Albania.98 While the
Respondent concedes that Art 343 of the Code provides for suspension, it only does so
when the criminal case is dependent on the resolution of a civil proceeding or
administrative dispute.99 To the contrary, there is no dependency between this arbitration
and the criminal proceedings against Messrs Becchetti and De Renzis.100 The Respondent
further says that any intervention by the Government in court processes is forbidden under
the Albanian Constitution, so the Albanian Government, as much as it may wish to comply
94 Ibid, para 48.

95 Ibid.
96 In paragraphs 68 – 81 of its Rejoinder.
98 Ibid.
99 Ibid, para 71.
100 Ibid.
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with the Order, cannot request either the Albanian court, or its prosecutors, to suspend
the criminal proceedings.101
2.48 Finally, the Respondent notes that although the domestic arrest warrants against
Messrs Becchetti and De Renzis were not recommended to be withdrawn or suspended
by the Tribunal’s Order, the Respondent says that it could not do so under Albanian law.102
The Respondent says that, pursuant to Art 260(2) of the Code of Criminal Procedure, arrest
warrants can only be modified or revoked when “security needs are lowered”.103 The
Respondent submits that “security needs” have not lowered because Messrs Becchetti and
De Renzis are “actively evading the justice of the Albania courts”.104
2.49 In all of these circumstances, the Respondent says that the “disappearance of any threat of
incarceration” justifies the revocation of the Tribunal’s Order, and the fact that the
domestic criminal proceedings have not been suspended does not justify the continuation
of the Order. Those criminal proceedings do not pose a threat to the liberty of
Messrs Becchetti and De Renzis.105
The Hearing of 15 June 2016
2.50 At the Hearing, the Respondent was invited to make its submissions first, followed by the
Claimant. Messrs Toby Landau QC and Siddarth Dhar made submissions on behalf of the
Respondent, and Mr Phillipe Pinsolle and Mr Christopher Tahbaz for the Claimants.
Messrs Ben Brandon and Julian Knowles QC, respectively counsel for the Respondent and
Claimants in the UK extradition proceedings, were also present and assisted the Tribunal
on occasion during the hearing.
The Respondent’s oral submissions
2.51 The Respondent submitted that the Claimants had attempted to paint the Respondent’s
Application as acting in bad faith, and “seeking to run away” from the Tribunal’s Order,
101 Ibid.
102 Ibid, para 76.
103 Ibid, para 77.
104 Ibid, para 78.
105 Ibid, para 83.
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neither of which were true.106 Rather, there was no element of bad faith in asking the
Tribunal to exercise a power that it has as a matter of the ICSID Rules.107 The Respondent
further submitted that it has in good faith tried to comply with the Tribunal’s order.108 The
Respondent rejected any notion by the Claimants that the request for an adjournment of
the extradition proceedings was for a “tactical reason” to prolong the bail conditions of
Messrs Becchetti and De Renzis.109 The Respondent further submitted that Albania has
not acted in bad faith in failing to suspend the criminal proceedings against Messrs
Becchetti and De Renzis in Albania because there have been great efforts to accommodate
what the Respondent says is an “unprecedented” and “extraordinary” order in a domestic
legal system.110 The Respondent further pointed out that, while it has tried to accommodate
the Tribunal’s Order, the continuance, or more accurately, existence, of the criminal
proceedings in Albania has posed no difficulty to the Claimants whatsoever (i.e. those
proceedings have not stopped them in any way from doing anything in this arbitration).111
The Respondent also pointed to the fact that the Claimants filed an extensive memorial
submission on 13 May 2016 as an example of their ability to engage in the arbitral
proceeding.112
2.52 On the issue of changed circumstances, the Respondent added a new changed
circumstance that would justify (at least in part) the revocation of the Order – according
to the Claimants’ Memorial of 13 May 2016, all of the Assets in Albania had been fully
expropriated.113 So the Respondent said that, at least in respect of the Order that dealt with
the Claimants’ businesses, and any concern about running those businesses, that forms a
changed circumstance.114
106 T6.1-2.
107 T7.9 – 10.
108 For instance, the application to adjourn sine die the extradition proceedings, T8.20.
109 T9.19 – T10.4.
110 T12.22 – T13.11.
111 T13.16 – 23.
112 T13.24 – 25.
113 T21.6 – 10.
114 T21.17 – 20.
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2.53 The Respondent, at the request of the Tribunal, made submissions regarding the
undertaking given by the Albanian Minister for Justice not to seek to remand
Messrs Becchetti and De Renzis in custody in Albania, which had been given the UK
extradition proceedings. The Respondent confirmed that it was an undertaking given by
Albania to the UK, specifically the UK Home Office.115
2.54 The Respondent submitted that if the Tribunal did not agree that it should revoke its Order
without changed circumstances, and those changed circumstances concerned an
undertaking given by the Albanian Minister for Justice not to incarcerate Messrs Becchetti
and De Renzis, then it would be open to the Tribunal to outline what it required to “have
confidence and comfort” in revoking or modifying the Order.116
2.55 When asked to deal with the difficulty that might arise with the ability for Messrs Becchetti
and De Renzis to properly prosecute this arbitration if they were sitting in a jail cell in
Albania, counsel for the Respondent submitted that “the criminal proceedings going ahead
in Albania themselves will have no impact on the ability to prosecute this arbitration on
any view”.117 Counsel for the Respondent then pointed out that, despite the pendency and
even continuation of those criminal proceedings in Albania, the Claimants had managed
to file their Memorial of 13 May without difficulty.118 In answer to the proposition that
Messrs Becchetti and De Renzis are not currently in jail, and thus it is unsurprising that
they have been able to properly prosecute their claims in this arbitration to date,119 counsel
submitted that “the criminal proceedings [in Albania] can continue and the extradition
proceedings could be stopped. The two may depend on each other, but they are not both
necessary”.120 Counsel for the Respondent further explained that “the Tribunal could have
made an order which was simply focused upon the extradition proceedings, not the
criminal proceedings”.121 On that basis, the Respondent submitted that there was “no
justification, in terms of procedural integrity, to stop the domestic criminal proceedings in
115 T26.12 – 16.

116 T29.23 – T30.9.
117 T37.4 – 6.
118 T37.10 – 24.
119 T38.5 – 11.
120 T38.20 – 23.
121 T39.22 – 24.
Page 26
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Albania”,122 and all that was required from the Tribunal was an order suspending the
extradition proceedings.123 In relation to the hypothetical scenario that Messrs Becchetti
and De Renzis could go to a third state and Albania could then seek extradition from that
third state,124 counsel explained that “the idea that every extradition process around the
world can be suspended on this basis, that there can be an incursion of sovereignty of that
extent, is totally unprecedented and takes away all the discretions that are built into the
system for each country to consider itself how it proceeds”.125
2.56 The Respondent’s position was that the undertaking Albania was prepared to offer was
essentially the same undertaking that was made by the Albanian Minister for Justice in the
extradition proceedings.126 Having been questioned by the Tribunal on this issue, counsel
for the Respondent requested an opportunity to provide further written submissions on
this particular issue so as to not misconstrue Albanian law.127
2.57 As to the Claimants’ application, the Respondent submitted that the Tribunal should not
make the order sought by the Claimants.128 The Respondent submitted that, amongst other
things, there was no need to grant the application where Albania has been making good
faith attempts to implement the Tribunal’s Order.129 The Respondent submitted that the
question that had to be asked by the Tribunal when considering whether or not to grant
the Claimants’ application was “ha[s Albania] acted in bad faith such that [the Tribunal]
should warrant now this extraordinary penal order?”.130 The Respondent submitted that in
circumstances where Albania has been “trying to work with the Tribunal … this is not a
122 T40.16 – 18.

123 T41.3 – 6.
124 T41.21 – T41.13.
125 T42.18 – 24.
126 T126.10 – 25.
127 T124.25 – T125.8.
128 From T48.17 ff.
129 T50.8 – 17.
130 T54.11 – 13.
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situation where it is now appropriate to slap an order or decision on [Albania] to say that
[Albania is] in breach, with a day-by-day penalty”.131
2.58 The Respondent also addressed the Tribunal regarding the orders sought by the Claimants
in respect of the Assets. In this regard, the Respondent emphasised that the Tribunal had
invited Albania to confer with the Claimants and “seek to agree appropriate measures to
be taken by the Republic of Albania” to preserve the Assets.132 The Respondent said the
relief sought by the Claimants in this respect should be dismissed for three reasons.
2.59 First, the Respondent said that the basis of the Claimants’ application, which was that the
Respondent had not engaged with the Claimants’ proposals to “preserve” the Assets, was
misconceived.133 The Respondent referred the Tribunal to correspondence between the
Parties which it said demonstrated otherwise.134 That correspondence, the Respondent
submitted, showed that the Respondent’s counsel was still receiving instructions as to how
to address the Claimants’ “precise concerns” regarding the preservation of Assets.135 The
Respondent also submitted that the Claimants’ application was premature, because the
Tribunal’s Order prescribed a 60-day time limit in which the Parties were to confer and
agree, which had not expired by the time the Claimants’ Application was made.136
2.60 Second, the Respondent submitted that Albania had “done everything necessary to
comply” with the terms of the Tribunal’s directions at paragraphs 5.2 and 5.3 of its
Order.137 The Respondent submitted that “there is no allegation that shareholdings have
been diluted; there is no allegation that bank accounts have been dissipated; there is no
allegation that assets have been left in a warehouse to rot”, and thus, when considering the
131 T54.22 – T55.05.

132 Tribunal’s Order, para 5.2.
133 T57.7 – 11.
134 T57.12 – 14.
135 T60.10 – 13.
136 T57.14 – 21.
137 T58.5 – 7, T58.15 – 16.
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precise terms of paragraph 5.2 of the Order, it could not be said that Albania has breached
that order.138
2.61 Third, the Respondent contended that, even if the Tribunal did not accept that the
Respondent had complied with paragraphs 5.2 and 5.3 of its Order, then the Claimants
have stated in their recently-filed Memorial that those Assets no longer exist,139 so there
could be no urgency supporting the grant of provisional measures to protect them.
The Claimants’ oral submissions
2.62 The Claimants submitted that the Respondent’s characterisation of the issue before the
Tribunal as being a question of whether or not the Respondent had acted in bad faith or
good faith was not relevant, and that the question of good faith was not the test to be
applied by the Tribunal.140 Rather, what is required to be examined is compliance with the
Tribunal’s Order, which is what the Claimants submitted their Application was predicated
upon.141
2.63 The Claimants submitted during their opening that they were now seeking an
indemnification for the Assets, some of which had now been expropriated and could not
be returned.142 When asked to clarify their position regarding the relief sought, the
Claimants confirmed that they were seeking full compensation in the merits aspect of this
arbitration, but also a penalty against the Respondent for non-compliance with the
Tribunal’s Order.143 The Claimants confirmed that the penalty and the award of damages
it sought would be “in parallel”, so that the penalty would be deducted from the calculation
of damages (presumably, so as not to receive double compensation, or a pecuniary penalty,
as the case may be).144
138 T61.16 – 22.

139 T59.12 – 15.
140 T65.21 – T66.1.
141 Ibid.
142 T66.11 – 12.
143 See the exchange at T67.5 – 20.
144 T67.21 – 23.
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2.64 The Claimants also addressed the Tribunal on the Respondent’s compliance with the
suspension of the extradition proceedings. The Claimants submitted that UK Magistrates’
Court had not been inclined to grant the Home Office’s application to adjourn sine die
because it did not wish to leave the matter “in limbo”.145 As at the stage of the oral hearing,
the Parties informed the Tribunal that the judgment of Judge Tempia as to the extradition
application of Messrs Becchetti and De Renzis was expected to be delivered on 8 July 2016.
2.65 Counsel for the Claimants also made submissions regarding two documents relating to the
conditions of Albanian prisons that were submitted to the Tribunal, without leave, on 10
June 2016.146 The Tribunal decided against admitting these documents and, as such, it is
unnecessary to dwell on these submissions further.
2.66 The Claimants addressed the Respondent’s contention that there was no mechanism
under Albanian law by which to suspend the Albanian criminal proceedings, contending
that in the extradition proceedings before Judge Tempia, the Claimants had tendered an
expert report of an expert in Albanian law which demonstrated that the Albanian Minister
for Justice does have a discretion to suspend an extradition request.147 The Tribunal noted
that whilst that report was not in evidence in this arbitration, the question of whether or
not the Albanian minister can suspend the extradition request was likely to be a question
answered by Judge Tempia.148 Mr Brandon, Albania’s counsel in the extradition
proceedings, agreed that those were the questions that Judge Tempia would decide, but
said that they would not necessarily be decided on 8 July 2016, when judgment from that
court was expected.149
2.67 The Claimants also made submissions regarding the difficulties they perceived in relation
to the undertaking given by the Albanian Minister of Justice to the Home Office (and
presumably, any similar undertaking to the Tribunal) not to imprison Messrs Becchetti and
De Renzis. In this regard, the Claimants emphasised paragraphs 46 to 48 of the
Respondent’s Rejoinder, and specifically on the word “ask” (i.e. that the Albanian
145 T72.16 – 21.

146 Those submissions appear at T78.6 – T80.23.
147 T81.13 – 24.
148 T83.2 – 11.
149 T83.14 – 20.
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authorities would ask the Albanian courts not to imprison Messrs Becchetti and De
Renzis).150 The Claimants further submitted that “reasonable bail conditions” quoted in
the Albanian Minister’s undertaking was an “abstract concept”, and that it is not known
what an Albanian court might regard as “reasonable bail conditions”.151 When pressed by
the Tribunal as to whether or not the Claimants would ever accept any undertaking given
by the Respondent as acceptable, the Claimants submitted that it would not “rule out this
possibility”.152
2.68 The Claimants then turned to the Respondent’s Application more generally. They
contended that it was nothing more than an interlocutory appeal.153 An appeal of this
nature is not authorised under the ICSID Convention, nor the Arbitration Rules.154 The
Claimants pointed out that “Albania had a full and fair opportunity to participate [in the
hearing on provisional measures], where there were hundreds of pages of written
submissions, where Albania was represented by its choice of counsel, during a hearing to
which it agreed”.155 The Claimants submitted that Albania’s dissatisfaction with the
Tribunal’s reasoning was not a basis to “re-open issues that this Tribunal has fully
considered and decided”.156
2.69 The Claimants conceded that the ICSID Convention and the Rules are each silent as to
the circumstances under which an application for revocation or modification can be made,
but submitted that, contrary to the Respondent’s submission that it is incumbent upon the
Tribunal to subject its Order to continuing scrutiny, there must be changed circumstances
in order to allow a consideration of revocation or modification.157
2.70 Accepting that changed circumstances are required to allow revocation or modification of
the Tribunal’s Order, the Claimants contended that there were no changed circumstances
150 T85.7 – 17.

151 T88.5 – 9.
152 T91.9 – 12.
153 T93.3 – 7.
154 T93.14 – 16.
155 T94.3 – 7.
156 T95.20 – 22.
157 T96.2 – 7, T97.3 – 5, T98.21 – T99.3.
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in this case, nor was it necessary or urgent to modify or revoke the Order.158 The Claimants
submitted that the dual requirement (namely that there be both changed circumstances, and
that it be urgent and necessary to revoke) was derived from the Lao Holdings case.159
Without the requirement of changed circumstances (that is, “an objective justification”),
the Claimants submitted that one would be left with a system of unlimited appeal.160
2.71 The Claimants further contended that Albania’s assurances of compliance, and in
particular, its claim that it had complied with the Tribunal’s Order regarding the suspension
of the extradition proceedings (or at least, attempted suspending), did not constitute
changed circumstances.161
2.72 The Claimants also focused the Tribunal’s attention to the question of why Albania did
not raise its inability to suspend the extradition or criminal proceedings during the earlier
Provisional Measures hearing, when it knew it could be faced with such an order.162 The
Claimants submitted that the inference that can be drawn from this is that there is no merit
to the argument that Albania is unable to comply with the Order.163
2.73 Finally, the Claimants focused on Albania’s undertaking not to seek that Messrs Becchetti
and De Renzis be remanded in custody if they were to be extradited. The Claimants
submitted that the Respondent was not being “genuine and honest” in giving this
undertaking, because, on the one hand, it had stated that it was committed not to imprison
Messrs Becchetti and De Renzis, but, on the other hand, it is “fighting tooth and nail to
get rid of” the Order.164
2.74 After the hearing, the Parties were each directed to file post-hearing submissions, to which
the Tribunal now turns.
158 T100.22 – T101.2.

159 T101.3 – 12.
160 T103.7 – 10.
161 T105.23, T106.9 – 18.
162 T107.1 – 21.
163 T107.21 – 24.
164 T109.2 – 9.
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The Respondent’s Post-Hearing Submission of 29 June 2016
2.75 The Respondent submitted its Post Hearing Submission on 29 June 2016, accompanied by
(i) correspondence between the Albanian Attorney-General’s Office and Albanian
Prosecutors; and (ii) an Opinion on Matters of Albanian Law dated 22 July 2016 written
by Professor Arben Rakipi, a Professor of Criminal Law at the Tirana Magistrates’ School.
The admission of those documents into the record was objected to by the Claimants in
their Post-Hearing Submission of 8 July 2016.
2.76 In light of this dispute, the Tribunal had to determine whether to admit this opinion. It
determined to do so. The Tribunal turns to consider Professor Rakipi’s opinion (and that
of the Claimants’ expert as to Albanian law) at paragraphs 2.95–2.101 below.
2.77 The Respondent then makes submissions on the three relevant questions, namely:
(a) who was to give the undertakings that Messrs Becchetti and De Renzis not be
incarcerated and that they be released on bail, and in what form they were to be made
to the Tribunal;
(b) how any such undertakings would be made; and
(c) how, once made, the undertakings would be implemented in Albania.165
2.78 The Respondent describes the undertakings as “promises”, rather than undertakings,
explaining that, as a matter of Albanian legal language, it was appropriate to do so.166 In
fact, the terms “undertakings” and “promises” seemed to be used interchangeably in both
Parties’ submissions, and the Tribunal herein adopts the language used by the Parties
depending on the particular submission or point made.
The “promises” made
2.79 The Respondent relies on promises that have already been made in the form of the 5 April
2016 letter from the Minister of Justice to the Home Office167 and a letter from the
165 Respondent’s Post-Hearing Submission, para 2(a) – (c).

166 Ibid, footnote 1.
167 R-0010.
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Albanian Prosecution Office dated 14 June 2016.168 Further, it relies on the letter from the
Prosecutor General’s Office dated 29 June 2016,169 which it submits confirms that (i) the
Prosecutor and Albanian Court are obliged to comply with the “promise” made by the
Albanian Minister of Justice; (ii) Messrs Becchetti and De Renzis would be held in custody
for a maximum of three days from their arrival in Albania before they are brought before
an Albanian court for “processing”; (iii) Messrs Becchetti and De Renzis will thereafter be
released on “reasonable bail conditions”; and (iv), once they have appeared before the
Albanian court, their arrest warrants will be satisfied.170
How the “promises” are to be implemented in Albania
2.80 The Respondent refers to letters from the State Advocate’s Office that confirm, amongst
other things, that the Minister for Justice abides by the undertakings made in the 5 April
2016 letter to the Home Office, which are “legitimated by implementation of Article 504/2
of the Code of Criminal Procedure”.171 The Respondent further submits that as a matter
of international law, those promises remain binding on Albania because:
(a) the letter is signed by the Minister of Justice himself, and he is the authorised
representative of the Republic of Albania; and
(b) the letter by the Minister plainly evinces an intention to be bound by its terms.172
2.81 The Respondent points to the decision of the International Court of Justice in the Nuclear
Tests Case, whereby the Court stated:
“When it is the intention of the State making the declaration that it should
become bound according to its terms, that intention confers on the
declaration the character of a legal undertaking…”173
2.82 The Respondent concedes that its previous reliance on Art 504(2) of the Albanian Criminal
Procedural Code to suggest that the Minister for Justice’s promise in the letter to the Home
168 R-0020.
169 R-0020.
170 Respondent’s Post Hearing Submission, para 6 (a) – (d).
171 Ibid, paras 10 – 12.
172 Ibid, para 13(a)-(b).
173 Australia v France, Judgment dated 20 December 1974, I.C.J. Reports 1974, CL-029, p 267.
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Office was binding is now “a matter of some uncertainty under Albanian law”.174 However
the Respondent relies on the opinion of Professor Rakipi, its Albanian law expert, that “the
Minister is bound where he has made promises as to how the Defendants will be treated
if extradited” despite the situation not being “expressly envisaged in the law”.175
2.83 The Respondent submits that the Minister for Justice considers himself bound by the
promises made in the extradition proceedings, but could make those same promises or
undertakings to the Tribunal because they do not relate to the “framework of the
extradition proceedings” and Albanian law does not provide for any valid undertakings to
be made outside the extradition proceedings.176
2.84 As a reason why this Tribunal should be satisfied that the Minister will keep his word, the
Respondent submits that by not doing so would have “very severe repercussions” for
Albania in these proceedings, and also for its bilateral relationship with the UK.177
2.85 Turning to how the “promises” made by the Minister of Justice are binding on Albanian
prosecutors and courts, the Respondent relies on Art 51(2) of Law 10193178 and Art 504(2)
of the Code of Criminal Procedure,179 which, in combination, mean that the Minister’s
confirmation or acceptance of the promises previously made to the Home Office is binding
upon both prosecutors and courts.180
The Claimants’ Post-Hearing Submission of 8 July 2016
2.86 On 8 July 2016, the Claimants submitted their response to the Respondent’s Post Hearing
Submission (the “Claimants’ Post-Hearing Submission”). This was submitted on the
same day that the Judgment was handed down. The Claimants’ Post-Hearing Submission
174 Respondent’s Post Hearing Submission, para 16.

175 Ibid, para 17.
176 Ibid, para 18.
177 Ibid, para 19.
178 Which essentially provides that Albanian domestic courts are obliged to respect conditions previously
promised in an extradition.
179 Which provides that the Minister of Justice is competent to decide upon the conditions imposed by the
“foreign country to provide extradition”, when they do not run against principles of Albanian law.
180 Respondent’s Post-Hearing Submission, para 27. The Respondent also relies on the Opinion of
Professor Rakipi in this respect.
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was accompanied by an opinion by Mr Arben Qeleshi which largely addressed the opinion
of Professor Arben Rakipi. That, too, was admitted into evidence. The Tribunal separately
summarises Mr Qeleshi’s opinion (together with Professor Rakipi’s opinion) at paragraphs
2.95–2.101 below.
2.87 The Claimants emphasise that the Respondent would not (or could not, as the case may
be) give an undertaking to this Tribunal directly and instead rely on the previous
undertaking given by the Minister of Justice.181 The Claimants point out the Respondent
admits that Art 504(2) of the Code of Criminal Procedure would not apply to the undertakings
given by the Minister, because that part of the Code only applies “where an undertaking
has been given at the request of a foreign State as a condition for extradition”.182
The Claimants explain that, under Art 504(2), an undertaking could only be given by the
Minister if requested by the UK authorities, and, as no such request was made, an
“undertaking” was not given (at least for the purposes of Art 504(2)).183 The Claimants say
that this is significant because “Albania has been forced to concede yet again that its prior
statements with respect to Albanian law are simply untrue”.184
2.88 The Claimants submit that the “promises” given by Albania to the UK authorities (given
that they cannot be characterised as undertakings and are not described by the Respondent
as such) do not bind Albania, Albanian courts, or Albanian prosecutors.185 The Claimants
reject the claim that the promises are binding as a matter of international law, because
“Albania’s Minister of Justice evinces no intention to be bound by his April 5 letter”.186
The Claimants also point to the apparent contradiction between the Respondent
maintaining that the promises have a binding effect under Albanian law (by virtue of their
binding nature under international law), but that the Tribunal’s Order does not enjoy a
similar binding effect under Albanian law.187
181 Claimants’ Post-Hearing Submission, p 2.

182 Ibid, p 3 – the Claimants quote the transcript at T86.01 – T87.25.
183 Claimants’ Post-Hearing Submission, p 4.
184 Ibid.
185 Ibid.
186 Ibid, p 5.
187 Ibid.
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2.89 The Claimants submit that the Respondent’s promises do not bind the Albanian courts
and its prosecutors.188 The Claimants point to two matters in support. First, they say that
(as the Minister has admitted) Art 504(2) does not provide a legal basis for the binding
nature of the undertaking under Albanian law. Second, the Claimants say that Albania’s
reliance on Law 10193189 is equally flawed. In this regard, the Claimants rely on the opinion
of Mr Qeleshi (which is summarised below), specifically because neither Law 10193 nor
Art 504(2) of the Code on Criminal Procedure provide a basis for the “promises” to be binding
under Albanian law.190
2.90 The Claimants further submit that the promises made by the Albanian Minister are not
binding before the English courts. The Claimants submit that the issue of bail in Albania
(and, presumably, any promises made regarding bail) is irrelevant to the extradition process
in the UK.191 The Claimants submit that under the Extradition Act 2003 (UK), the presiding
judge must send an application for extradition to the UK Secretary of State, who is obliged
to order extradition unless certain narrow circumstances exist (none of which are
applicable in this case).192 The Claimants contend that neither the Judge nor the Secretary
of State will be concerned with the question of bail in Albania after Messrs Becchetti and
De Renzis are extradited.193
2.91 The Claimants also contend that Albania’s promise that Messrs Becchetti and De Renzis
will be allowed to travel freely to and from Albania once they are released on bail is illusory.
The Claimants draw the Tribunal’s attention to the fact that the guarantee of free travel to
and from Albania is not covered by any promise or undertaking by the Albanian Minister
of Justice – rather, it was only made by way of submission in the Respondent’s submission
of 10 May 2016, and the Respondent does not explain why this representation is binding.194
Further, the Claimants contend that Albania does not explain how it would withdraw
international arrest warrants and an Interpol “Red Notice” against Messrs Becchetti and
188 Ibid, p 6.
189 Referred to above in para 2.85.
190 Claimants’ Post Hearing Submission, p 6.
191 Ibid, p 7.
192 Ibid.
193 Ibid, p 8.
194 Ibid, p 9.
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De Renzis.195 The Claimants pose the question why Albania would continue to seek the
extradition of Messrs Becchetti and De Renzis only to release them again, and says that
such a position “flies in the face of the very purposes of extradition, which is to force a
defendant to return to a State in which he is to be tried in order to stand trial”.196 The
Claimants contend that even if Messrs Becchetti and De Renzis were granted bail, they
would be obliged to appear in Albania at “Albania’s volition”, due to the operation of Art
353 of the Code of Criminal Procedure.197
2.92 The Claimants also press the argument that the Respondent has failed to address any of
the Tribunal’s queries contained in its letter of 16 June 2016 following the oral hearing in
this matter. In particular, the Claimants stress that the Respondent has given no
undertaking to the Tribunal (especially given that the Tribunal’s letter of 16 June 2016
specifically asked: “who will make the undertaking(s) and in what form will it be made to
the Tribunal”).198 The Claimants say that the reasons proffered by the Respondent as to
why it cannot make the undertakings directly to the Tribunal are flawed. First, the
Claimants say that given the Respondent has effectively admitted that the undertaking
made by the Minister to the Home Office in his letter of 5 April 2016 was not made
pursuant to Art 504(2) of the Code on Criminal Procedure, then it could not bear a relationship
to the extradition proceedings.199 The Claimants ask: given that those undertakings bear no
“legal” relationship to the extradition proceedings, why can the Minister of Justice make
the undertakings to the Westminster Magistrates’ Court, but not the Tribunal?200 Second,
the Claimants submit that, if the Minister of Justice cannot provide the undertakings to the
Tribunal (as the Respondent claims the Minister cannot), then why are Albanian officials
other than the Minister of Justice unable to make such an undertaking?201
195 Ibid, a “Red Notice” is described on the Interpol website as follows: “In the case of Red Notices, the persons
concerned are wanted by national jurisdictions for prosecution or to serve a sentence based on an arrest warrant or court
decision. INTERPOL's role is to assist the national police forces in identifying and locating these persons with a view to their
arrest and extradition or similar lawful action.” See www.interpol.int/INTERPOL-expertise/Notices.
196 Ibid.
197 Ibid, p 10.
198 Ibid.
199 Ibid, p. 11.
200 Ibid.
201 Ibid.
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2.93 The Claimants also point out that the “reasonable bail conditions” promised by the
Respondent have not been fully explained to them and remain an “abstract concept”.202
The Claimants say that the Tribunal should draw “the necessary conclusions” – namely, an
adverse inference – from Albania’s silence on this point.203
2.94 Finally, the Claimants contend that Albania has not adequately addressed how the promises
made by the Minister to the Home Office would be implemented. The Claimants attack
the Respondent’s submission that the promise would be binding on it as a matter of
international law because such a contention is “disingenuous in light of Albania’s position
that the Tribunal’s Order on Provisional Measures is binding upon it, but that it
nevertheless cannot be implemented under its own law”.204 Specifically, the Claimants
submit that the Respondent fails to explain why the Minister’s promises must be
implemented immediately by its governmental organs, but not the Tribunal’s Order.
The Opinions of Professor Arben Rakipi and Mr Arben Qeleshi
2.95 As already noted, Professor Arben Rakipi has been put forward as an expert on Albanian
law by the Respondent, while Mr Arben Qeleshi has been put forward by the Claimants.
2.96 Professor Rakipi is a Professor of Criminal Law at the Tirana Magistrates School, and was
a former Judge of different courts in Albania. His opinion was sought by counsel for the
Respondent for the purposes of this arbitration. His report is structured in such a way as
to address various questions posed of him by counsel from the Respondent.
2.97 Mr Qeleshi’s experience includes, but is not limited to, working as a Prosecutor for the
Attorney General’s office, and serving as a Magistrate for seven years. Mr Qeleshi was
asked to address the same questions put to Professor Rakipi, and also to address the
answers provided by Professor Rakipi.
2.98 Question 1: Professor Rakipi was asked whether or not the Minister for Justice would be
obliged to comply with an undertaking given by him to the English extradition courts if
202 Ibid.
203 Ibid, p 12.
204 Ibid.
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the extradition court did not impose on Albania those conditions given in the
undertaking.205
(a) Professor Rakipi states that the present situation is not envisaged by Albanian law, but
that the provisions of “articles 42, 51, 52 etc.”, presumably of Law 10193, apply as to
“order the procedural authority to respect the undertaking”.206
(b) Professor Rakipi also made reference to Albania’s “international obligations” … “due
to its membership of the Council of Europe Extradition Convention” (which the
Tribunal takes to mean the European Convention on Extradition), and states:
“In this case we apply the constitutional concept of the direct application
of international agreements, which take precedence over national laws
(Article 122 of the Constitution). Our present case should also be assessed
in this spirit. I think that in the event that the Minister of Justice has issued
an undertaking, regardless of its form and content, he should adhere to
it”.
[…]
Consequently, the exercise of competence in meeting international

obligations on his part, has been done at this point, and any revocation or
withdrawal from the undertaking issued cannot be understood, nor can it
be permitted, I would say. From this viewpoint, the Minister has fulfilled
his will and the internal court authority must proceed according to this
express will”.207
(c) Mr Qeleshi, on the other hand, says that if a person is to be extradited to Albania, but
the foreign extraditing court does not impose any conditions or undertakings to be
respected by Albania, there shall be no obligation on the part of the Albanian court to
abide by any undertakings made.208 Mr Qeleshi rejects the contention that the situation
of Messrs Becchetti and De Renzis’ extradition is not envisaged by Albanian law,
instead concluding that Art 504(2) of the Code on Criminal Procedure is applicable, and
should be understood as follows:
205 Professor Rakipi’s Opinion, p 1.

206 Ibid.
207 Ibid, p 2.
208 Mr Qeleshi’s Opinion, p 1
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“First, in the case of extradition from abroad, the only authority

competent to impose conditions or undertakings/guarantees is the
foreign extradition court (in this case the English Court).
[…]
Secondly, pursuant to Article 504 paragraph 2 of the Criminal Procedure

Code, the foreign court has discretion whether to set/place or not
conditions or undertakings on the extradition of the wanted person […]
This provision uses the term ‘eventually’ to underline that the foreign
court could have imposed conditions or undertakings when it accepted
the extradition, but it could also have not imposed any conditions or
undertakings.
Thirdly, when the foreign court which has ordered the extradition has set
conditions in its decision, these conditions are not automatically binding
on the Albanian state. This is because, the Minister of Justice shall have
the power to decide if it accepts, or not, the conditions imposed after
verifying that those conditions are not contrary to the main principles of
the Albanian rule of law”.209
(d) Mr Qeleshi also opines that, according to Albanian law, the Minister of Justice’s
acceptance or denial of extradition conditions will be given after, not before, the
foreign court’s decision on extradition. The consequence is that if the Minister of
Justice provides an undertaking before extradition is allowed by the foreign court, the
undertaking does not legally bind the Minister of Justice to comply with it.210
2.99 Question 2: Professor Rakipi is asked whether the undertaking given by the Minister is
binding on an Albanian Court as the “proceeding authority” under Art 504 of the Code on
Criminal Procedure.
(a) Professor Rakipi states that the “undertaking by the Minister of Justice is issued for
procedural documents and actions, which means that it is binding on any institution
that takes part in a procedural instance or situation” and for this reason “the court and
prosecution service are to be understood as the procedural authority without
209 Ibid, p 2 (emphasis added).

210 Ibid.
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distinction”.211 Professor Rakipi bases the answer to this question on Arts 42 and 51
of Law 10193, which he reproduces in his opinion.212
(b) Mr Qeleshi stated in response that the Minister of Justice had discretionary power over
extraditions and “even if he has made the request for extradition, he may withdraw this
request [later]”.213 This assumes importance given the Respondent’s submissions about
the inability under Albanian law to suspend extradition proceedings. Mr Qeleshi also
attacks Professor Rakipi’s reliance on Law 10193, and states “such reference is
pointless and furthermore it is not related to the question on the binding power on the
Albanian court of the Minister’s undertaking”. He opines that Art 42 regulates the
extradition of a person from Albania to a foreign country, not the other way around,
as is the case here.214 Further he states that the reference to Art 52 is similarly irrelevant,
because it governs when an undertaking is given to allow a person up for extradition a
right of review of a final decision (i.e. a conviction), where that decision was rendered
in absentia.215 That is obviously not the case here.
2.100 Questions 3 & 4: Professor Rakipi is asked whether an undertaking given by the Minister of
Justice is binding on an Albanian Court as a matter of practice in Albanian criminal
procedure. Professor Rakipi is separately asked to confirm the authority for his answers.
(a) He opines in the affirmative, saying that it is binding, and pointing to Art 52 of Law
10193 and also a decision of the Constitutional Court of Albania.216 It is clear that both
the legislative provisions and the case cited by Professor Rakipi relate to persons
convicted in absentia, but he concludes by stating “I confirm that the Albanian
procedural authority has respected the undertakings given by the Minister of Justice”.217
Further, he opines:

212 Ibid, page 2 – 3.
213 Mr Qeleshi’s opinion, page 3.
214 Ibid.
215 Ibid, p 4.
216 Ibid, 4, Decision No 21, Florian Mece, Constitutional Court of the Republic of Albania (29 April 2010).
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“… the state of proceedings relating to the effect of the undertakings

given by the Minister of Justice in the case of extradition requests, has
always been resolved in compliance with the undertaking given to review
criminal decisions issued in the absence of the convicted persons.”218
(b) Mr Qeleshi responds by conceding that it is generally true as a matter of practice that
Albanian courts respect decisions of the Minister, but he emphasises that that is only
the case where final sentences have been rendered in absentia. Mr Qeleshi opines that
“Article 51 of Law no. 10193 has not been applied to decisions issuing personal security
measures”.219
2.101 Conclusions: It is of assistance to set out both Professor Rakipi and Mr Qeleshi’s conclusions
out in full:
(a) Professor Rakipi stated:
“In conclusion, it is worth my re-emphasising that the content of the

decisions in question, and our practice in this field – the field of
extradition – is well worked out only in cases where the persons whose
extradition is sought have been sentenced in absentia. The above decisions
refer generally to the right of persons to have a second trial, an appeal or
a review of decisions handed down in their absence. The undertakings
which the Albanian Ministers of Justice have given for such persons also
rest upon this basis. Our case is special. But, in the spirit of the content
of the law, I think that the effect of the undertaking should be the same
for each legal situation. The recognition of the authority of the Minister
to issue the relevant undertakings remains because of international
agreements, multilateral acts to which Albania is party. Owing to their
effect, international acts are applied directly. This is the heart of the
matter”.220
(b) Mr Qeleshi, on the other hand, explains:
“In conclusion, the Rakipi Memo fails to provide any legal basis for the
binding effect upon Albanian courts of the Minister’s undertaking in this
case.
This is because, as we explained:
1. Article 42 of Law no. 10193 governs cases of extradition from

Albania to a foreign State and is thus not relevant to the
218 Ibid.
219 Mr Qeleshi’s Opinion, p 4.
220 Professor Rapiki’s Opinion, p 5.
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relevant undertaking of the Minister (i.e. not to imprison the

defendants on return to Albania for longer than 3 days in an
Article 3 compliant prison…).
2. Pursuant to article 51, paragraph 4 of Law no. 10193,

[guarantees] can be given by the Minister and that can have
binding effect on Albanian courts … only when an
undertaking has been given providing for the right of a review
of final sentence on the merit rendered in absentia.
Therefore, based on the above-mentioned provisions, the Minister of

Justice has no authority to compel the court regarding the undertaking he
has made in this case. This is also confirmed by judicial practice itself, as
professor Rakipi himself accepts in his opinion: judicial practice only
relates to the binding effect of the Minister’s undertaking for a review of
final decisions on the merits of the cases conducted in the absence of the
convicted/trialled persons.”221
PART III: FURTHER DEVELOPMENTS IN THE UNITED KINGDOM
The Judgment of District Judge Tempia
3.1 On 8 July 2016, District Judge Tempia of the Westminster Magistrates Court handed down
the judgment in Government of Albania v Francesco Becchetti and Mauro De Renzis.
Judge Tempia’s judgment makes reference to the Tribunal’s Order and sets out the
procedural history of the extradition proceedings before the English courts.222 It is
apparent from the recitation of these matters that the Judge was presented with lengthy
and detailed oral and written submissions from both sides.
3.2 In her judgment, Judge Tempia summarised the evidence that was before her. In particular,
she had the benefit of a copy of the Tribunal’s Order, as well as various documents from
this arbitration, and a memorandum entitled “Reasons Why Albania Cannot Withdraw UK
Extradition Proceedings” produced by Albania (the “Reasons Document”).223 The
Reasons Document explained why Albania could not comply with the Tribunal’s Order by
suspending the extradition and criminal proceedings, for broadly the same reasons
221 Mr Qeleshi’s Opinion, p 5.

222 Judgment, paras 3 – 6.
223 Ibid.
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proffered to this Tribunal.224 The Judge noted in her judgment that it was unclear who
authored the Reasons Document.
3.3 Further, Judge Tempia had before her an opinion from Mr Becchetti’s Albanian counsel,
who opined that Albania could suspend the criminal and extradition proceedings against
Messrs Becchetti and De Renzis. She also had before her an opinion from Mr Qeleshi,
albeit a different one to which is presently before the Tribunal.225 That said, Mr Qeleshi’s
opinion given in the extradition proceedings seems, from the Judge’s summary, to be
largely identical with that given to this Tribunal.226
3.4 Having summarised the submissions of the parties to that proceeding, Judge Tempia began
her reasons by declaring that she found the Tribunal’s Order to be one that was validly
issued and which is accepted by Albania as binding upon it.227 The Judge characterised the
Reasons Document as the evidence that was relied on by Albania to substantiate their
position as to why the arrest warrants and extradition proceedings could not be
withdrawn.228 The Judge did not draw an adverse inference from the fact that the Reasons
Document did not state its author, accepting that it was a document from the Albanian
Ministry of Justice.229
3.5 In dealing with the Reasons Document, however, Judge Tempia preferred the evidence of
Mr Qeleshi on these matters. Having noted his impressive background,230 the Judge
accepted Mr Qeleshi’s evidence in its entirety. She noted that his report had set out why
he was of the opinion that the Reasons Document was incorrect and misleading “in every
aspect of law and interpretation” and noted that “its contents have not been either
challenged or addressed by the Government”.231
224 Ibid, para 13.

225 Ibid, para 9.
226 Ibid, para 14.
227 Ibid, para 43.
228 Ibid, para 44.
229 Ibid.
230 Ibid, para 46.
231 Ibid.
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3.6 Judge Tempia also accepted the submission of Mr Knowles QC (for Messrs Becchetti and
De Renzis) that the Tribunal’s Order was binding on the extradition court and the
extradition proceedings should be suspended.232
3.7 As to the question of abuse of process, the Judge set out what was required under English
law to find an abuse of process on the part of the requesting authority (i.e., Albania).
Relying on the case of Belbin v The Regional Court of Lille, France,233 the Judge noted that the
conduct of Albania would only amount to an abuse of process if the Extradition Act 2003
(UK) was being usurped by bad faith or a deliberate manipulation of the extradition
process.234 Judge Tempia found that there had been an abuse of process on the part of
Albania. She stated that the abuse of process had occurred in respect of a specific question
put to Albania in an earlier mention of the extradition proceedings before another District
Judge, who asked whether Albania could withdraw the warrant, to which Albania had
answered in the negative. Judge Tempia said that, that answer had been “conclusively
discredited” by the evidence of Mr Qeleshi.235 Accordingly, Albania’s Reasons Document
was, she said, “totally misleading”.
3.8 Further, the Judge noted that allowing the extradition to proceed would prejudice
Messrs Becchetti and De Renzis’ ability to participate in the arbitration, and noted that no
assurances had been given by the Minister for Justice as what “reasonable bail conditions”
might be.236 In refusing the application to adjourn the proceedings sine die, she said that
Messrs Becchetti and De Renzis “would remain on bail for an indefinite period of time
and subject to bail conditions. This will be an infringement on their liberty for an
unspecified amount of time”.237
3.9 Judge Tempia concluded by stating that whilst she did find that an abuse of process on the
part of Albania had been made out, the Albanian Government did not act in bad faith. In
232 Ibid, para 49.

233 [2015] EWHC 149 (Admin).
234 Judgment, para 52.
235 Ibid, para 53.
236 Ibid, para 54.
237 Ibid, para 55.
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relation to the Reasons Document “I cannot find it has been produced in bad faith but
there has been a manipulation and usurpation of the court process”.238
3.10 In the result, as indicated above, the Judge stayed the proceedings.
The Parties’ Responses to the Judgment
3.11 On 11 July 2016, the Tribunal invited both Parties to provide their comments on the
Judgment of Judge Tempia.
3.12 Only the Claimants did so (the “Claimant’s Letter of 18 July”). In that letter, the
Claimants contend that the Judgment is relevant to the applications before the Tribunal in
three separate respects.239
3.13 First, the Claimants say that Judge Tempia’s findings that there has been an abuse of
process by Albania bolsters the Claimants’ submission that Albania’s alleged attempts to
comply with the Tribunal’s Order have been disingenuous.240 The Claimants point to the
Judge’s finding that Albania’s argument that it is unable to withdraw the arrest warrants
against Messrs Becchetti and De Renzis has been “conclusively discredited”.241 The
Claimants also emphasise that Judge Tempia had been taken to the provisions of Albanian
law which show that the Minister of Justice had the discretion to withdraw those
warrants.242 Further, the Claimants point to the Judge’s acceptance that there had been “no
assurances” as to what bail conditions might be imposed on Messrs Becchetti and De
Renzis.243
3.14 Second, the Claimants say that Judge Tempia’s finding that there has been an abuse of
process confirms that the Tribunal should not modify or revoke its order. That is to say,
they say that the Judgment was predicated on the Tribunal’s Order, and “if the Order were
238 Ibid, para 56.

239 Claimants’ Letter of 18 July, p 2.
240 Ibid.
241 Ibid, also see Judgment para 53.
242 Ibid.
243 Ibid, p 3.
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to be withdrawn, Albania could, and would, apply to re-instate extradition proceedings at

any time”.244
3.15 Third, the Claimants contend that, notwithstanding that the extradition proceedings are
now stayed, the procedural integrity of the arbitration remains under threat. This is because
Albania has not sought the withdrawal of any Interpol “Red Notices”, nor has it suspended
criminal proceedings in Albania or withdrawn the arrest warrants. The Claimants contend
that this means that if Messrs Becchetti and De Renzis were to travel outside of the UK,
they could be extradited from a third country. This, the Claimants contend, will cause the
Claimants difficulty when engaging with their Parisian and New York counsel in this
arbitration.245
3.16 On the same day, in separate correspondence, the Claimants informed the Tribunal that
they had been notified by the UK Crown Prosecution Service that there would be no
appeal from the Judgment.246
3.17 The Respondent sought leave to reply to the Claimants’ Letter of 18 July. They had not
submitted any submissions in relation to the Judgment when invited to by the Tribunal.
The Tribunal allowed a response to the Claimants’ Letter, but not to the Judgment itself,
on the basis that the Respondent had already been provided an opportunity to do so.247
Despite not being given leave to do so, the Respondent submitted a letter responsive to
the Judgment on 22 July 2016. It is unnecessary to repeat what was said previously about
the Tribunal’s concerns about the manner in which this submission was made.248
3.18 The Respondent submits that, whilst it did not accept much of what the Judge stated in
the Judgment, including Judge Tempia’s interpretation and comments on Albanian law,
the extradition proceedings against Messrs Becchetti and De Renzis have been stayed for
244 Ibid.
245 Ibid.
246 Claimants’ Letter of 18 July 2016; see also Exhibit C-561.
247 Email from ICSID to Counsel, 19 July 2016.
248 See para 1.28 above.
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the duration of the ICSID proceedings, and Albania would not be appealing the
Judgment.249
3.19 The result, the Respondent contends, means that there is no reason for the maintenance
of the Tribunal’s Order.250 The Respondent also says that because the threat of
incarceration during the proceedings has been removed, there is similarly no reason for the
order to suspend the criminal proceedings in Albania to remain.251 The Respondent says
that “the mere continuation of the Albanian criminal proceedings, in which [Messrs
Becchetti and De Renzis] are represented and in which they continue to play a full part,
does not pose a risk to the procedural integrity of the arbitration”.252
3.20 Having set out the submissions in considerable detail, it is now necessary to move to the
analysis of those submissions.
3.21 In so doing, the Tribunal notes that it has been assisted by the ample written submissions
from counsel for the Parties, as well as the submissions made at the oral hearing. For the
avoidance of any doubt, the Tribunal hereby confirms that, in reaching its decisions in this
Order, it has fully taken into consideration all of the written and oral submissions of the
Parties, and the entirety of the evidence that has been presented by the Parties, whether or
not expressly referred to below.
PART IV: TRIBUNAL’S ANALYSIS
4.1 It should be noted from the outset that there is a relative dearth of authority and previous
decisions of ICSID tribunals in respect of revocation or modification of provisional
measures orders pursuant to Rule 39(3) of the ICSID Arbitration Rules. Of the decisions
and commentary that does exist, it relates mainly to circumstances where tribunals were
faced with changed circumstances that meant that the provisional measures recommended
by those tribunals were no longer necessary. The Respondent contends, at least in respect
of the extradition proceedings, that the circumstances have changed in this case.
249 Respondent’s Letter of 22 July 2016, para 3.

250 Ibid, para 6.
251 Ibid, para 7.
252
Ibid, para 9.
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4.2 Against that background, and having regard to the considerable assistance provided by the
Parties, the Tribunal has determined to revoke the Tribunal’s Order, but to nevertheless
replace it with differently-worded recommendations.
4.3 It is convenient to deal with the Respondent’s Application to the Tribunal’s Order first.
4.4 As to the extradition and criminal proceedings against Mr Becchetti and Mr De Renzis, the
Tribunal makes the following comments:
4.5 Despite the criticisms of the Claimants, the Tribunal accepts that, before and after the
Claimants lodged their Application, Albania endeavoured to comply with the Tribunal’s
Order, at least in part. In this regard, the Tribunal notes the (appropriate) conduct on the
part of the Respondent.
4.6 First, the Respondent requested that the Home Office lodge an application to adjourn the
extradition proceedings proceeding in the UK courts. The Tribunal had, of course,
recommended the “suspension”, not the “withdrawal”, of the proceedings, and had the
application to adjourn sine die been granted, this would have ensured compliance with the
recommendation the subject of the Tribunal’s Order.
4.7 Second, as to the suspension of the Albanian domestic criminal proceedings, the
Respondent contends that this was not possible under Albanian law. It is unnecessary here
to repeat the reasons why this is so. As will become apparent, the Tribunal need not form
a concluded view as to whether these reasons are, in fact, valid ones, the effect of which
was that the Respondent did, indeed, face no choice as to whether to suspend the Albanian
domestic criminal proceedings.
4.8 The primary relief sought by the Respondent is revocation of the Tribunal’s Order on the
grounds that the recommendations therein were wrongly recommended. As an alternative,
the Respondent seeks revocation or modification on the grounds of changed
circumstances.
4.9 The Tribunal has no doubt that it possesses the power to revoke its provisional measures.
Rule 39(3) of the Arbitration Rules confers such a power. That sub-rule begins by
providing that the Tribunal “may also recommend provisional measures on its own
initiative or recommend measures other than those specified in the request” but goes on
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647
to make plain that the Tribunal “may at any time modify or revoke its recommendations”.
While issues may arise as to whether a Tribunal is so empowered where it has delivered its
Final Award, and the Tribunal is thus functus officio, this is not such a case. Here, the
Tribunal remains seised of the proceeding and can, in appropriate circumstances, re-
consider its previous orders. To contend otherwise would be contrary to the plain language
of Rule 39(3) and the jurisdiction of this Tribunal to resolve the relevant dispute between
the Parties which it is seised to resolve.
4.10 But the Claimants’ objection goes further. As will be recalled, the Claimants submit that
the Tribunal can only revoke or modify its provisional measures if there are “changed
circumstances” warranting its intervention and that, here, there are none. That is,
the Claimants say that this Tribunal does not have jurisdiction to re-consider the Order
solely by way of a de novo hearing or re-hearing of the earlier application.
4.11 While the Tribunal has some sympathy with that approach, it is not necessary for it to
finally determine whether “changed circumstances” are indeed required. That is so
because, on any view, the Judgment on 8 July 2016 provides the necessary “changed
circumstance”, hinge or jurisdictional basis for the Tribunal to re-consider the Tribunal’s
Order. That is, there are undoubtedly “changed circumstances” which warrant the
modification (but not revocation) of the Order.
4.12 As is plain from the reasoning in the Tribunal’s Order, the principal reason for making the
recommendations the subject of paragraph 5.1(a) and 5.1(b)253 was the potential inability
of Messrs Becchetti and De Renzis to fully participate in the arbitration if they were
incarcerated.
4.13 The Respondent has contended, on occasion in very strong terms, that the Tribunal was
wrong to so conclude. But, based on the evidence then before the Tribunal and the further
evidence since filed and served on the Applications, the Tribunal is not persuaded that it
was then, or is now, wrong to recommend measures to protect the procedural integrity of
this arbitration. The Tribunal was, and is, of the view that were Messrs Becchetti and De
Renzis to be incarcerated, they would be unable to properly participate in the arbitration.
The Tribunal notes the spirited opposition, indeed criticism, levelled by the Respondent
253 The recommendations are extracted in full at para 1.1 above.
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648
concerning its conclusions or more accurately the reasons proffered for its conclusions.
However, having considered all the circumstances as known to it, including the pendency
of several arbitrations and institution of criminal proceedings following the first arbitration
relating to the Claimants’ investments, the Tribunal does not resile from the order it made
or the reasons for which it made it.
4.14 That said, the principal objective for the Tribunal’s recommendations has now been
secured. It matters not that it was secured by the Respondent’s attempt to adjourn the
extradition proceedings sine die, or what has now transpired, namely the suspension by
order of Judge Tempia.
4.15 It follows that it is unnecessary to consider the efficacy of the promise given by the
Albanian Minister of Justice, and it would be inappropriate for the Tribunal to consider
this issue further.
4.16 As emphasised in the Tribunal’s Order, had Messrs Becchetti and De Renzis been
incarcerated in Albania, their ability to participate would undoubtedly have been at least
substantially impaired. Given that these two Claimants are now in the UK and are not
subject to any restraint imposed, they are fully able to participate in the arbitration. Thus
the object of the Tribunal’s order is accomplished. There is therefore no need to order any
provisional measures which would have the effect of impairing the State’s sovereign rights
to exercise its police powers, including the investigation, and if warranted, prosecution of
criminal offences. It follows that the Tribunal has decided that the previous
recommendations should be revoked, and in lieu thereof, the following recommendations
be made of the Respondent, namely that it:
recommence extradition proceedings in the UK against Messrs Becchetti and Mr De
Renzis until the issuance of a Final Award in this proceeding; and
(Case Numbers 1502751601 (for Mr Becchetti) and 1502752144 (for Mr De Renzis))
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649
4.17 The Tribunal now moves to paragraph 5.2 of the Tribunal’s Order, which, it will be
recalled, relates to the recommendation that the Parties confer in relation to the preservation
of the Assets, being those Assets which the Claimants sought to have returned by its
original provisional measures application.
4.18 Before turning to determine whether an order in relation to the Assets should be made, it
is necessary to say something about the Claimants’ conduct in this regard. As already
noted,254 the Claimants wrote on 10 March 2016 to the Respondent, seeking “the
consequential return of the Companies and their assets and bank accounts” in order to
satisfy paragraph 5.2 of the Tribunal’s Order. To write in these terms was disingenuous,
as it was plain that such a request (if it can be so characterised) was not in accordance with
the recommendations of the Tribunal. The Tribunal, in its Order, was careful to say that
it was not determining whether it would be appropriate to make any order regarding the
Assets and merely invited the Parties to confer in relation to the preservation of the Assets.
4.19 What was sought by the Claimants went far beyond, and did not constitute what the
Tribunal considered a good faith attempt to “seek to agree appropriate measures … to
preserve” the Assets.
4.20 In any case, since the making of the recommendation, the position has changed. In
particular, on 13 May 2016, the Claimants filed and served their Memorial, by which it
sought, amongst other things, the following relief:255
“B) Ordering Albania to pay monetary damages in an amount that

would wipe out all of the consequences of its illegal acts and re-
establish the situation that would have existed if those acts had
not been committed, in an amount to be determined.”
4.21 That is, in the final relief sought, there is no prayer for relief seeking the return of the
Assets – only damages.
4.22 Further, the Memorial alleges that Albania has expropriated the Claimants’ investments in
the Kalivac project “and has also rendered valueless the local companies whose sole
254 See para 1.2 above.

255 See para 681 of the Claimants’ Memorial.
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business rationale had been the Kalivac Project”.256 Those local companies are Energji,
400 KV and Cable System. As to Agonset, the TV station, the Memorial asserts that
“Albania has expropriated Agonset and rendered useless its related companies … Albania
has seized the Claimants’ registered indirect shareholdings in Agonset and has destroyed
any value in the company and its related companies”.257 Although not seeking the return
of the shareholding any longer, they also say that “[w]ere Albania to return Agonset to its
shareholders, it would be less than ‘a shell of the former investment’”,258 suggesting that,
hypothetically, such shareholding may be returned to the shareholders. But, in
circumstances where no relief to that effect is sought, the only proper conclusion is that
the Claimants now accept that they are limited to their remedy in damages. Self-evidently,
that is a matter for later determination.
4.23 Before leaving this issue, reference should, however, be made to what was said at the
hearing in relation to this issue. Mr Dhar, for the Respondent, explained:259
“The trouble for the Claimants is that [the Claimants’ Memorial]

demonstrates that, on their own case, the horse has already bolted. The
current definitive position as stated by the Claimants is that in relation to
each of the relevant Albanian companies – Energji, KGE, 400 KV, Cable
System, Agonset – there has been an expropriation. The Memorial is
replete with emotive terms such as ‘total destruction’, ‘sabotage’,
‘destruction’, etcetera. […] It makes it plain that on the present case, each
of those companies has already been eliminated, and that an expropriation
has already taken place”.
4.24 In answer to a question from Mr Glick, Mr Dhar further explained,260 in relation to the
prayer for relief at paragraph 681 of the Claimants’ Memorial, to which reference has
already been made:261
“[I]n our respectful submission [paragraph 681 of the Claimants’

Memorial] demonstrates two things: one, […] it demonstrates there is no
specific relief anymore; secondly, what it demonstrates is the Claimants
are content to reduce their claim […] to damages. It demonstrates that
256 See Memorial, para 572.

257 See Claimants’ Memorial, paras 583 and 584.
258 See Claimants’ Memorial, para 586.
259 T58.22ff
260 T62.5ff
261 See paragraph 4.20 above.
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651
damages are, on their case, an adequate remedy for the alleged

expropriations. Not only do they claim that, and have dropped the claim
for specific relief, they have put in two lengthy expert reports which seek
to quantify, to a very specific sum, the alleged expropriations in relation
to these companies.”
4.25 Mr Tahbaz, for the Claimants, accepted that this was the case, his reference to the issue
still being “alive” only capable of being interpreted as being that the issue of damages was
still alive in relation to their destruction or expropriation. More fully, he said:262
“With regard to the assets, we are where we are with the assets because
Albania has disregarded the concerns that we believe motivated at least
that portion of the Provisional Measures Order. In other words, the assets
have been destroyed because of Albania’s conduct, including most
recently – and I believe this is right, but Mr Pinsolle will correct me if I
have it wrong – Agonset, the television station, was evicted from its
premises in April, I believe because of the non-payment of rent. […] So
the concerns that motivated that aspect of the Provisional Measures
Order are very much still alive. The fact is the assets have been destroyed,
so the case has been adjusted accordingly. It doesn’t mean that if
Claimants were to receive some of those assets in return, that they
couldn’t be rehabilitated and re-operated under the appropriate
circumstances.”
4.26 At this stage, the Tribunal is not required, nor would it be appropriate, to decide whether
the Assets have, in fact been destroyed or expropriated. If the Claimants succeed in this
arbitration, the Tribunal is presently of the view that any loss or damage to its Assets can
be adequately compensated by an award of damages. There is thus now no necessity for
paragraphs 5.2 or 5.3 of the Tribunal's Order, nor for them to be replaced by some
substitute, and accordingly the Tribunal has decided that they should be revoked.
4.27 As regards paragraph 5.1, should the situation change and the Claimants be prevented from
effectively participating in the proceedings for any other reason, an application may be
made to the Tribunal for further provisional measures. Liberty to apply is specifically
granted.
4.28 It is now necessary to turn to the Claimant’s Application, although it has largely been
resolved by the resolution of the Respondents’ Application.
262 T99.7ff.
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652
4.29 The Tribunal need not make a Partial Award, as requested by the Claimants, so its
jurisdictional competence to do so need not be determined. The Tribunal notes in passing,
however, that neither the ICSID Convention nor the ICSID Arbitration Rules make
reference to a Partial Award. The Tribunal, nevertheless, expects the Respondent to
comply with the recommendations made herein, and notes that their maintenance is
consistent with that which was ordered by the Judgment.
4.30 That leaves only the question of whether a penalty should be ordered against the
Respondent. As already noted, the Tribunal is not persuaded that the conduct of the
Respondent was such as to involve a contravention of the recommendation. But, even if
it had, any monetary compensation awarded in the Final Award can adequately compensate
the Claimants for their loss, whatever that may be.
PART V: TRIBUNAL’S ORDER
5.1 The Tribunal’s Provisional Measures Order of 3 March 2016 is revoked and, in lieu thereof,
the Tribunal recommends that the Republic of Albania:
recommence extradition proceedings in the United Kingdom against Messrs Becchetti
and De Renzis until the issuance of a Final Award in this proceeding; and
(Case Numbers 1502751601 (for Mr Becchetti) and 1502752144 (for Mr De Renzis))
5.2 The Applications are otherwise dismissed.
5.3 The costs of the Applications are reserved for later determination in the Final Award.
5.4 There be liberty to apply.
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653
On behalf of the Tribunal,
____________________
Michael Pryles
Presiding Arbitrator
1 September 2016.
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655
ICC COMMISSION
REPORT
EMERGENCY
ARBITRATOR
PROCEEDINGS
656
Copyright © 2019
International Chamber of Commerce
(ICC)
All rights reserved.

ICC holds all copyright and other
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collective work. No part of this work may
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Permission can be requested from ICC ICC, the ICC logo, CCI, International
through copyright.drs@iccwbo.org. Chamber of Commerce (including
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The views and recommendations
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contained in this publication originate
Organization, International Court of
from a Task Force created within ICC’s
Arbitration and ICC International Court
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They should not be thought to
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represent views and recommendations
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www.iccwbo.org binding on either body. 657
Publication date: April 2019
1
Contents
Emergency Arbitrator Proceedings
Report of the ICC Commission on Arbitration and ADR

Task Force on Emergency Arbitrator (‘EA’) Proceedings
Note to readers 3
I. Introduction 3
A. Introductory remarks 3
B. Summary of key conclusions 4
1) Threshold issues 4
2) Procedural matters 5
3) Substantive standards 6
4) Post-emergency arbitration considerations 6
C. Structure of the Report 7
II. The Task Force work underlying this Report 7

A. Scope of the Task Force work 7
B. Sources for the Task Force study 8
III. Selected topics - practice on key issues 8

A. General issues 8
1) ICC Note and ICC EA Order Checklist 8
2) Boilerplate forms for Applications, EA correspondence
and Orders 9
3) How do parties strategically use EA proceedings? 9
B. Threshold issues 10
1) Introduction 10
2) Applicability, jurisdiction and admissibility 10
a) Applicability: The role of the President of the ICC Court
in pre-screening EA Applications 10
b) Jurisdiction: The EA’s authority to order the relief
requested 12
c) Admissibility: Is there any impediment to the claim
being admissible, including assessing whether the
measures cannot await the constitution of an
arbitral tribunal 13
3) Summary of cases involving threshold issues 14
4) Law applicable to the EA’s consideration of
threshold issues 16
5) Impact of the EA’s decision on threshold issues
before the arbitral tribunal 17
C. Procedural matters 17
1) Introduction 17
2) Rules and norms governing the procedure 17
3) Temporary measures protecting the status quo 18
4) Case management, written submissions, evidence and
hearing 20
a) General considerations 20
b) Specific issues 20
5) Burden of proof 22
658
2
6) Non-participating respondent 22
7) Time limit for the Order 22
D. Substantive standards 22
1) Introduction 22
2) Norms applicable to EA Applications 23
3) Substantive criteria for granting emergency relief 23
a) Urgency 24
b) Other factors drawn from interim measures practice 25
(i) Likelihood of success on the merits (fumus boni iuris) 25
(ii) Risk of irreparable harm (periculum in mora) 25
(iii) Risk of aggravation of the dispute 26
(iv) No prejudgment on the merits 27
(v) Balance of equities (proportionality) 27
4) Other considerations for granting emergency relief 28
a) Provision of security as a condition to the relief
granted 28
b) Nature of the emergency relief sought 29
IV. Post-emergency arbitration considerations 30

A. Enforcement 30
1) The status of the EA under national laws 30
2) Form and interim nature of the EA’s decision and
impact on enforceability 31
a) Compliance with EA decisions 32
b) Applicants can seek support from local courts 33
c) Applicants can seek support from the arbitral tribunal 34
3) Complicating compliance factors 34
B. Modification of the EA’s decision by the EA or
the arbitral tribunal 35
C. Settlement of the dispute 36
Annex I - Overview of the First 80 ICC EA Applications 37
Annex II - ICC National Committees’ Answers to

Questionnaire on the Status of EA Proceedings under
Local Law 42
659
4 ICC Commission Report
B. Summary of key conclusions be understood as an “applicability test” of the EA

Provisions. Arguably, this applicability test does
7. The Task Force analysis of the first 80 ICC EA not bind the EA if the Application does proceed,
cases and 45 National Reports reveals that there is no as the test is performed only on the basis of the
universal approach to EA proceedings. This variety is Application as such and without having the benefit
apparent with respect to threshold issues, procedural of the respondent’s views. Thus, jurisdictional and
matters, substantive standards and post-emergency admissibility issues remain to be decided by the EA,
arbitration considerations, and is first and foremost after the President’s decision on the applicability of the
the consequence of the choice made in the ICC Rules EA Provisions.
to leave to the EA a considerable degree of discretion
and flexibility. Acknowledging this advantage, the 13. Importantly, while the President has on very
Report intends to contribute to the predictability of EA rare occasions used his power to decide that the
proceedings while leaving the EA’s flexibility intact. EA Provisions do not apply and thus rejected the
Application, the President has in some cases allowed
8. A key finding based on the cases analysed in this the EA Application to go forward subject to the
Report is that relief has been granted only in a minority EA’s final determination on threshold issues under
of ICC EA Applications. But this may not, of itself, be Article 29(5) or 29(6). Even in the absence of a specific
surprising: the nature of interim relief is such that it is request, the EA will have to decide on such threshold
only in exceptional cases that urgent relief is justified. issues if – as this has rather frequently been the case –
Indeed, this appears to have been the experience with the respondent invokes the EA’s lack of jurisdiction
EA mechanisms under most other arbitral rules. It based on Article 29(5) or 29(6).
appears from the analysed cases that EAs are minded
to strictly apply particular threshold requirements set 14. As to the jurisdiction of the EA. Under the
by the EA Provisions, such as the key requirement ICC Rules (Appendix V, Article 6(2)) the EA “shall
that relief “cannot await the constitution of an arbitral determine … whether the emergency arbitrator
tribunal” (Article 29(1)). Yet, EAs have in multiple cases has jurisdiction to order Emergency Measures”. No
been persuaded to grant interim relief and the EA explicit test is set forth in the ICC Rules to assess
Provisions are thus an important addition to the ICC such jurisdiction however. EAs have often considered
Rules, filling a previously existing void. elements of Articles 29(5) and 29(6) as part of their
threshold analysis on jurisdiction or even considered
1) Threshold issues elements of Article 29(1). The Task Force considers
the jurisdictional test to be performed by the EA to
9. Issues of applicability, jurisdiction and/or include whether an arbitration agreement concluded
admissibility have proven important as they were under the 2012 ICC Rules exists and to additionally
involved in 56 of the first 80 ICC EA cases studied, require an analysis of the elements of Articles 29(5)
with 21 EA Applications rejected in whole or in part on and 29(6) of the ICC Rules where the respondent
these grounds. Of these 21 EA Applications, three were raises issues related to these elements. Whether or
rejected in whole or in part by the President of the ICC not the latter is part of a jurisdictional test or to be
International Court of Arbitration (the “President of the qualified as a separate threshold issue may depend
ICC Court” or “President”) as part of the President’s on the specific national law or laws relevant to the
“applicability” test pursuant to Appendix V, Article 1(5) Application. It is arguable that applicability overlaps
of the ICC Rules. with jurisdiction issues. As such, the same issues
analysed by the President of the ICC Court when
10. There is no general consensus on the exact determining applicability may fall to the EA to be
definitions of what constitutes “applicability”, determined when analysing jurisdiction. The Task Force
“jurisdiction” or “admissibility”. For example, some EAs does not consider the urgency test of Article 29(1) to
have reviewed the criteria set forth in Articles 29(5) be a jurisdictional test, since this test focuses on the
and 29(6) as part of their analysis of the “admissibility” measure sought in the particular circumstances rather
of the Application (pursuant to Article 6(2) of than on the more general question of the existence and
Appendix V) along with the criterion of Article 29(1), scope of the arbitration agreement.
while others consider “admissibility” an issue of
“jurisdiction”. Likewise, many of the topics raised as 15. Many jurisdiction challenges have been raised
jurisdictional may also be considered as affecting in the context of one or more objections based on
admissibility and applicability. multi-tiered dispute resolution clauses, date of the
agreement, concurrent jurisdiction, non-signatory/
11. In order to give guidance to parties and EAs standing, or questions of the scope of relief/authority
on how to address those preliminary and procedural of the EA. Each of these objections turns on its
issues, a summary of the Task Force’s findings is set own particular facts and application of relevant
out below. legal principles.
12. As to the applicability of the ICC Rules. 16. While there is no specific deadline in the EA
Under the ICC Rules (Article 1(5) of Appendix V), the Provisions for making jurisdictional objections, parties
President of the ICC Court “considers” on the basis and EAs are encouraged to raise jurisdictional issues
of “the information contained in the Application” as early as possible to allow them to be considered to
whether the EA Provisions apply with reference the fullest possible extent despite the time constraints
to Articles 29(5) and 29(6). These criteria have to inherent to EA proceedings.
ICC Publication 895-0 660

5
17. As to the admissibility of the Application. early as possible any mandatory provisions of relevant
Under the ICC Rules (Article 29(1)), a party may make national laws. Soft law norms, albeit less relevant,
an Application for emergency measures when it “needs might inspire EAs in their procedural discretion.
urgent interim or conservatory measures that cannot
await the constitution of an arbitral tribunal”, and thus 23. Acknowledging that EA proceedings are
this criterion is to be understood as an admissibility demanding on EAs and parties alike, the Task Force
test. After undertaking a prima facie assessment has included examples of case management
of whether the requested measure could await the techniques that the EA and the parties can use to
constitution of the arbitral tribunal at the admissibility promote efficiency of the EA proceedings. Parties
stage, EAs would subsequently further consider and emergency arbitrators are encouraged to consult
urgency when ruling on the merits of the Application. the ICC Note to Parties and Arbitral Tribunals on the
Conduct of the Arbitration under the ICC Rules of
18. The Task Force considered that “urgency”, as Arbitration (see Section V on “Emergency Arbitrator”)
a test to be met on the merits of the Application, is and the ICC Emergency Arbitrator Order Checklist. 2
not to be measured only by reference to the test of The Order Checklist is a tool that fosters uniformity as
whether the measures requested “cannot await the to form and hence facilitates the Secretariat’s informal
constitution of an arbitral tribunal” as set forth in review of the Order when time is of the essence. An
Article 29(1) of the ICC Rules. Rather, the reference to initial telephone case management conference was
the relief not being able to await the constitution of the also highly recommended, and such conference
tribunal provides temporal guidance on one aspect of was held in a substantial number of cases. The case
what may constitute the necessary “urgent interim or management conference can be used not only to
conservatory measures”. address purely procedural issues but also to identify
any temporary orders needed pending the final EA
19. The Task Force also supported treating urgency Order, decide how evidence will be presented and
separately, first as part of the admissibility requirement discuss the substantive standard to be applied in
of Article 29(1), and second, as part of the merits. In determining the Application.
this way, the parties can consider arguing urgency
afresh to the fully constituted arbitral tribunal (the 24. Although permitted by some other institutional
admissibility requirement of Article 29(1) by definition rules, the conclusion of the Task Force is that true
does not apply in that context) and such approach ex parte Orders - where the Order itself is issued prior
may also limit any potentially preclusive effect an EA to the respondent being notified of the Application -
finding of urgency (or lack of urgency) may have on are incompatible with Article 1(5) of Appendix V of the
any judicial remedy. ICC Rules. There was some support for a less onerous
form of ex parte procedure in which the EA might
20. The EA’s determination of threshold issues is not issue an initial Order to preserve the status quo for the
binding upon the arbitral tribunal once constituted duration of the EA proceedings before the responding
pursuant to Article 29(3) of the ICC Rules. Indeed, party has filed its response. Due process concerns
given the absence of the time constraints inherent in have been voiced to which procedural solutions have
EA proceedings, the tribunal deciding on the merits been proposed including granting the respondent
may decide to re-examine any objections, consider a very short deadline to object to the temporary
different evidence, or otherwise approach the issue in measure and/or limiting the duration of the temporary
any way it wants irrespective of the EA’s Order. measure (unless extended after the respondent has
been granted an opportunity to be heard on it).
21. The EA Provisions do not specify the law
applicable to threshold issues. Most EAs consider 25. Given the time constraints and limited effect
that they are not bound by the lex contractus, yet, in of the EA proceedings, the EA should at a minimum
a significant number of cases, EAs found that their consider adopting some of the typical procedural
determination was to be guided by, but not bound by, innovations in arbitrations under the ICC Expedited
relevant national law and/or the lex arbitri. Procedures Provisions of Appendix VI to the ICC Rules.
Consequently, EAs could in appropriate circumstances
2) Procedural matters decide the case on documents only, with no hearing
and no examination of witnesses, and limit the number,
22. Subject to any agreement of the parties and scope and length of submissions. The only limit to
any applicable mandatory law, Appendix V provides the EA’s discretion is to ensure that each party has a
limited guidelines and encourages flexibility. The EA’s reasonable opportunity to present its case.
wide discretion has been embraced by most EAs
who, eschewing any explicit reliance upon national 26. In most cases however, EAs have adopted a
procedural laws, choose instead to adopt procedures more classical approach, with a hearing and without
that best serve the needs of a particular case and witness evidence.
to resolve the practical and procedural challenges
created by the nature and urgency of the Application.
In that context, prior consultation with the parties on
procedural decisions may not be practically feasible,
although parties are invited to identify to the EA as 2 All ICC Notes and Checklists are available at https://iccwbo.org/
dispute-resolution-services/arbitration/practice-notes-forms-
checklists/ and in the ICC Digital Library (http://library.iccwbo.
org/dr-practicenotes.htm).
661 ICC Publication 895-0

27. It is the applicant’s burden to establish a prima (fumus boni iuris), ii) the risk of irreparable harm
facie compelling case that the requested measures are (periculum in mora), iii) the risk of aggravation of the
justified and required. Because many Applications have dispute, iv) the absence of prejudgment on the merits,
focused on merely preserving the status quo pending and v) proportionality/balance of equities. 3 EAs tend
appointment of the tribunal deciding on the merits, to assess which elements are relevant in light of the
extensive factual allegations are not always required. particular circumstances of the case, and similarly
which weight is to be afforded to each of them.
28. As in any other ICC procedure, if a respondent
fails to participate, it should still be notified of all 34. EAs have also taken into account secondary
communications in the emergency arbitration. considerations such as the provision of security from
the requesting party in accordance with Article 28
29. The ICC EA proceedings are almost invariably of the ICC Rules and whether the relief requested is
concluded within, or very shortly after, the 15-day appropriate. Orders granting security remain rare in
deadline foreseen in the ICC Rules. EA practice. There is no uniform approach as to the
limits of what could be appropriate relief, although it
3) Substantive standards seems understood that the requested measure must
be of a preliminary nature independent of the final
30. As to the norms governing consideration of EA relief sought. It is unsettled whether or to what extent,
Applications, and in the absence of prescriptive norms declaratory relief is available in EA proceedings.
applicable to EAs, most EAs have applied substantive
criteria developed in connection with the granting of 4) Post-emergency arbitration considerations
interim measures by arbitral tribunals and by reference
to standards distilled from international arbitration 35. As EA proceedings have become more prevalent,
practice rather than in accordance with any specific concerns about the enforceability of EA decisions
domestic laws. This is not to say that the lex contractus have given rise to numerous debates. Enforceability
or the lex arbitri have not sometimes been considered. concerns have principally arisen from the status of
An approach based on international practice is the EA, the interim nature of the EA decision and the
consistent with the parties’ expectations and will specific form of the EA decision. The report considers
encourage predictability and uniformity of results. these hurdles to enforceability based on an analysis of
Since the criteria governing the granting of interim 45 National Reports, keeping in mind that they should
relief are arguably best qualified as procedural rather not be overstated as the data suggests that, in the
than substantive law norms, reliance on any domestic vast majority of cases, parties comply voluntarily with
norms might also be considered less appropriate. EA decisions. In practice, the responding parties may
be inclined to comply voluntarily with EA decisions
31. As mentioned, the requested urgent measures in order to avoid the negative consequences non-
are admissible when they “cannot await the compliance may have in the arbitration on the merits.
constitution of an arbitral tribunal” (Article 29(1) of the
ICC Rules). In practice, the interpretation and scope 36. Given the relatively recent nature of EA
of said requirement has been far from uniform and proceedings, and with the exception of Hong Kong,
EAs have also considered additional criteria stemming New Zealand and Singapore, there is at present no
from international practice of arbitral tribunals with provision in national laws expressly providing for
interim measures. enforcement of EA orders and, similarly, there is
limited case law. Consequently, the analysis set forth
32. The urgency criterion is a high standard. The in the Report is only based on the views of National
lack of sufficient urgency is a very common basis for Committees and Task Force members and should be
denial of an emergency measure. In addition to the taken with caution.
urgency, in the sense of a relief which “cannot await the
constitution of an arbitral tribunal” (Article 29(1)), EAs 37. From the analysis of the National Reports, no
have also considered other urgency factors such as, uniform interpretation but only trends emerge:
inter alia, the applicant’s contribution to the urgency or
whether the applicant has demonstrated that the relief (i) Most reports from countries that have incorporated
requested avoids imminent or irreparable harm. The the UNCITRAL Model Law tend to favour
application of the latter criterion as a decisive element enforceability of EA decisions.
in itself arguably increases the standard of urgency (ii) In those countries where the UNCITRAL Model
required. The Task Force notes that while the criterion Law has only inspired the local arbitration law, the
of the risk of irreparable harm has regularly been position as to enforceability varies widely.
considered, it has not been applied as a relevant factor
(iii) In the USA, where the UNCITRAL Model Law plays
consistently, let alone as a self-standing condition,
little or no role, there is a growing body of case
whether as part of the urgency test or otherwise as
law on EA decisions, in which such decisions are
part of the substantive test.
treated just as interim arbitral awards.
33. In addition to the urgency requirement, EAs (iv) In countries where statutory provisions allow
routinely consider a mix of substantive criteria arbitral tribunals to grant interim measures,
applicable in deciding applications for interim
measures outside the EA context. These criteria
include i) the likelihood of success on the merits
3 See infra paras. 151 et seq. of the Report.

7
national laws and practice often draw distinctions 44. Section IV provides commentary on post-EA
between domestically seated and foreign proceedings considerations such as enforcement of
seated arbitration. the EA’s decision, modification of the EA’s decision and
(v) Where arbitral tribunals do not have general the impact of the EA process on settlement. While this
powers to grant provisional and conservatory last Section draws heavily on the feedback received
measures either by express provision of the law from the Secretariat, it is not intended to be exhaustive.
or because the silence of the law is interpreted This is because the Secretariat is not systematically
as a prohibition, the direct enforceability of informed of whether the parties have settled or simply
EA decisions is unlikely. withdrawn the case. More often than not, parties do
not share such information. Furthermore, Section IV
38. The characterisation of the EA decision as an also draws heavily on the input received from ICC
“order” or an “award” under the relevant national law National Committees.
is of concern in some jurisdictions when it comes
to enforceability, while in most jurisdictions this 45. Annex I provides an overview of the first
distinction as such is not decisive. It is clear to most 80 ICC EA cases conducted under the ICC Rules.4
commentators of the New York Convention that
46. Annex II is a summary table of the material
interim measures differ from final awards due to the
predominantly provided by ICC National Committees
provisional nature of interim measures as opposed
on the topic of post-EA proceedings enforcement and
to the final nature of an award. Hence, except in few
related issues. 5
jurisdictions, enforceability of orders is unsettled.
39. Notwithstanding such uncertainty, the increasing

II. THE TASK FORCE WORK UNDERLYING
use of EA proceedings worldwide suggests that users
THIS REPORT
are not discouraged by enforceability concerns. This
is so because EA proceedings benefit from high levels
of compliance by the parties, from the support of local A. Scope of the Task Force work
courts and from the tribunal on the merits.
47. In line with its mandate, the Task Force collected
40. Compliance issues related to the ordered and evaluated experience with EA proceedings under
emergency measures, excluding costs, were the ICC Rules and other major sets of arbitration rules.
encountered in only three cases out of the 23 ICC EA Further, the Task Force collected information from
proceedings where an emergency measure was individual jurisdictions on mandatory rules impacting
ordered. the EA proceedings and on the enforceability of EA
Orders.6
41. In the event of non-compliance, the successful
applicant can attempt to seek support from local 48. Emergency arbitration is defined as a procedure
courts in an enforcement action, particularly through which a party unable to await the constitution
in UNCITRAL Model Law inspired countries, or of the arbitral tribunal can seek to obtain urgent interim
potentially in a breach of contract claim. Interestingly, or provisional relief prior to, or independent from, an
EA decisions, even if not complied with, could arbitration procedure on the merits. The Task Force has
influence local courts to support the decision of not independently studied the availability of interim
the EA. relief within arbitration proceedings on the merits,
or considered expedited arbitration on the merits, or
the availability of interim relief in state courts prior
C. Structure of the Report
to or pending an arbitration on the merits. As interim
relief in arbitration on the merits or in state courts are
42. After this Introduction, Section II addresses the
alternatives to EA proceedings and thus comparable
work undertaken by the Task Force and, in particular,
by nature, the Task Force work has touched upon
the sources of information considered in preparing this
the practical advantages and disadvantages of EA
Report. This includes an explanation of the Task Force’s
proceedings over these alternatives.
analysis of the ICC EA decisions, which are referred to
throughout the Report and summarised in Annexes I
49. One particular area of contention specific to
and II.
emergency arbitration under the ICC Rules has been
its non-applicability to treaty-based investor-state
43. Section III provides the Task Force’s analysis
arbitration. Under Article 29(5) of the ICC Rules, EA
of selected contentious areas in the practice and
proceedings do not apply to non-signatories of the
procedure associated with EA proceedings, and
arbitration agreement. The ICC Commission Report on
identifies emerging common practices (or divergences)
Arbitration Involving States and State Entities under
on a number of key issues. The Report primarily
the ICC Rules of Arbitration, which was issued in light
draws on the experience of the Task Force and
of the 2012 Rules revision, considered that the purpose
Commission Members as well as the Secretariat in
identifying these conventions. Section II also provides
a statistical commentary based on an analysis of the
first 80 ICC EA proceedings.
4 Where appropriate, the analysis is incorporated into Sections II
and III of the Report.
5 See supra “Note to readers” p. 3 of the Report.
6 See Annex II of the Report.

17
5) Impact of the EA’s decision on threshold issues be appropriate, taking into account the nature and the
before the arbitral tribunal urgency of the Application”. It adds that the EA, in all
cases, “shall act fairly and impartially and ensure that
92. Article 29(3) of the ICC Rules explicitly provides each party has a reasonable opportunity to present
that an EA’s Order does not bind the arbitral tribunal its case”. The EA’s discretion, on the other hand, is
“with respect to any question, issue or dispute” and constrained as a practical matter by Article 6(4) of
the tribunal is free to modify, terminate or annul any Appendix V to the ICC Rules, requiring that the EA
Order made by the EA. This presumably includes render the Order within 15 days of transmission of
an EA’s decision on jurisdiction and/or admissibility the file (unless an extension is granted). At a general
with respect to the Application. Theoretically, this level, and as borne out by a review of the 80 first ICC
might arise for example in the context of a request to EA cases, the Task Force confirms that EAs use their
terminate or modify any emergency measures in place broad discretion to best serve the needs of a particular
once the tribunal is constituted. case and resolve the practical and procedural
challenges created by the expedited timetable.
93. While not binding, an EA’s Order on jurisdiction A review of the ICC EA Applications also confirms that
could have some indirect impact on the arbitral tribunal no major issues of procedure have surfaced that could
to the extent that the tribunal is considering the same not be resolved by the EA.
questions and evidence. But, as noted, the grounds for
jurisdiction in the merits phase may be quite different. 98. Perhaps even more so than in other parts of this
Thus, for example, one EA found it had no jurisdiction Report, this Section is not intended to be prescriptive
over a non-signatory party but noted that this was or to advocate universally applicable standards of
without prejudice to whether the non-signatory could process. The ICC EA cases reviewed concern diverse
be a proper party to the hearing on the merits.64 topics in different regions of the world, triggering
diverse challenges with diverging procedural solutions
94. Likewise, with respect to admissibility, an EA’s applied by the respective EAs. Procedural flexibility is
finding that the matter was sufficiently urgent so firmly embedded in Appendix V, and this Report is in
that it could not await the constitution of the tribunal no way intended to stifle that flexibility.
could impact the tribunal’s consideration of urgency,
although (as noted) the urgency test is likely to be 99. Notwithstanding the foregoing, the Task
assessed based on the different timeline of whether Force concludes that it would be useful to describe
relief can await the final award. Similarly, should the procedural issues in the EA context, only as a potential
EA find the Application inadmissible because it could source of inspiration and information for future parties
await the constitution of the tribunal, this would be of and EAs. Thus, this Section points out procedural
limited relevance to the consideration of urgency in the questions that have arisen in cases, describes how
context of a request for interim relief made before the they have been answered by EAs in ICC proceedings,
tribunal deciding on the merits. provides guidance on common procedures employed
by EAs, and makes specific recommendations where
the Task Force is convinced that there is no room for
C. Procedural matters
doubt or interpretation.
1) Introduction 2) Rules and norms governing the procedure

95. This Section of the Report discusses the EA
100. As a starting point, EAs must apply the ICC Rules
proceedings from the transmission of the file to the
in as far as the EA proceedings are concerned, which
EA until the rendering of the Order, not including the
as mentioned, give the EA considerable discretion.
threshold issues and standards for admissibility of an
Article 5 of Appendix V, in full, reads as follows:
Application pursuant to Article 29 and Appendix V
of the ICC Rules. This discussion of procedural issues 1. The emergency arbitrator shall establish a
draws upon the analysis of the first 80 ICC EA cases procedural timetable for the emergency arbitrator
and feedback from the Task Force, other Commission proceedings within as short a time as possible,
members, and the Secretariat. normally within two days from the transmission of
the file to the emergency arbitrator pursuant to
Article 2(3) of this Appendix.
96. It should be noted at the outset that the
EA enjoys wide discretion to tailor the procedure 2. The emergency arbitrator shall conduct the
employed to the needs of the case. Subject to proceedings in the manner which the emergency
any agreement of the parties and any applicable arbitrator considers to be appropriate, taking
mandatory laws of due process, national procedural into account the nature and the urgency of the
Application. In all cases the arbitrator shall act fairly
laws and soft law should not impinge on the EA’s
and impartially and ensure that each party has a
discretion in this regard. reasonable opportunity to present its case.
97. Indeed, Article 5(2) of Appendix V to the 101. As pointed out in the Secretariat’s Guide to ICC
ICC Rules provides that the EA “shall conduct the Arbitration, “[Article 5(2) of Appendix V to the ICC
proceedings in the manner which the [EA] considers to Rules] is broader than Articles 19 and 22(2), which
require an arbitral tribunal in all circumstances to
consult with the parties and generally respect any
64 ICC EA Case No. 46.

agreement they may reach”.65 In as far as respect for guidance. This in itself does not mean that such norms
the parties’ agreement on procedure is concerned; the have not been applied or provided inspiration in
Task Force did not have the impression that there is specific cases, whether implicitly or explicitly. Members
any material significance to the differences between of the Task Force, however, have observed that soft
Articles 19 and 22(2) of the ICC Rules and Article 5(2) law norms are generally not designed to govern
of Appendix V. However, consulting the parties “in all interim relief requests and may, in whole or in part, be
circumstances” before taking decisions on process unsuitable for that reason. At the same time, EAs have
was considered by many on the Task Force to be been guided by soft law where in the exercise of their
incompatible with the strict time constraints of the EA procedural discretion they take decisions on issues that
process. It was pointed out that an EA, for example, is are addressed by such soft law norms.
expected under Article 5(1) of Appendix V to establish
a procedural timetable “within as short a time as 3) Temporary measures protecting the status quo
possible”. Accordingly, while consultation with the
parties on a draft of such a timetable was considered 106. Whether an EA could grant emergency measures
highly desirable by the Task Force – and such ex parte was a debated topic within the Task Force.
consultation indeed very frequently took place in the Some Task Force members emphasised that ex
first 80 EA proceedings – circumstances may arise in parte measures should be available if arbitral interim
which prior consultation with the parties on procedural measures are to be a complete alternative to going to
decisions may not be practically feasible. courts. In this respect, some forms of interim measures
can, by their very nature, only be effective if they are
102. The ICC Rules do not provide EAs with guidance implemented without the respondent’s knowledge.
regarding the process to be applied beyond Article 5 One commentator noted that the need for ex parte
of Appendix V. In this respect, the Task Force relief is driven in part by the fear of a respondent
focused primarily on whether EAs applied either moving assets out of the jurisdiction, and that this
national procedural laws and/or soft law norms may be less concerning in the context of an arbitral
(e.g. the IBA Rules on The Taking of Evidence in award enforceable under the New York Convention in
International Arbitration or the IBA Guidelines on Party 159 countries. Regardless of whether indeed ex parte
Representation in International Arbitration). measures should be available as interim measures,
the Task Force has limited its consideration only to
103. First, an analysis of the first 80 ICC EA whether the ICC Rules allow ex parte emergency
proceedings reveals that EAs did not tend to refer measures. The Task Force concludes that true ex
to, or take explicit inspiration from, any national parte emergency Orders, where the respondent was
procedural laws. It cannot be ruled out that in not notified, was not given the opportunity to be
exercising their discretion, some EAs did in fact draw heard and in which the EA issues a final EA Order are
inspiration from national procedural laws. Yet, neither incompatible with the ICC EA Provisions.
the practice in the ICC EA cases nor the views of the
Task Force members suggests EAs should consider 107. This conclusion is a consequence of Article 1(5)
themselves bound by any (non-mandatory) national of Appendix V, which provides that once the President
procedural norms. of the ICC Court is satisfied that the EA Provisions
apply, “the Secretariat shall transmit a copy of the
104. Of course, where potentially applicable, EAs have Application and the documents annexed thereto to the
in practice sought to take into account mandatory responding party”.
provisions of relevant national laws (i.e. arising from
the law of the seat, of the agreement, of the arbitration 108. As such, the fact that the Application may
agreement or of the possible place(s) of enforcement be transmitted to the respondent before the EA’s
of the Order). Such caution is unsurprising given that, appointment precludes the possibility of an EA issuing
even though the EA’s decision is in the form of an truly ex parte emergency Orders, i.e. without the
“order” and not an award, an EA’s decision might still respondent even being aware of the Application.67
be the object of exequatur in some jurisdictions and In their analysis of the first ten ICC EA Orders,
thereby subject to scrutiny.66 Accordingly, EAs have A. Carlevaris and J. Feris confirmed the following:
on occasion been confronted with the daunting task
of seeking to identify and navigate potentially relevant There is no provision for ex parte proceedings. The
mandatory provisions of national laws within the very Secretariat is required to notify the responding
party of the Application. In one case, the applicant
limited time given to them. For this reason, it goes requested that the emergency arbitrator be appointed
without saying that the parties should identify to the without giving notice to the responding party. Once
EA as early as possible the process for identifying any the President had decided that the proceedings
such relevant norms. should be set in motion pursuant to Article 1(5) of the
Emergency Arbitration Rules, the Secretariat notified the
105. Second, a review of the ICC EA Orders provides Application to the responding party after first informing
little evidence that specific soft law norms have been
regularly applied to the EA proceedings or used as
67 The same conclusion applies in the SCC Emergency Procedure,

which requires that notice be given to the responding party. See
J. Lundstedt, “SCC Practice: Emergency Arbitrator Decisions:
65 See Secretariat’s Guide to ICC Arbitration, op. cit. note 17, at p. 298, 1 January 2010 – 31 December 2013”, available at p. 1, https://
§ 3-1058(d). sccinstitute.com/media/29995/scc-practice-2010-2013-
66 See infra Section IV, “Post-emergency arbitration considerations”. emergency-arbitrator_final.pdf.

19
the applicant that it would do so. In accordance with - and in this specific case temporarily refrain from
Article 5(2) of the Emergency Arbitrator Rules, the calling the bank guarantee - before the respondent
emergency arbitrator made sure that each party had filed its response to the Application.71 In at least four
an opportunity to present its case before issuing
the order.68 other instances such measures were requested but not
granted. In one of those cases, the EA determined he
109. The ICC Rules thus do not contain a provision had no jurisdiction to decide on the Application at all.
similar to the Swiss Rules of International Arbitration, In another case, the request for provisional measures
which, at Article 26(3) combined with Article 43, was not explicitly addressed, for other reasons
allows ex parte relief by an EA. Article 26(3) reads unrelated to the EA’s power to order such provisional
as follows: “In exceptional circumstances, the arbitral measures. It has thus been deemed appropriate by at
tribunal may rule on a request for interim measures by least one EA, without having heard the respondent,
way of a preliminary order before the request has been to issue such a provisional measure, (in that case
communicated to any other party, provided that such enjoining the respondent from drawing under a letter
communication is made at the latest together with of credit for the duration of the EA proceedings). Such
the preliminary order and that the other parties are a temporary measure was issued to preserve the status
immediately granted an opportunity to be heard”.69 quo, during the EA proceedings, without pre-judging
the merits of the EA Application but should not be
110. While it is clear that in ICC EA proceedings, the understood as a (final) EA Order in which eventually
Application must be transmitted to the respondent, the the respondent will, and should, have the opportunity
Secretariat has acknowledged that: to be heard.
While not expressly mentioned in the Rules, it is 114. Despite the existence of this single precedent, it
conceivable that the emergency arbitrator might must be noted that several members of the Task Force
issue an initial order (e.g. a freezing order or an order
and contributors to the Commission voiced opposition
otherwise maintaining the status quo) before the
responding party has filed its response. Depending on even to this limited form of temporary measure to
the circumstances, granting the responding party an preserve the status quo during the EA proceedings.
opportunity to comment after the initial order has been Critics argue that such measures cannot be reconciled
rendered might still be considered as reasonable within with the respondent’s right to be heard, particularly
the meaning of Article 5(2) of Appendix V.70 where the ICC Rules do not expressly authorise the EA
to grant such temporary measures. Instead, they point
111. In one of the first 80 ICC EA Applications, the
to the duty in Article 5(2) of Appendix V to ensure that
applicant sought an immediate order on an ex parte
“each party has a reasonable opportunity to present
basis, to restrain respondents from receiving payment
its case”. They suggest that the EA may, for example,
related to bank guarantees and bonds. The EA
not be aware when rendering such a temporary
immediately rejected this request on the basis that
measure that the respondent has a particularly strong
the ICC EA Provisions did not allow to do so without
and urgent countervailing interest in executing certain
hearing the respondent or at least providing it the
measures that could trump the interest of the applicant
opportunity to present its case.
in maintaining the status quo.
112. While it is therefore uncontroversial that true
115. On the other hand, those in favour of the EA
ex parte orders are not available under the ICC EA
having such authority cite to Article 29(2) of the ICC
Provisions, the question is open whether the EA could
Rules, by which the parties have agreed to “comply
grant a provisional measure for the duration of the
with any order made by the emergency arbitrator”,
EA proceedings aimed at protecting the status quo,
as further support that the EA may issue a temporary
even before the respondent has had an opportunity to
measure intended to maintain the status quo during
respond to the Application.
the EA proceedings. Similarly, they rely on the parties’
113. Indeed, a review of ICC EA cases reveals at least general duty to arbitrate in good faith and the wide
one instance where an EA has specifically granted a discretion of the EA under Article 5 of Appendix V to
request by the applicant to order the respondent to justify the rendering of such temporary measures in
maintain the status quo during the EA proceedings appropriate circumstances.
116. Based on the debates in the Task Force and

within the Commission, it is fair to conclude that there
is no commonly accepted view, nor a clear majority
68 A. Carlevaris, J. Feris, supra note 22, p. 32.
69 In its Answer to the Task Force survey, the SCAI mentions a case
position, on this topic. Practice and the review of the
where an ex parte measure was granted; it consisted in prohibiting first 80 ICC EA cases also show, however, that it is
the respondent from disposing of its assets and specific goods; common that applicants struggle with the question of
according to the SCAI’s Answer: “The EA found that the applicant how to ensure that the relief they seek is not frustrated
had a legitimate interest in obtaining orders prohibiting the
respondent from disposing of its assets and specific goods, and
before an EA can issue an Order. In this respect, the
that such interest substantially outweighed the harm that the Task Force notes that it is not unusual for some form
respondent would likely suffer as a result of these measures”. See
also Art. 50.2 of the Arbitration Rules of the Arbitrators and
Mediators Institute of New Zealand (AMINZ) (allowing a party to
file an application for appointment of an EA to issue preliminary
orders without notice to the other side “where to give notice would 71 In ICC EA Case No. 21, the applicant requested a temporarily
defeat the entire purpose of the application”). measure to order the respondent to immediately refrain from
70 See Secretariat’s Guide to ICC Arbitration, op. cit. note 17, p. 298, at executing the letter of credit. The request was temporarily granted
§ 3-1058(d). but later revoked in the final EA Order.

of temporary measure preserving the status quo Arbitral Tribunals on the Conduct of the Arbitration
during the EA proceedings to be ordered, or at least under the ICC Rules of Arbitration.72 This would mean,
considered (and sometimes in agreement with the for example, that EAs, like arbitrators in expedited
Respondent) at the outset of the EA proceedings procedures, could in appropriate circumstances i)
before the respondent has had an opportunity to decide the case on documents only, with no hearing
be heard. The contentious factor is the extent of the and no examination of witnesses, and ii) limit the
EA’s power to render such measures prior to the number, scope and length of submissions. Although a
respondent being heard. hearing did take place in the vast majority of ICC EA
cases so far, no hearing was held in a few cases.
117. Based on the Task Force’s discussions, it is
suggested that the competing views expressed 121. Third, even if time is of the essence in EA
might be able to be reconciled, depending on the proceedings, and even if EAs benefit from great
circumstances of the case. In practice, procedural discretion in the management of the procedure, due
solutions might be found in which the respondent’s process remains a fundamental requirement. EAs must
right to be heard is safeguarded and an applicant’s make sure, and in the cases reviewed they have made
urgent interest in a temporary measure preserving sure, that each party has a reasonable opportunity to
the status quo for the duration of the EA proceedings present its case.
is done justice. Various procedural mechanisms
have been suggested. For example, in appropriate b) Specific issues
circumstances, the EA could notify the respondent
that the the requested provisional order will be granted 122. Challenge of the EA. Article 3 of Appendix V of
absent the respondent’s objection within a very the ICC Rules provides for challenges of EAs. In four
short deadline. Alternatively, the EA could issue the of the ICC EA cases, the EA was timely challenged.
requested temporary measure while, at the same time, All four challenges were decided by the ICC Court,
expressly allowing the respondent the opportunity to after allowing the EA and the non-challenging party
object to it within a very short time period. A further the opportunity to submit comments, each within
alternative envisions the temporary measure being four days from the day the challenge was made.
granted for only a very limited duration so that it The challenges were not just on the basis of alleged
expires as of right unless extended by way of a full conflicts but also based on the EA’s qualifications and
hearing. Any of these scenarios would allow the EA even misconduct. All challenges were rejected.
to hold an urgent teleconference to hear both parties
before either confirming or withdrawing his or her 123. Case management conference. Holding such a
temporary decision. conference is not required. In the ICC EA Applications,
there was no such conference in 55 cases. While
4) Case management, written submissions, case management conferences were not common
evidence and hearing in the early EA proceedings, case management
conferences were often held by phone in more recent
118. The Task Force further examined the way EA proceedings at the very early stages, after the
procedures were concretely handled in the first 80 transmission of the file to the EA. There is widespread
ICC EA cases, to determine whether there are any support among the members of the Task Force for
common practices. Before dealing with several specific an early telephone case management conference.
issues (b), the following general considerations can be Likewise, ICC supports the use of case management
identified (a). conferences and can provide resources on request.
EAs have used such conferences for many purposes,
a) General considerations such as:
119. First, as already noted, Article 5(2) of Appendix V • setting the timetable;
gives broad discretion to EAs in the conduct of • determining whether, when and how a hearing
the proceedings; indeed, greater than the powers should be held;
arbitrators enjoy under Articles 19 and 22 of the ICC • agreeing how evidence would be presented;
Rules, which oblige them to consult with the parties
• agreeing, where possible, on the appropriate
before adopting procedural measures. The practice
standard to apply for considering the Application;
of the ICC EA cases shows that EAs have embraced
this broad power to tailor procedures to suit the • clarifying emergency relief sought;
specific needs of the broad variety of cases considered • addressing any issues regarding the obligation to
and to overcome the practical obstacles faced in an file a Request for Arbitration within 10 days of the
expedited procedure. Application; and
• simply allowing for the key players in the case to
120. Second, it has been suggested in the Task Force
get acquainted to ensure as smooth as possible
that the EA’s powers (subject to mandatory provisions
a process.
of relevant applicable laws) include as a minimum
the powers of arbitrators acting under the Expedited
Procedure Provisions introduced in the ICC Rules
of 2017. More specifically, reference is made here
to Articles 3(4) and 3(5) of Appendix VI of the ICC
72 Reference is made to the Note dated 1 January 2019, paras. 93 et
Rules and to their analysis in the Note to Parties and
seq.

21
124. Procedural timetable. According to Article 5(1) on witness statements might – depending on the
of Appendix V quoted above, EAs must establish a circumstances – be inappropriate. In this respect,
procedural timetable “normally within two days from there is some evidence that where witness evidence
the transmission of the file”. This deadline was met (including from the respondent) has been permitted,
in the majority of the first 80 ICC EA cases. Often, it has led, in a very small number of cases, to the
due to the short period of time allowed and possible need to extend the 15-day deadline for rendering
delays in establishing contact with the respondent an Order. Further, some considered that given that
(especially absent email addresses), EAs wrote to the only a prima facie analysis of the evidence would be
parties as soon as possible after having received the undertaken, contemporaneous documentary evidence
file to establish – without prior consultation of the should in principle be preferred to witness testimony.
parties – a procedural timetable and basic procedural However, there is no rule preventing an applicant or
directions. In this initial communication, EAs have also a respondent from submitting witness statements or
sometimes given the parties a set period to comment expert reports, and neither is there a rule preventing
on the timetable and directions. In the same initial the EA from relying on such evidence.
communication, EAs have sometimes requested that
the parties advise whether a hearing will be requested 127. In the first 80 ICC EA Applications, witness
and even proposed the rules that would be applicable statements were submitted in 18 cases, and expert
to any such hearing (in terms of timing, place, scope, reports were filed in three cases. In only a few of
etc.), subject to the parties’ comments before a these cases, witnesses or experts were called for oral
certain date. testimony. In one exceptional case, the Application
came before the EA with several witness statements
125. Written submissions. Practice varies with respect and the applicant also requested live testimony.
to the number and sequence of written submissions. Respondent also produced several witness statements
In the ICC EA cases, the most common number of in reply. This was taken into consideration at a
submissions addressing the merits of the relief was conference with the parties when discussing the
four, being the Application, a response, a reply, and calendar. It was decided that there would be two
a rejoinder. In at least one case, the respondent rounds of submissions, and that no more documents or
filed a counter-Application seeking urgent relief.73 witness statements would be produced in the second
Statements of costs were sometimes submitted round. Finally, there was a full day hearing with all the
separately. Typically, apart from the EA submissions, witnesses being heard.
the claimant will also during the EA proceedings file
with ICC its Request for Arbitration on the merits. 128. Practice thus reveals that, in the majority of ICC
In the minority of cases, written submissions were EA cases, no witness statements and no expert reports
limited to the EA Application and a response. Given were filed and that if such statements or reports are
the fact that the Order is to be issued within 15 days filed, witness hearings and cross-examination are
of receipt of the file by the EA, and the fact that a highly unusual. There are however no absolute rules
hearing was very often held, the deadlines set for the in this regard, and it is ultimately the EA who decides
written submissions were invariably very short. The how to exercise the discretion provided for in Article 5
Task Force noted that applicants control the time of of Appendix V of the Rules with regard to witness and
submission of their Application and therefore have an expert evidence. While the parties’ right to be heard
advantage over the respondent in terms of preparation should be respected, there is no requirement that
time and planning. In addition, respondents have the EA hear (all) witnesses or experts who submitted
argued that requiring a response prior to submission statements or reports, nor must the EA rely on these
of the Request for Arbitration could give the applicant statements or reports in the eventual Order.
an unfair advantage in the arbitration on the merits.
In at least one case, the EA delayed the deadline for 129. Hearing. Among the ICC EA cases reviewed, a
the response until after the filing of the Request for hearing was held in 53 cases (in person in 20 cases
Arbitration. This could be particularly advantageous if, and by telephone in 33 cases). In 20 cases, no hearing
for example, witness statements or even expert reports took place at all. Subject to mandatory provisions
are submitted by the applicant. In setting the time of the relevant laws,74 it is up to EA to determine
table and deadlines for submissions, EAs may wish to the appropriate procedure. As discussed, the EA
take this advantage into consideration in appropriate may render the Order by deciding on documents
circumstances in order to safeguard the respondent’s only (including potentially witness statements) or
right to present its case. by conducting a hearing (where only counsel could
have the floor, or counsel and parties, or counsel and
126. Witnesses. There was much debate among the witnesses, etc.) in person or even by videoconference,
members of the Task Force on whether EAs should telephone or similar means of communication.
permit recourse to witness testimony. Some argued During the case management conference, it is usually
that relying on witness evidence could be incompatible determined whether the parties envisage holding a
with the nature of EA proceedings. Others pointed out hearing. Even if a party does request a hearing, the EA
that, in practice, there will be very limited opportunity, has no strict obligation under the Rules to hold one.
if any, to hear witnesses and that the EA’s reliance However, particularly if requested by both parties, it
74 Some laws require that a hearing be organised when a party in an

73 ICC EA Case No. 50. arbitration so requires.

may be deemed advisable to hold a hearing to ensure 6) Non-participating respondent

that both parties have an adequate opportunity to
present their respective cases. In several EA cases, a 134. In all the 80 ICC EA Applications, except in
transcript or audio recording of hearings was made two cases where the EA Rules were deemed not to
available to the parties and the EA. be applicable, the respondent participated. The ICC
EA Rules do not contain any particular provision on
5) Burden of proof non-participating respondents. During the Task Force
discussions, no consideration emerged suggesting
130. It is not completely clear whether the issue that the attitude of an EA should be different than
of burden of proof is a question of a procedural or that of a regular arbitrator when the respondent is
substantive nature, or whether this depends on the not participating. In short, the EA proceedings are to
concrete question at stake.75 In EA proceedings, the be pursued with the non-participating party being
EA will not be issuing any binding determination of notified of all communications.
disputed factual allegations. As such, the EA is not to
pre-judge the dispute on the merits. Accordingly, the 7) Time limit for the Order
standard and burden of proving factual allegations
have been of less prominence in ICC EA cases than in 135. Article 6(4) of Appendix V provides that the
arbitrations on the merits. Order shall be rendered within 15 days from the date
the file is transmitted to the EA. The same Article 6(4)
131. The allocation of the burden of proving factual provides that this time limit can be extended by the
allegations does not appear to have been highly President of the ICC Court either at the request of
controversial in the first 80 ICC EA cases. Although the EA or on the president’s motion. In ten of the first
the standards applied to the question of whether 80 ICC EA Applications, no Order was rendered due
interim relief was justified have differed,76 EAs have to withdrawal or non-applicability of the ICC EA Rules.
usually held that it is the applicant’s burden to establish Out of the 70 remaining cases:
a prima facie compelling case that the requested
measures are justified and required. This, in turn, • In 33 cases, the 15-day deadline was complied
suggests that it is the applicant who bears the burden with. The Order was made in less than 15 days in
to prove – at least to a prima facie standard – the three cases.
facts upon which the Application relies. Many ICC EA • In 32 cases, the Order was rendered between day 16
cases so far have merely sought to protect or restore and day 19.
the status quo for the duration of the arbitration on
• In 5 cases, the Order was rendered more than
the merits or seek to prevent (irreparable) harm from
19 days after the file was transmitted to the EA, in
being suffered, and as such have not essentially relied
each case after an extension was approved by the
or depended on the veracity of extensive factual
President. In one case (the longest case by far),
allegations.
the total time elapsed between the transmission
132. In so far as the burden of proof has been of the file to the EA and the Order was 30 days.
explicitly addressed, the general rule “actori incumbit These delays can primarily be attributed to parties
probatio” has often been applied by EAs, meaning that agreeing on an extensive hearing schedule
each party bears the burden of proving the facts relied affecting the procedural timetables, or a request
on to support its case. By analogy, reference has been for temporary suspension of a scheduled hearing
made in this context to Article 27(1) of the UNCITRAL resulting from an initial non-compliance of a
Rules of Arbitration providing that “[e]ach party shall respondent with a preliminary Order to maintain the
have the burden of proving the facts relied on to status quo such as the calling of a letter of credit.
support its claim or defense”. Based on these statistics, it can be concluded that
the ICC EA proceedings are almost invariably
133. In the Task Force discussions, several members concluded within or very shortly after the very
suggested that the degree of intrusiveness of the challenging 15-day deadline foreseen in the
measures sought could have an impact on the ICC Rules.
evidence to be required by an EA. The more intrusive
a measure would be, the higher the burden (on the D. Substantive standards
applicant) to prove the factual allegations relied on
in the context of the EA proceedings. Conversely, 1) Introduction
when the measure sought is less burdensome on
the respondent, an EA may be persuaded to apply a 136. This Section of the Report discusses the
lower evidentiary standard with respect to the factual substantive criteria for the determination of whether
allegations in dispute. to grant emergency relief, relying on the Task Force
analysis of the first 80 ICC EA proceedings, National
Reports, the experiences of other institutions,
feedback from Task Force members, as well as
relevant academic commentary.77 More specifically,
this Section provides a survey of the norms governing
75 G. Born, supra note 58, n° 2312: “There is little authority on the

allocation of burdens of proof in arbitral contexts”.
76 See infra Section III.D “Substantive Standards”. 77 See also Annexes I and II of the Report.

23
consideration of EA Applications (D.2), the substantive standards should apply. Further, in a number of
standards applied in determining Applications (D.3), cases the EA considered the lex arbitri only for the
and other considerations for granting emergency relief, purposes of admissibility of the EA Application,
including provision of security and the nature of the and made reference to the standards established in
relief requested (D.4). international arbitration for the substantive assessment
of the request.
2) Norms applicable to EA Applications
140. In sum, EAs have shown a preference to avoid
137. Article 29 and Appendix V of the Rules do not the application of domestic law and to have recourse
articulate any specific applicable substantive standards to “the practice generally followed by international
for the EA’s consideration of an Application. This is arbitrators”, “common principles of law”, and/or
in keeping with the non-prescriptive approach of “international sources” instead. Such an approach is
other institutional rules, which at most indicate that supported by commentators who suggest that an
the requested measure must be urgent, necessary, or approach based on international practice is more
appropriate in light of the circumstances.78 likely to be in accordance with the expectations of the
parties and to result in broadly uniform and predictable
138. The Task Force notes that, in the absence of results. 80 Whatever standard is adopted, the Task Force
prescriptive norms applicable to EAs, most EAs have encourages the early discussion of this issue, maybe
been willing to apply substantive criteria developed even at the case management conference, to try to
in connection with the granting of interim measures reach consensus.
by arbitral tribunals.79 In this respect, an analysis of
the first 80 ICC EA Applications shows that, in at least 141. Although not yet specifically addressed by an EA
49 cases, the EAs explicitly applied the substantive operating under the ICC Rules, 81 an interesting question
requirements for the granting of interim measures in concerns the relationship between EA proceedings
accordance with standards distilled from international and decisions rendered by state courts concerning
arbitration practice, rather than by reference to any interim measures. 82 Commentators have noted that
specific domestic law. As one EA put it, EAs are not while both may address the same subject matter, the
bound by the applicable substantive law governing the two fora are conceptually distinct and decision-makers
dispute “since the grant of provisional relief is not by need not reach the same result. 83
nature a matter of substantive law”.
3) Substantive criteria for granting emergency relief
139. In contrast, in a significant number of ICC EA
cases, the EA at least considered the impact of certain 142. As stated above, the ICC Rules do not prescribe
provisions of the lex arbitri and/or the lex contractus requirements for relief other than that the requested
in determining the Application. One EA explicitly urgent measures are admissible when they “cannot
considered that an EA decision must comply with await the constitution of an arbitral tribunal”
applicable or mandatory domestic law. In several (Article 29(1) of the ICC Rules). Consequently, the
cases, EAs concluded that the decision to grant EA Rules set forth in Appendix V require that the
emergency relief should be guided by principles requesting party state in its Application for Emergency
of domestic law, but ultimately found that in the Measures “the reasons why the applicant needs urgent
absence of any guidance in domestic law, international interim or conservatory measures that cannot await
the constitution of an arbitral tribunal” (Article 1(3)(e),
Appendix V to the ICC Rules). The EA Provisions were
intended to enable the parties to seek extrajudicial
78 See, e.g. SCC Rules 2017, Appendix II; LCIA Rules 2014, Art. 9B; interim or conservatory measures before the arbitral
SIAC Rules 2016, Schedule I; CIETAC Rules 2014, Art. 23: Rules of
Arbitration of the Arbitration Center of Mexico, Art. 30 Bis. In
tribunal was in a position to act under Article 28. 84
contrast, a few arbitral institutions provide a specific standard. See
e.g. ACICA Rules 2016, Schedule 1, Art. 3.5 (requiring (i) irreparable
harm; (ii) harm substantially outweighs the other party; and
(iii) reasonable possibility that the requesting party will succeed on
the merits). 80 Ibid.
79 See, inter alia, G. Born, supra note 58, p. 2464: “[T]he better view is 81 In the only case of which the Task Force is aware, a US federal court
that international sources provide the appropriate standards for issued a temporary restraining order concerning a party’s parallel
granting provisional measures in international arbitration”. See also EA Application under the ICC Rules. But the matter was settled
A. Yesilirmak, ‘Interim and Conservatory Measures in ICC Arbitral before any substantive steps were taken in the EA proceedings.
Practice, 1999-2008’, ICC International Court of Arbitration Bulletin See Alstom v. Gen. Elec. Co., 228 F. Supp. 3d 244 (S.D.N.Y. 2017)
(Special Supplement 2011), p. 10; F. Ferrari, S. Kröll, Conflict of Laws 82 A. Carlevaris and J. Feris, supra note 22, p. 36: “An interesting issue
in International Arbitration (1st ed., Sellier, 2010), p. 442; P. Sherwin, related to the impact of national laws on the emergency arbitrator
D. Rennie, “Interim Relief Under International Arbitration Rules and proceedings is the relevance of any decision made by a state court.
Guidelines: A Comparative Analysis”, American Review of This question has not yet been squarely addressed by an ICC
International Arbitration, 2010, Vol. 20, p. 323; J. Beechey, G. Kenny, emergency arbitrator … Given the frequency with which parties
“How to Control the Impact of Time Running Between the seek interim relief in the courts, the question can be expected to
Occurrence of the Damage and its Full Compensation: arise in the future”.
Compensatory and Alternative Remedies in Interim Relief 83 See, e.g. M. Goldstein, “A Glance Into the History for the Emergency
Proceedings”, Dossier of the ICC Institute of World Business Law: Arbitrator”, Fordham International Law Journal (2017), Vol. 40.3,
Interest, Auxiliary and Alternative Remedies in International p. 796 (noting the mission of Emergency Arbitration is to “provide
Arbitration (ICC, 2008) p. 109; J. Lew, L. Mistelis, S. Kröll, only so much temporary relief as is necessary to maintain the
Comparative International Commercial Arbitration, (Kluwer, 2003), effective ability of the full arbitral tribunal to address continued
p. 602. See also Interim Award of September 2003, ICC Case provisional relief once it is constituted”).
No. 12361 and Procedural Order of March 2006 in ICC Case No. 84 See Secretariat’s Guide to ICC Arbitration, op. cit. note 17, p. 294,
13856, available at http://library.iccwbo.org/. §§ 3-1051 and 3-1052; see also supra paras. 2 to 4 of the Report.

Accordingly, this narrow definition of urgency of the urgency, as part of establishing that the
contrasts with the broader discretion given under measures are in fact warranted in light of the particular
Article 28(1) of the ICC Rules to the arbitral tribunal circumstances of the case. This two-step approach has
that may order “any interim or conservatory measure been applied in some cases and is discussed above. 89
it deems appropriate”. The Task Force noted that this
distinction is in line with the EA’s role as preliminary 148. Second, whether as a threshold matter or on
means for users to obtain urgent relief pending the merits, the EA’s approach to assessing urgency
constitution of the tribunal. has not always been consistent. Article 29 of the ICC
Rules sets a high standard, requiring that the urgency
143. Despite this apparently strict standard of in question “cannot await the constitution of an arbitral
admissibility, an analysis of the 80 ICC EA proceedings tribunal”. The majority of EAs considered urgency on
shows that, in practice, EAs have examined the this basis. But in at least 12 cases, the EA took into
requirement of urgency (a), as well as additional criteria account other urgency factors, including whether
often defined through international practice relating to the applicant contributed to the urgency, whether
interim measures ordered by arbitral tribunals (b). there are compelling reasons that ground the urgency
of the measure requested, or whether applicant
a) Urgency demonstrated the relief requested is urgently required
to avoid imminent irreparable harm. For example, one
144. Article 29 of the ICC Rules affords emergency EA referred to the test as the “urgent risk of irreparable
relief to a party that “needs urgent interim or harm” test. Applying such a standard, the EA also
conservatory measures that cannot await the examined whether potential damages that would occur
constitution of an arbitral tribunal”. 85 The language absent the emergency measures could instead be
of Article 29 and Article 1, Appendix V of the ICC compensated by monetary means. If so, the urgency
Rules emphasises the importance of urgency to a requirement was deemed unlikely to be fulfilled.
successful Application.
149. Other factors may also be relevant to considering
145. ICC EAs have referred to the urgency urgency. Thus, for example, referring to two ICC cases
requirement in most of the decisions rendered to in which interim measures (as opposed to emergency
date. However, the interpretation and scope of said measures) had been rejected by the arbitral tribunals
requirement is far from uniform. because the remedy sought “alter[ed] the agreement
of [the] parties or their contractual obligations”,90
146. First, there are divergent views regarding an EA found that urgency cannot be premised on
the characterisation of urgency as an admissibility facts or circumstances known to the parties at the
condition or as a substantive requirement, or both. 86 time of the conclusion of the contract, overriding the
In one instance, an EA limited the meaning of urgency, parties’ previously negotiated arrangements. In these
as a threshold question, to the fulfilment of the circumstances, the EA considered that the parties
requirement that the emergency relief “cannot await were on notice of their respective needs and already
the constitution of an arbitral tribunal”. 87 In the same had the opportunity to negotiate the protections they
vein, an EA held that, as a question of admissibility, deemed necessary.
“following the President’s initial review, the EA needs
to analyse, under Article 29(1) whether the situation 150. Urgency is not exclusive to ICC EA proceedings.
presented and allegedly requiring emergency relief Indeed, lack of urgency is the most common basis
“cannot await the constitution of an arbitral tribunal”. 88 for denial of an emergency measure under the SCC
Yet in another case, the EA specifically held that the Rules: between 2010 and 2013, five out of seven EA
“cannot await the constitution of an arbitral tribunal” cases were denied because of lack of urgency.91 As
requirement is not used for admissibility or jurisdiction of 31 December 2014, the most common ground for
purposes, but rather is to be considered as a necessary rejection of interim measures has remained urgency.92
part of the standard to be used on the merits. However,
the Task Force cautions that this latter approach seems
inconsistent with Article 29(1).
147. Many of the Task Force members advocated

reconciling these approaches to assess urgency at
two different stages. As a question of admissibility, a
89 See supra para. 87 of the Report; see also ICC EA Cases Nos. 23
party seeking emergency relief should establish prima and 32.
facie that the request cannot await the constitution of 90 A. Yesilirmak, supra note 83, p. 11. See also ICC Case No. 10648,
the arbitral tribunal. Then, as an issue of the merits of Partial Award, 2001; ICC Case No. 12361, Interim Award, 2003.
the EA Application, the party applying for emergency 91 Arbitration Institute of the Stockholm Chamber of Commerce,
J. Lundstedt, “SCC Practice Note: Emergency Arbitrator Decisions
relief should provide a more comprehensive analysis
2010-2013” (“SCC Practice Note 2010-2013”), https://sccinstitute.
com/media/29995/scc-practice-2010-2013-emergency-
arbitrator_final.pdf, Case 1, p.4; A. Havedal, “SCC Practice Note:
Emergency Arbitrator 2015-2016” (“SCC Practice Note 2015-
2016”), https://sccinstitute.com/media/194250/ea-practice-note-
85 Ibid. emergency-arbitrator-decisions-rendered-2015-2016.pdf.
86 See supra Section III.B(2)(c) discussing the urgency requirement in 92 Arbitration Institute of the Stockholm Chamber of Commerce,
the context of the threshold admissibility issue. L. Knapp, “SCC Practice: Emergency Arbitrator Decisions 2014”,
87 ICC EA Case No. 11. https://sccinstitute.com/media/62020/scc-practice-emergency-
88 ICC EA Case No. 16. arbitrators-2014_final.pdf.

25
Similarly, EA decisions under the rules of the ICDR, In a further case, the EA stated that the “lack of fumus
LCIA, SIAC and others all emphasise urgency as a key, bonis iuris is sufficient to reason dismissal of the
indeed often determinative, criterion.93 measure requested”.100
b) Other factors drawn from interim measures practice 155. This approach is consistent with practice under
other EA rules. In ICDR practice, the “good prospects
151. The Task Force notes that, in addition to of success on the merits” requirement has routinely
urgency, EAs routinely also consider the substantive been considered as one of the conditions necessary
criteria applicable in deciding applications for interim for emergency relief.101 Similarly, a survey of SCC EA
measures outside of the EA context. These criteria practice shows that the “chance of success on the
include the likelihood of success on the merits (fumus merits” is one of the set of factors that have become
boni iuris) (i), the risk of serious harm (periculum in commonly accepted as prerequisites for granting
mora) (ii), the risk of aggravation of the dispute (iii), emergency relief.102 In this respect, some EAs in SCC
the absence of prejudgment on the merits (iv), and proceedings were satisfied if a claimant presented
proportionality/balance of equities (v). As discussed a prima facie case on the merits, i.e. a mere showing
below, EAs tend not to apply these elements that the elements of a claim are present. Most EAs
cumulatively or as a laundry list. Rather, EAs assess operating under the SCC Rules, however, set a higher
which elements are relevant in light of the particular threshold requiring applicants to demonstrate a
circumstances of the case.94 “reasonable possibility” of success on the merits.103
In one EA proceeding, the EA denied the request for
(i) Likelihood of success on the merits (fumus emergency measures because the claimant had failed
boni iuris) to prove a prima facie reasonable chance of success on
the merits.104
152. In the context of interim measures applications
before arbitral tribunals, the condition of likelihood of 156. The Task Force received feedback suggesting
success on the merits (fumus boni iuris) requires the that, where the EA denies relief at least in part based
party requesting interim relief to show a reasonably on consideration of likelihood of success on the merits,
arguable case or a reasonable probability of prevailing the EA might consider issuing his or her Order on a
on the merits.95 This requirement ensures that a party without prejudice basis. The commentator suggested
will not be granted interim relief if there appears to be that such approach would clarify that the EA’s decision
little prospect that it will prevail in the final award.96 is preliminary and provide prospective applicants with
Typically, however, the tribunal’s inquiry into the some comfort about the negative impression of an
merits of the parties’ claims and defenses is only on unsuccessful Application on the tribunal deciding on
a prima facie basis, without any detailed or definitive the merits.
assessment of the evidence or the merits of the parties’
legal arguments.97 (ii) Risk of irreparable harm (periculum in mora)
153. In the first ICC 80 EA Applications, at least 157. The requirement of periculum in mora, or “danger
31 EAs also considered the likelihood of success on the of delay” is a key element in seeking interim measures
merits. Indeed, after urgency, and along with the risk before arbitral tribunals. In short, it requires that relief
of irreparable harm, it is the most commonly applied may be granted only if the applicant demonstrates
criterion in ICC EA practice. that it may suffer “irreparable” damage or injury in
the absence of such relief.105 There is some debate,
154. In 25 of the 31 ICC EA cases in which likelihood of and a general lack of consensus, over the level of
success on the merits was considered, the EA required harm necessary to satisfy this requirement. In many
the applicant to establish a prima facie case. One EA jurisdictions the term “irreparable harm” typically
mentioned that the request is justified on the merits “if refers to an injury that cannot be compensated by
there is, on a prima facie basis, a reasonable possibility way of a damages award.106 However, in international
that the requesting party will succeed on the merits of arbitration practice, the periculum in mora requirement
the claim”.98 In another case, the EA showed concern has often been interpreted to require a showing of
about prejudging the merits stating “some issues at serious or grave harm, even if compensable by money.
stake depend on a deeper debate, not admissible in As one EA observed, “the more common view is that
an urgent measure proceeding” and that “this leads the international standard requires a lesser showing,
to the conclusion of absence of fumus bonis iuris”.99 being a likelihood of serious harm that might not be
100 ICC EA Case No. 14.

93 G. Born, supra note 58, p. 2452. 101 G. Lemenez, P. Quigley, “The ICDR’s Emergency Arbitrator
94 For example, one EA specified that “it is impossible to establish in Procedure in Action, Part I: A Look at the Empirical Data”, Dispute
advance an unalterable list of required conditions as some will be Resolution Journal (2008), p.5; M. Gusy, J. Hosking, F. Schwarz,
applicable and others not applicable, depending on the facts of A Commentary to the ICDR International Arbitration Rules (Oxford
each case” (ICC EA Case No. 10). University Press, 2nd ed. 2019) Ch. 6.
95 G. Born, supra note 58, pp. 2424-2563. 102 SCC Practice Note 2015-2016, supra note 91.
96 Ibid. 103 Ibid.
97 Ibid. 104 Ibid.
98 ICC EA Case No. 11. 105 G. Born, supra note 58, pp. 2424-2563.
99 ICC EA Case No. 5. 106 M. Goldstein, supra note 83, pp. 780-797.

capable of being remedied, fully or at all, in a final has also shown irreparable or substantial harm as a
award”. This less stringent reading of the requirement criterion consistently applied by EAs.111 Looking at the
is more appropriate to the fundamental purpose of data available from the applications filed with the SCC,
arbitral provisional relief, which is to preserve the rights “irreparable harm” is part of the commonly-accepted
of the parties until the final award is rendered,107 while factors for granting emergency relief. In addition,
the EA’s objective is rather to preserve those rights the “urgency” and “irreparable harm” requirements
until the arbitral tribunal is in place and capable of are frequently discussed together.112 Indeed, some
adjudicating on provisional relief. EAs in SCC proceedings do not even consider
urgency to be a separate factor, but rather inherent
158. An analysis of the first 80 ICC EA cases reveals to the requirement that the measures requested are
that the EA considered irreparable harm in half of necessary to avoid irreparable harm. Subsequently, in
the cases. It should be noted that it was not clear measuring urgency or risk of irreparable harm, most
from all Orders which level of harm was deemed to EAs in SCC proceedings analysed whether the harm
be “irreparable”. In at least 21 of those 40 cases, the may be compensable by an award of damages and, if
EA considered that “irreparable harm” should not be so, found that the request for emergency relief should
interpreted in a literal sense, but should instead refer be denied.113
to serious and substantial harm. For example, one EA
decided that “while international arbitration practice (iii) Risk of aggravation of the dispute
normally requires there to be a risk of irreparable harm,
the applicant was entitled to relief despite the absence 160. The principle of non-aggravation of a dispute
of such a risk, as the dispute would otherwise have “seeks to preserve the respective rights of the parties
worsened and granting the request would not cause to a dispute until a final decision has been rendered”.114
irreparable harm to the responding party”.108 Similarly, “Risk of aggravation of the dispute” means that
another EA sought guidance in Article 17(A) of the the EA must consider whether the grant or refusal
UNCITRAL Model Law of 2006109 to hold that the of emergency relief would aggravate the dispute.
risk of irreparable harm requirement does not require It is intended to protect the parties from suffering
demonstrating that the harm suffered in the absence any further damages. This element must not be
of protection cannot be compensated through an confused with the “preservation of the status quo”,
award on damages. Rather, the harm should be serious which is another type of interim measure that can be
and imminent, tipping the balance in favour of the requested.115 The “risk of aggravation of the dispute”
requesting party. element is rarely discussed in academic articles and
publications on EA proceedings. However, some EAs
159. Other arbitration rules, such as those of the have acknowledged the “risk of aggravation of the
Australian Centre for International Commercial dispute” as a factor to consider when exercising their
Arbitration (ACICA), expressly cite the risk of discretion to grant emergency relief.
irreparable harm as a precondition for EA relief.110
An overview of the EA proceedings from the SCAI 161. An analysis of the first 80 ICC EA cases shows
that EAs mentioned this factor for granting emergency
relief in 12 cases. In one case, the EA decided that the
applicant was entitled to relief despite the absence
of the risk of irreparable harm, as the dispute would
107 Ibid.
otherwise have worsened and granting the request
108 See A. Carlevaris and J. Feris, supra note 22. Similarly one EA
considered that “irreparable harm” must be understood in an would not cause irreparable harm to the responding
economic and not literal sense and that the damages only need to party.116 It is the only ICC case known to the Task Force
be substantial: “Standard is not so high as to require harm that in which the risk of aggravation in itself sufficed to
cannot be compensated by money but rather the that the harm will
grant emergency relief. In the other cases, this element
alter the status quo significantly and compound the damages”
(ICC EA Case No. 3). In more recent cases, an EA considered that has been assessed in conjunction with others. In some
“to obtain interim measures, it is not necessary to establish that of the cases, the “preservation of the status quo” was
there is a risk of irreparable harm, i.e. of a harm that cannot mentioned in the applied criteria. However, it is not
adequately be compensated by an award of damages. A risk of
used as a substitute to the term “no aggravation of
serious or substantial harm may be sufficient, depending on the
circumstances” (ICC EA Case No. 33), whereas other EAs the dispute” but as a supplement. The EA considered
considered themselves empowered to grant relief in an interim that there is a “need to avoid aggravation and preserve
stage to avoid harm which would be caused if the relief had not status quo” (emphasis added).
been granted at an interim stage and the determination would be
made by the arbitral tribunal, without referring to a specific
standard of harm.
109 Article 17(A)(1) of the of the UNCITRAL Model Law 2006: “(1) The
party requesting an interim measure under article 17(2)(a), (b) and
(c) shall satisfy the arbitral tribunal that: (a) Harm not adequately
reparable by an award of damages is likely to result if the measure is 111 SCAI, “Emergency Relief under the Swiss Rules: An overview after
not ordered, and such harm substantially outweighs the harm that 4 years of practice” (2017), https://www.swissarbitration.org/
is likely to result to the party against whom the measure is directed files/620/untitled%20folder/Emergency%20Proceedings%20
if the measure is granted; and (b) There is a reasonable possibility under%20the%20Swiss%20Rules%20(2017).pdf.
that the requesting party will succeed on the merits of the claim. 112 SCC Practice Note 2015-2016, supra note 91.
The determination on this possibility shall not affect the discretion 113 Ibid.
of the arbitral tribunal in making any subsequent determination. 114 D. Rivkin, “Re-Evaluating Provisional Measures through the Lens of
[…]” See also Article 26(3)-(4) of the UNCITRAL Arbitration Rules Efficiency and Justice”, International Arbitration Under Review:
2010 and Article 23.4 of the HKIAC Rules (2013), which set forth Essays in Honour of John Beechey (ICC, 2015), p.4.
similar requirements for obtaining an interim relief. 115 See A. Carlevaris and J. Feris, supra note 22, p. 34.
110 ACICA Arbitration Rules 2016. 116 Ibid, p. 25.

27
162. Consideration of this factor is also borne out “no prejudgment” condition.122 In one such case, the
to some extent in EA applications under other rules. EA found that the claimants’ requested delivery of
In EA practice under the LCIA Rules, for example, certain products under a distribution agreement
the risk of aggravation of the dispute is considered were not interim measures, but instead constituted
as a component of the urgency requirement.117 The a judgment on the merits. The EA stated that said
EA evaluates the risk of aggravation of the dispute, deliveries would make a later judgment wholly or partly
along with the risk of serious and irreparable harm and superfluous.123 In the second case, the EA held that
the risk of compromised procedural integrity of the “[i]t is not the function of an emergency arbitrator
arbitration, in order to decide whether the urgency … to decide the merits of the parties’ respective
requirement is met. In the 30 Applications filed with cases, particularly where such cases are, necessarily,
the SCC from 2010 to 2016, this requirement has materially incomplete and turn on complicated and
only been mentioned twice.118 In those cases, the EA potentially difficult issues of law”.124 In ICDR arbitration,
considered whether granting the interim relief would the application of the “no prejudgment on the merits”
aggravate the dispute. condition was only found in a one case where the
EA denied a declaratory judgment request stating
(iv) No prejudgment on the merits that “the purpose of the emergency relief was not to
anticipate the decision on the merits, but to preserve
163. When deciding applications for emergency relief, the status quo”.125
the EA should avoid prejudging or predetermining the
dispute itself.119 As discussed earlier, this does not mean (v) Balance of equities (proportionality)
that an EA may not consider the likely prospects of a
claim.120 It does however mean that, in doing so, the EA 166. Finally, EAs have also balanced the interests of
must not “decide” on the merits of the case, and must the parties, i.e. weighing any harm caused by granting
not overstep the arbitral tribunal’s role of assessing the measure against the likely harm to the applicant if
the merits in light of the parties’ submissions in the said relief is not granted. Tribunals frequently consider
arbitration.121 the balance of the interests in addressing requests for
interim measures. This may include consideration of
164. The analysis of the first 80 ICC EA cases the relative financial positions of the parties to ensure
demonstrates that EAs referred to the “no that no substantial disadvantage occurs as a result of
prejudgment on merits” criterion in a total of 19 the interim measure.126 The “balance of equities” is a
cases. In all but one case, the criterion was applied common law principle often applied when granting
cumulatively. In a single case, the request was denied provisional relief.127 It may be assessed also within the
in order to avoid prejudging on the merits; the EA related concepts of balance of hardships, balance of
stated that “[h]owever wide may be the latitude inconvenience, or proportionality.128
that I enjoy to take pragmatic and necessary action,
any such action must necessarily be of an interim or 167. Contrary to the “risk of aggravation to the
conservatory nature, which among other things means dispute” or “no prejudgment on the merits”, the
that it must be capable of reassessment if appropriate “balance of equities” or proportionality element is
in the course of arbitral proceedings to resolve the expressly stated in a few EA Provisions. The ACICA
parties’ dispute”. In other words, an EA will not grant Rules provides that parties requesting an emergency
an emergency measure if said relief is the same as the interim measure must show, among other things that
one requested on the merits. “such harm substantially outweighs the harm that is
likely to result to the party affected by the Emergency
165. Similarly, EA cases statistics from the SCC Interim Measure if it is granted”.129 Further, pursuant
show that, among the EA applications determined to the UNCITRAL Model Law (Article 17(A), para. 1(a)),
between 2014 and 2016, only two EAs cited the
122 SCC Practice Note 2010-2013, supra note 91.

123 Ibid. Case 3.
117 R. Gerbay, L. Richman, M. Scherer, “Chapter 10: Expedited 124 Ibid. Case 7.
Formation of the Arbitral Tribunal, Emergency Arbitrators and 125 G. Lemenez, P. Quigley, “The ICDR’s Emergency Arbitrator
Expedited Replacement of Arbitrators”, Arbitrating under the 2014 Procedure in Action, Part I: A Look at the Empirical Data”, Dispute
LCIA Rules: A User’s Guide (Kluwer, 2015), pp. 133-166. “Even Resolution Journal (2008), p.5; M. Gusy, J. Hosking, F. Schwarz,
though there is no universal consensus on the definition of A Commentary to the ICDR International Arbitration Rules, supra
‘urgency’, arbitral decisions have held that this requirement is met if note 27.
there is a risk of (i) serious and irreparable harm to one of the 126 Chartered Institute of Arbitrators’ International Arbitration Practice
parties; (ii) aggravation of the dispute during the proceedings; or Guideline, Applications for Interim Measures (2015).
(iii) compromised procedural integrity of the arbitration”. 127 See, e.g. Winter v. Nat. Res. Def. Council, Inc., 129 S. Ct. 365, 374
118 SCC Practice Note 2010-2013, Case 1; SCC Practice Note 2015-2016, (2008); Teradyne, Inc. v. Mostek Corp., 797 F.2d 43, 51 (1st Cir. 1986);
Case 3.9, supra note 91. Roso-Lino Beverage Dist., Inc. v. Coca-Cola Bottling Co., 749 F.2d
119 Chartered Institute of Arbitrators’ International Arbitration Practice 124 (2d Cir. 1984); Sauer-Getriebe KG v. White Hydraulics, Inc., 715
Guideline, Applications for Interim Measures (2015). Indeed, F.2d 348 (7th Cir. 1983); Zoll Circulation, Inc. v. Elan Medizintechnik,
Articles 29(3) and 29(4) recognise that the arbitral tribunal is the GmbH, 2010 WL 2991390 (C.D. Cal. July 26, 2010) (granting
ultimate decision-making authority and that the EA’s Order shall injunctive relief pending arbitration but only as to claims for which
not bind the arbitral tribunal. See also Secretariat’s Guide to ICC plaintiff demonstrated balance of equities that favored plaintiff).
Arbitration, op. cit. note 17, p. 305, § 3-1088. 128 Winter, supra note 127, at 376-77 (noting that the court must
120 See supra Section III.D(3) “(i) Likelihood of success on the merits consider the competing claims of injury and effect on each party of
(fumus boni iuris)”. granting or withholding the relief requested).
121 G. Born, supra note 58, pp. 2424-2563. 129 ACICA Arbitration Rules 2016, Schedule 1, Art. 3.5(b).

one of the conditions for granting an interim measure of the parties133 and to take into account the practical
is that “[h]arm not adequately reparable by an award effects of granting a measure that is, by definition,
of damages is likely to result if the measure is not provisional.134 Through the provision of security, the EA
ordered, and such harm substantially outweighs the ensures that the adverse party will be able to recover
harm that is likely to result to the party against whom damages if the provisional measure proves to have
the measure is directed if the measure is granted”. been wrongfully ordered.
168. The analysis of the first 80 ICC EA cases shows 172. Article 28 of the ICC Rules, as well as many
that EAs referred to the “balance of equities” factor national laws, also specifically provide for the
for deciding whether to grant emergency relief in at possibility that a tribunal may order security to
least 16 decisions. In one case, the EA described the be posted as a condition of any provisional relief
notion of balance of equities as “the likelihood that granted.135
applicant will receive compensation for the potential
damage suffered as a result of the requested measures 173. Despite this express authorisation, among the
not being granted is greater than the likelihood that first 80 ICC EA Applications, not one case in which the
the respondent will receive said compensation in the EA granted relief included the provision of security as
opposite case”. In another case, the EA considered a condition.
“whether the threatened injury outweighs any harm
that would result from the grant of the relief sought, 174. In at least nine cases, the requested measure
whether grant of the relief sought would disserve involved security or some form of cross-undertakings.
the public interest, and whether the applicant can In the majority of these cases, the EAs expressly
compensate the other party in damages if the relief declined provision of security. In two cases, a form of
turns out to have been wrongly granted.” security was granted in the sense that, as requested,
the payment of amounts in escrow was ordered. In one
169. Looking at the data available from the SCC, case, the EA presented the possibility of requiring the
the “proportionality” condition has been commonly posting of security as a means to offset the emergency
accepted as a prerequisite for granting emergency measure’s risk of altering the status quo, by ensuring
relief.130 Where all other factors are met (jurisdiction, that the eventual harm caused by the measure could
chance of success on the merits, and urgency), the be compensated. As the EA explained, the posting of
EA will consider the proportionality of the requested security would typically be required for measures that
measure by weighing the harm avoided against modify the status quo between the parties, such as
the potential harm inflicted upon the respondent. orders to transfer possession or to demolish, and not in
If granting the relief would cause significant harm cases of orders to “not change course”. More generally,
to the respondent, the EA is unlikely to grant the the EA appeared to suggest that the commonly
applicant’s request.131 An EA in SCC proceedings applied interim measures requirements can be
noted that proportionality “is commonly assessed as disregarded if they prove inadequate for the specific
a balance of hardships” and “if the negative impact measure at hand. In that particular case, the EA
of the requested relief is disproportionate to its decided that those requirements did not necessarily
benefit, then either the request must be declined or apply to the measure that was requested to merely
the relief redesigned to reduce the burden on the preserve the status quo.
subject party”.132
175. In at least three cases, the EA considered that
a provision of security would not be justified absent
4) Other considerations for granting
an allegation of misconduct. While neither the EA
emergency relief
Provisions (Appendix V, Article 6(7)) nor Article 28
170. In addition to the substantive considerations applicable to arbitral tribunals specify the conditions
outlined above, EAs have also taken into account the
provision of security from the requesting party (a) and
whether the relief requested is appropriate (b).
a) Provision of security as a condition to the

relief granted 133 See supra Section III.D(3) “(v) Balance of equities (proportionality)”,
134 See supra Section III.D(3) “(iv) No prejudgment on the merits”.
135 See Article 28(1). See also Secretariat’s Guide to ICC Arbitration, op.
171. The ICC Rules expressly provide that EAs
cit. note 17, p. 292, § 3-1042; G. Born, supra note 58, p. 2508; J. Lew,
can subject their Orders to the posting of security. L. Mistelis, S. Kröll, Comparative International Commercial
Appendix V, Article 6(7) provides that “[t]he Arbitration (Kluwer, 2003) p. 608. See also Article 17(E) of the of
emergency arbitrator may make the Order subject to the UNCITRAL Model Law 2006: “(1) The arbitral tribunal may
require any party to provide appropriate security in connection
such conditions as the emergency arbitrator thinks
with the measure. (2) The arbitral tribunal shall require the party
fit, including requiring the provision of appropriate applying for a preliminary order to provide security in connection
security”. Conditioning emergency relief on the posting with the order unless the arbitral tribunal considers it inappropriate
of security can allow the EA to balance the interests or unnecessary to do so”; Article 26(6) of the UNCITRAL
Arbitration Rules 2010; Art. 25(2), LCIA Rules 2014. In some cases,
national laws may hinder the enforcement of an interim measure in
case of non-compliance with the required provision of security, see
Section 30 (1) (ii) of the Lagos State Arbitration Law; Article 89.1 (v)
130 SCC Practice Note 2015-2016, supra note 91. of the Colombian Arbitration Statute; see also the jurisprudence of
131 Ibid. the Vilnius country court on the basis of Article 23 of the Law on
132 Ibid. case 3.3. Commercial Arbitration of Lithuania.

29
under which payment of security can be required, first 80 ICC EA cases have applied this distinction.
similar caution can be found in case law regarding Whenever faced with an EA Application, EAs have only
requests of security for costs before arbitra tribunals.136 assessed whether the requested measure constitutes
preliminary relief.
176. The practice of EA proceedings under other rules
also shows a similar reluctance to require provision 179. EAs in ICC proceedings have decided the
of security in the context of emergency measures. following types of requests for emergency relief:
Under the SCC Rules, there is no information regarding
any instance, in which EAs considered, accepted or • anti-suit / anti-arbitration injunctions;
denied requiring the posting of security since 2010.137 • application of delay penalties (astreintes);
The SCAI has handled at least one case in which the
• measures aiming to maintain the status quo and
respondent requested security.138 The EA denied the
preservation of assets or property;
request after determining that the respondent had not
demonstrated that damages would be incurred as a • measures restraining the sale of certain products
result of the interim relief.139 Similarly, the Arbitration allegedly in breach of contractual obligations;
Center of Mexico handled one case in which the • measures demanding performance of contractual
claimant requested security and the EA granted the obligations;
request.140 Interestingly, even under the ICDR EA • measures demanding the reinstatement of
provisions, there is no instance in which an EA has individuals in a company, the removal of individuals
ordered the provision of security. from board positions or employment, the
organisation of shareholders meetings, the passing
b) Nature of the emergency relief sought of board resolutions and participation in board
meetings;
177. Whether viewed as an admissibility issue or
• measures enjoining the enforcement of bank
as a matter arising in assessing the merits of the EA
guarantees, and a declaratory order of the
Application, EAs have frequently had to consider
abusiveness of a potential enforcement of such
the nature of the emergency measures sought and
guarantees;
whether such relief is appropriate.
• measures ordering security, as well as prohibiting
178. Under the ICC Rules, EAs have the power to the opposing party from drawing down on the
order measures of an “interim or conservatory nature”. performance bond; and
The Rules do not define interim or conservatory • measures impacting third parties.
measures.141 Interim (or provisional) relief has generally
been defined as “decisions that are made prior to a 180. An analysis of the first 80 ICC EA cases
final award, where the relief granted is usually, but shows that while several EAs have considered the
not necessarily, designed to protect a party during appropriateness of the specific measures sought, this
the pendency of the proceedings, and which are is not always constrained by a technical analysis of
potentially subject to alteration or elimination in the whether such measures sought are permitted by any
final award”, while conservatory (or protective) relief applicable law. EAs specifically address the question
refers to “relief that is designed to protect or conserve of the nature and type of the relief sought in some
particular rights, regardless of whether it is granted 25 cases. There is no clear visible trend on the norms
in an interim or a final award”.142 However, none of the applied in this respect. EAs have referred to availability
of the relief as determined by the lex arbitri, and have
sought guidance in international practice. Others have
simply assessed whether the requested measures
136 N. Blackaby, J. Hunter, C. Partasides, A. Redfern, Redfern and were “fit”, “appropriate”, or “possible”. In at least one
Hunter on International Commercial Arbitration (2015), p. 316: case, the EA equated its powers to order emergency
“Tribunals have been cautious about granting security in such a
relief to that of arbitral tribunals in general. In short,
situation: in Commerce Group v El Salvador, for example, the
annulment committee noted that ‘the power to order security for the decisions show a wide degree of discretion
costs should be exercised only in extreme circumstances, for and flexibility.
example, where abuse or serious misconduct has been evidenced’”.
137 See SCC Practice Notes supra notes 91 and 92; see also A. Havedal, 181. ICC EAs have not had the opportunity to
“Urgency, Irreparable Harm and Proportionality: Seven Years of
address whether declaratory relief is available in
SCC Emergency Proceedings”, Kluwer Arbitration Blog (29 Jan.
2017). EA proceedings. Although an EA was faced with
138 The Swiss Rules of International Arbitration allow EAs to order the such a request, the Application was denied on other
provision of appropriate security through reference to Article 26; grounds. In the context of the SCC Rules, an EA
see Article 43(1) Swiss Rules of International Arbitration.
granted a request for declaratory relief.143 Conversely,
139 SCAI, Case No. 4 (unpublished).
140 The Rules of Arbitration of the Arbitration Center of Mexico (CAM)
an EA operating under the ICDR Rules rejected an
allows the EA to order a party to post security: see Art. 30 Bis, application for declaratory relief because “the purpose
Sec. 6: “The urgent measure may grant under the condition that the of emergency relief [is] not to anticipate the decision
requesting party provides the security fixed by the urgent
arbitrator.”
141 Secretariat’s Guide to ICC Arbitration, op. cit. note 17, p. 289,
§ 3-1036.
142 G. Born, supra note 58, p. 2427. See also Secretariat’s Guide to ICC for costs; (iv) secure the enforcement of the award; or (v) order
Arbitration, op. cit. note 17, p. 289, §3-1036 (noting that common interim payment).
types of interim and conservatory relief include measures that (i) 143 SCC Emergency Arbitration (087/2012), in SCC Practice Note
protect the status quo; (ii) preserve evidence; (iii) provide security 2010-2013, supra note 91.

on the merits, but to preserve the status quo”.144 In 186. Even where there is yet to be explicit
the Task Force, there was no commonly accepted confirmation from local courts, most reports from
view as to whether or not declaratory relief could countries that have incorporated the UNCITRAL Model
be available in EA proceedings. Some members Law (and in particular its provisions on enforceability
argued that such relief cannot by definition qualify as of interim measures), tend to favour the enforceability
interim or conservatory in nature, while others have of EA decisions considering that full effect should
countered that the wide discretion of the EA could be given to the provisions of the arbitration rules
in certain circumstances warrant the issuance of as the expression of the parties’ intent and that it
declaratory relief. is reasonable to assume that the EA has the same
powers as an arbitrator.146
IV. POST-EMERGENCY ARBITRATION 187. In those countries where the UNCITRAL Model
CONSIDERATIONS Law has only inspired the local arbitration law, then
the position as to enforceability of EA decisions
varies widely, even when the arbitration law expressly
A. Enforcement
authorises arbitral tribunals to grant interim measures.
In countries such as Belgium, Colombia, Portugal,
182. As EA proceedings have become more prevalent,
Brazil, Nigeria, Poland, Spain, Ukraine, Turkey and
concerns about the enforceability of EA decisions have
Venezuela, National Committees tend to consider that
given rise to numerous debates.
arbitral tribunals’ power to grant interim measures are
183. Enforceability concerns have principally arisen consequently extended to EAs, while countries such
from the status of the EA (i.e. whether arbitrator as India,147 Macedonia, Malaysia, Serbia and Thailand,
or simple adjudicator), the interim nature of the EA are reported to have a restrictive interpretation of
decision, and the specific form of the EA decision. EAs’ powers.
The Report considers these hurdles to enforceability
188. Further, in countries where statutory provisions
successively keeping in mind that they should not be
allow arbitral tribunals to grant interim measures,
overstated as most parties seem to comply voluntarily
national laws and practice often draw distinctions
with EA decisions.
between domestic-seated and foreign-seated
arbitration. In certain countries, enforcement is
1) The status of the EA under national laws
easier in domestic-seated arbitration, while in
184. Other than those of Hong Kong, New Zealand others enforcement is made easier in foreign-seated
and Singapore, none of the national laws surveyed arbitration where the law of the parties is given
contains any provision expressly referring to the EA prevalence. For example, in Colombia, EA decisions
or the EA proceedings.145 Most national laws seem to are not enforceable in domestic arbitration while they
strictly apply to arbitral tribunals only and not to an EA. should be enforceable (due to greater deference to
Given the relatively recent nature of EA proceedings, party autonomy) in foreign-seated arbitration. Similarly,
there is, at present, only limited case law addressing in India, enforcement of EA decisions is uncertain in
whether the EA is empowered to act under the domestic arbitration. The Indian Act does not contain
national arbitration laws and whether national courts any provision with regard to EAs or emergency
are empowered to enforce any decisions rendered awards. However, with respect to emergency awards in
by an EA. domestic-seated international arbitrations, where the
relevant institution rules provide for EA proceedings, it
185. From the analysis of 45 National Reports, a wide is likely that courts would treat the emergency award
range of interpretations emerge, from expressing in the same manner as a regular award, depending on
an unequivocal view that the EA is an arbitrator and the status ascribed to it under the said rules. In foreign-
that provisions applicable to the arbitral tribunal seated arbitrations, while courts have, on the one hand,
should apply to EAs, to others that consider that EA held that emergency awards cannot be enforced under
proceedings cannot be equated to proceedings before the Arbitration and Conciliation Act (1996) and that the
an arbitral tribunal. only method of enforcing the same would be by filing a
suit, courts have, on the other hand, indirectly enforced
146 For example, 1985 UNCITRAL Model Law countries: Austria,

Canada, Cyprus, Greece and Mexico; 2006 UNCITRAL Model Law
countries: Ireland and New Zealand (now provided for in
144 G. Lemenez, P. Quigley, “The ICDR’s Emergency Arbitrator legislation). Australia and Russia seem to consider to the contrary
Procedure in Action – Part I: A Look at the Empirical Data”, Dispute that an EA shall not be equated with an arbitral tribunal. This
Resolution Journal, August/October 2008, p. 5; M. Gusy, tendency is based on the opinion expressed by the National
J. Hosking, F. Schwarz, A Commentary to the ICDR International Committees and should be confirmed on a case-by-case basis. At
Arbitration Rules, supra note 27. the time this Report was drafted there was no case law to confirm
145 For example, national laws of these countries do not expressly refer the National Committees’ reading of their national law.
to EAs: Australia, Austria, Belgium, Brazil, Canada, Chile, China, 147 The 246th Law Commission of India Report 2014 had suggested
Colombia, Croatia, Cyprus, Finland, France, Germany, Greece, widening the definition of ‘arbitral tribunal’ under Section 2 (d) of
India, Ireland, Italy, Lebanon, Lithuania, Macedonia, Malaysia, the Arbitration Act, 1996 to include “emergency arbitrator”.
Mexico, Nigeria, Pakistan, Panama, Peru, Poland, Portugal, Qatar, However, this definition was not included in the Arbitration
Russia, Serbia, Spain, Thailand, Turkey, UAE, Ukraine, United (Amendment) Act, 2015. Therefore, the concept of “emergency
Kingdom, US and Venezuela. arbitrator” is not yet recognised under Indian law.

WEEK 7: CONFIDENTIALITY & PARTICIPATION BY AMICUS
February 28, 2023
Relevant Rules
ICC: Article 22(3); Appendix I, Article 6; Appendix II, Article 3
1.
ICDR: Articles 20(4), 34
2.
UNCITRAL, Articles 28(3), 34(5)
3.
SIAC, Articles 21.4, 35
4.
ICSID, Arbitration (Additional Facility) Rules, Articles 13, 23, 52-53
5.
LCIA, Articles 19, 30
6.
Required Readings
Michael Hwang & Katie Chung, Defining the Indefinable: Practical Problems of
1. Confidentiality in Arbitration, 26 J. Int’l Arb. 609 (2009); pg. 609-645
2. Ali Shipping Corp. v. Shipyard Trogir (1998)
3. Esso Australia Resources Ltd. v. Plowman (1995)
Piero Foresti, Laura de Carli & Others v. South Africa, Petition for Limited
4.
Participation as Non-Disputing Parties in Terms of Articles 41(3), 27, 39, and 35 of the
Additional Facility Rules. Recommended Excerpt: pg. 8-49
5. Michael Pryles, Confidentiality in THE LEADING ARBITRATORS’ GUIDE TO
INTERNATIONAL ARBITRATION (Newman & Hill eds. 2d ed 2008). Recommended
Excerpt: pg. 443-54
6. UNCITRAL, Rules on Transparency in Investor-State Arbitration, available at:
http://www.uncitral.org/uncitral/uncitral_texts/arbitration/2014Transparency.html
Defining the Indefinable: Practical

Problems of Confidentiality in Arbitration
Michael Hwang (*) ; Katie Chung (**) Author
This article seeks to provide a comprehensive review of the Michael Hwang

international law on confidentiality in arbitration both in terms of Katie Chung
theory and in practice (by examining national legislation and the
rules of the various institutions). The essential point is that the Jurisdiction
problem is not in defining confidentiality but in defining the
exceptions to the duty of confidentiality where such a duty is Source
recognized. The argument is made that, in practice, it is difficult to
Michael Hwang and
come up with a comprehensive formula for, or list of, all the
Katie Chung, Defining
exceptions to the obligation of confidentiality. However, there is an
the Indefinable:
examination of the most comprehensive and recent attempt to codify
Practical Problems of
the exceptions to the duty of confidentiality in the New Zealand
Confidentiality in
Arbitration Act 1996 (2007 Amendment). Nonetheless, even as the
Arbitration, Journal of
New Zealand Arbitration Act 1996 recognizes, no code can be fully
International Arbitration,
comprehensive, and there must be room for an independent third
(Kluwer Law
party (either the tribunal or the curial court) to rule on permitted
International 2009
exceptions to the obligation of confidentiality.
Volume 26 Issue 5 ) pp.
609 - 645
I. Introduction
It is a particular pleasure to deliver the second Kaplan lecture in

Hong Kong in honor of Neil Kaplan, whom I have known for some
fifteen years. No one needs reminding that Neil is internationally
recognized as one of the super-arbitrators of the world. We also
know that, quite apart from his personal career, he has also devoted
much of his time over the years to building up the cause of
international arbitration, both in Hong Kong and the world, by his
judgments in the Hong Kong High Court, his chairmanship of the
Hong Kong International Arbitration Centre (HKIAC), and then later
on the world stage as chair of the Chartered Institute of Arbitrators.
More than any other person, he put Hong Kong on the world map of
arbitration and led the way for Hong Kong to be recognized, not only
for having a fine arbitration institution, but also for having many fine
practitioners in international arbitration. This perception has
established Hong Kong as Asia's leading center for international
arbitration (although Singapore may have something to say about
that in the near future). But Neil has also unselfishly nurtured
neophytes into the world of international arbitration, and I am one of
3
those neophytes whom he mentored and assisted over the years.

He opened many doors for me and helped me with advice and
encouragement to enable me to mutate from a litigator to an
arbitrator, and his example is one that I intend to follow in terms of
putting back what I have got out of this world of international
arbitration.
page "609"
II. The Problems of Defining the Duty
It is not always realized that the definition of the scope of the duty of
confidentiality is a major problem. This is why so few definitions at
the legislative and institutional levels have been attempted, and why
the existing definitions are not completely successful. But
practitioners who do attempt to find a contractual definition quickly
find out how difficult a mutually acceptable solution is to achieve,
which is why, in practice, there are few model clauses available.
In common law countries, attempts have been made to define the

duty through the courts, mainly through the device of the implied
term, but these attempts have run into conceptual difficulties,
although they have provided valuable insights into the nature and
scope of the problem.
III. To Whom Does the Duty Extend?
The first question is: who should know about the arbitration? Once
this is ascertained, then the duty can be imposed on such persons.
It should be uncontroversial that the persons who are entitled to
know about the arbitration (and all its aspects) are the parties, their
counsel, the tribunal and the administering institution (if any).
But problems start immediately we go beyond this inner circle,

starting with the position of witnesses, actual and potential. Are they
entitled to be fully briefed on the facts and documents relating to the
arbitration or only to the extent necessary for them to assist in their
function as witnesses? If the latter, who decides on the boundaries
of the permitted disclosures? And what about persons who are
being considered as witnesses but have not yet agreed to do so?
How far is it permissible to show them confidential documents after
the commencement of the arbitration? These are not questions to
which case law, legislation or institutional rules have given any
answer.
IV. To What Information and Documents Does the Duty Extend?
We start with the issues of:
(a) the existence of the arbitration; and

(b) the decision of the tribunal.
4
Should either of these facts be confidential? In the latter case,

should the contents of the award (as opposed to its outcome) be
confidential as well? Again, existing law and rules do not give a clear
or uniform solution. (1)
page "610"
We then move onto the more difficult question of the documents

which will be used or referred to in the course of the arbitration. And
here we begin to receive some assistance from the courts. Case law
has given some protection for the confidentiality of documents
generated in the course of the arbitration (e.g., pleadings, witness
statements, submissions, transcripts and documents disclosed by
the other party) not otherwise in the public domain. (2) The starting
point for an examination of the Commonwealth position on
confidentiality is the recent decision of the English Court of Appeal in
Emmott v. Michael Wilson & Partners, (3) where the court made the
following pronouncements on the obligations of the parties.
Lawrence Collins, L.J. stipulated:
[a]n implied obligation (arising out of the nature of

arbitration itself) on both parties not to disclose or use
for any other purpose any documents prepared for
and used in the arbitration, or disclosed or produced in
the course of the arbitration, or transcripts or notes of
the evidence in the arbitration or the award, and not to
disclose in any other way what evidence has been
given by any witness in the arbitration, save with the
consent of the other party, or pursuant to an order or
leave of the court. (4)
Likewise, Thomas, L.J.:
[a] specific obligation of confidentiality in relation to

documents produced by each party to the arbitration
under the process of disclosure applicable by the
procedural law of arbitrations conducted in England
and Wales. This is analogous to that imposed by the
courts of England and Wales in proceedings before
them. As between the parties, all such documents are
covered by the obligation of confidentiality. (5)
It is important to note that there are at least three classes of

documents:
(a) documents which are inherently confidential;

(b) documents which are disclosed by parties for purposes of the
arbitration, whether voluntarily or pursuant to tribunal orders for
production; and
(c) the award.
5
Different considerations apply to each of these classes.
In the case of inherently confidential documents (e.g., those

containing proprietary comercial information), they will attract the
same protection within the arbitration as they do outside it, that is,
they will not depend on any doctrine of arbitral confidentiality for that
protection. (6)
In the case of documents disclosed by the parties, they will have the
protection afforded to similar documents in litigation (sometimes
known as “the Riddick principle”), (7) which means that they may not
be disclosed without the permission of the other party or the tribunal.
page "611"
The confidentiality of awards depends on what the applicable

institutional rules provide. Ad hoc arbitrations will depend on the
applicable ad hoc rules (usually United Nations Commission on
International Trade Law (UNCITRAL) Rules in the case of
international arbitrations), (8) and the applicable arbitral law, but this
is rarely likely to have any express provision governing
confidentiality. (9)
V. What is the Juridical Basis of the Duty?
After some differences of judicial opinion in the English courts, (10) a

definitive statement has now emerged from the English Court of
Appeal in Emmott v. Michael Wilson & Partners, (11) which seems to
have settled the juridical basis for the duty. Judicial opinion in other
parts of the world remains divided. Emmott has laid down the
following principles:
(a) The obligation of confidentiality in arbitration is implied by law

and arises out of the nature of arbitration.
(b) This obligation is a substantive rule of law masquerading as an
implied term.
(c) It imposes an obligation on both parties not to disclose or use
for any other purpose any documents prepared for and used in
the arbitration, or disclosed or produced in the course of the
arbitration, or transcripts or notes of the evidence in the
arbitration or the award, and not to disclose in any other way
what evidence has been given by any witness in the arbitration.
(d) The content of the obligation may depend on the context in
which it arises and on the nature of the information or
documents in question; the limits of the obligation are still in the
process of development on a case-by-case basis.
(e) The principal cases in which disclosure will be permissible are
where:
(i) there is consent (express or implied) of the parties;
6
(ii) there is an order or leave of the court;

(iii) it is reasonably necessary for the protection of the
legitimate interests of an arbitrating party; and
(iv) the public interest or the interests of justice require
disclosure.
VI. Difficulties in the Absolute Nature of Confidentiality
Whatever may be the juridical basis of the duty, it is clear that the
duty cannot be an absolute one. Several practical situations
immediately come to mind which call for exceptions to the duty.
page "612"
A. Enforcement actions
Clearly, the winning party in an arbitration must be allowed to

disclose the contents of the award if it has to proceed with
enforcement action to obtain its rights under the award.
In Hassneh Insurance Co. of Israel v. Steuart J. Mew, (12) Colman, J.

considered that the award was subject to a duty of confidentiality,
even though the award identified the parties' respective rights and
obligations, and was at least potentially a public document for the
purposes of supervision by the courts or enforcement in them. (13)
However, Colman, J. held that the implied duty of confidentiality is
subject to the following exceptions: (14)
(a) Disclosure of the award (including its reasons) is permitted

where it is reasonably necessary for the protection of an
arbitrating party's rights vis-à-vis a third party.
(b) An arbitrating party may bring the award and reasons into court
for the purpose of invoking the supervisory jurisdiction of the
court over arbitration awards and for the purpose of
enforcement of the award itself.
This holding is still valid as it is not inconsistent with the

pronouncements of the Court of Appeal in Emmott.
B. Parallel actions
The problem here is where there are different arbitrations between

the same (or different) parties arising from the same or related
disputes. Where the tribunal is the same in different arbitrations
between the same parties, there should be no practical difficulty in
migrating information about the first arbitration into the second
arbitration. Where the tribunal is different, some theoretical and
practical difficulties can be encountered. Although the parties may
be the same, the choice of a different tribunal may be due to the
wish to keep the two arbitrations separate and discrete from each
7
other, precisely to prevent the migration of information which may be

relevant in one arbitration but would be viewed as irrelevant or
prejudicial to the outcome of the second arbitration. And where the
parties are different in two arbitrations, the difficulties could become
even greater.
These difficulties typically arise in construction cases, where there

are likely to be separate arbitrations between employer and main
contractor on the one hand, and between main contractor and
subcontractor on the other. They also frequently arise in reinsurance
cases where there is one arbitration between primary insurer and
the insured, and another arbitration between primary insurer and
reinsurers.
page "613"
The source of the problem is the general lack of power to

consolidate two arbitrations, (15) which is generally viewed as a
deficiency in the arbitral process that is an inevitable consequence
of the principle of the consensual basis of arbitral jurisdiction.
All these difficulties were canvassed in a quartet of English cases.
In Dolling-Baker v. Merrett, (16) the plaintiff representative underwriter

claimed against the first defendant (a representative underwriter for
two Lloyd's syndicates) for sums of money allegedly due under an
aggregate excess of loss reinsurance effected through the second
defendants, the placing brokers for that reinsurance. The first
defendant sought to avoid the reinsurance policy on grounds of non-
disclosure. The plaintiff claimed, in the alternative, against the
second defendant for negligence. There had been an earlier
arbitration involving a similar type of reinsurance in which the first
defendant was representative underwriter and the second
defendants were placing brokers, and where the first defendant also
sought to avoid the reinsurance policies on grounds of non-
disclosure (the “Turner arbitration”). In that arbitration, the arbitrator
had declared that the reinsurance was invalid, and so the first
defendant had succeeded in avoiding liability in the Turner
arbitration. In Dolling-Baker, the plaintiff wanted disclosure of
documents in the Turner arbitration, which included, amongst other
things, transcript evidence and the award itself (the “Turner
documents”). The Turner documents were in the possession,
custody and control of both the first and second defendants. The
plaintiff failed to obtain discovery on the ground that they were not
relevant to the issues in the current action and that even if they
were, the production of the Turner documents for inspection was not
necessary for disposing fairly of the issues. The first defendant also
succeeded in obtaining an injunction against the second defendant
from disclosing those documents used in the Turner arbitration.
Parker, L.J., in the English Court of Appeal, held that there was an
implied obligation of confidentiality arising out of the nature of
arbitration itself. He considered that:
8
As between parties to an arbitration, although the

proceedings are consensual and may thus be
regarded as wholly voluntary, their very nature is such
that there must, in my judgment, be some implied
obligation on both parties not to disclose or use for
any other purpose any documents prepared for and
used in the arbitration, or disclosed or produced in the
course of the arbitration, or transcripts or notes of the
evidence in the arbitration or the award, and indeed
not to disclose in any other way what evidence had
been given by any witness in the arbitration, save with
the consent of the other party, or pursuant to an order
or leave of the court. That qualification is necessary,
just as it is in the case of the implied obligation of
secrecy between banker and customer. (17)
In Hassneh, the plaintiff reinsurers sought an injunction to restrain

disclosures by the defendant reassured of certain documents
engendered in the course of an arbitration page "614" between
the plaintiffs and the defendant. The defendant was reinsured by the
plaintiffs under various reinsurance contracts, and the placing
brokers were C.E. Heath & Co. The defendant had commenced the
arbitration against the plaintiffs claiming to recover under those
reinsurance contracts. The plaintiffs raised various defenses, which
included non-disclosure and misrepresentation. The defendant also
sought to make a claim against their placing brokers in court
(because there was no arbitration agreement between them), in
case the defendant failed against the reinsurers. The defendant,
however, lost its arbitration against the plaintiffs in an interim arbitral
award issued by the tribunal. Hence, the defendant sought to
proceed against the placing brokers, claiming on the basis of
negligence and breach of duty as placing brokers. The defendant
therefore wanted to disclose to the placing brokers the interim award
and the reasons for that award. The plaintiffs were content that the
defendant should disclose the interim award to the placing brokers
and the reasons as referred to in the interim award. However, the
plaintiffs objected to the disclosure of the whole of the reasons or
the disclosure of any other documents (such as pleadings, witness
statements or transcripts), and sought an injunction to restrain such
disclosure on the basis that the disclosure would be a breach of
confidence by the defendant. Colman, J. held that the implied duty
of confidentiality in arbitration applied to documents generated in the
course of the arbitration (e.g., transcripts, pleadings, witness
statements, submissions), and documents disclosed during the
arbitral process. However, as discussed above, the implied duty of
confidentiality was subject to the exception that the disclosure of the
reasoned award was reasonably necessary for the protection of the
arbitrating party's rights vis-à-vis a third party, so that to disclose it
would not be a breach of the duty of confidence. Colman, J. cited
the English Court of Appeal case of Tournier v. National Provincial
and Union Bank of England (18) as the basis for this qualification to
9
the implied duty of confidentiality. In Tournier, Bankes, L.J. set out

the following four qualifications to a bank's duty of confidentiality:
(a) where disclosure is under compulsion of law;

(b) where there is a duty to the public to disclose;
(c) where the interests of the bank require disclosure; and
(d) where the disclosure is made by the express or implied consent
of the customer.
In Hassneh, Colman, J. found that the disclosure of the reasoned

award was reasonably necessary for the defendant to establish his
causes of action against the placing brokers. However, Colman, J.
did not extend the exception to the other documents generated or
disclosed in the course of the arbitration, as they were merely the
materials which were used to give rise to the award which defined
the rights and obligations of the parties to the arbitration.
Accordingly, Colman, J. held that the qualification to the duty of
confidentiality based on the reasonable necessity for the protection
of an arbitrating party's rights against a third party could not be
expected to apply to such documents.
page "615"
In Insurance Co. v. Lloyd's Syndicate, (19) the defendant reassured

commenced arbitration against the plaintiffs as lead underwriters
under a contract of reinsurance. The plaintiffs had contended that
they were entitled to avoid the contract of reinsurance on the
grounds of non-disclosure, or alternatively that the plaintiffs were not
liable under the policy wording to indemnify the defendant against a
particular class of risks. Subsequently, the syndicate of five other
reinsurers all asserted that they were not bound to indemnify the
reassured against such risks. The arbitral tribunal later issued an
interim award in favor of the defendant reassured, which then
sought to disclose the award to the five other reinsurers in order to
persuade them to accept liability. The plaintiffs applied for an
injunction to restrain the defendant reassured from disclosing the
interim award. In granting the injunction, Colman, J. applied the
reasonable necessity test which he had laid out in Hassneh (20) and
found that, although the disclosure of the award and reasons might
have a persuasive effect on the syndicate of the five other
reinsurers, their disclosure would be irrelevant to founding the basis
of any cause of action by the defendant reassured against the
reinsurers, as they were not bound by the arbitration agreement
between the plaintiffs and defendant. Accordingly, Colman, J. held
that the interim award was not a necessary element to the
establishment of the defendant's legal rights against the five
following reinsurers, and the defendant reassured would be in
breach of an implied duty of confidentiality if it were to disclose the
interim award to those five reinsurers.
In contrast to the reinsurance cases discussed above, London &

Leeds Estates Ltd. v. Paribas Ltd. (No. 2) (21) raises the question of
10
whether the parties in an arbitration owe any duty of confidentiality

to an expert witness in an arbitration where the witness was found to
have given evidence that was inconsistent with the evidence that he
had given in previous arbitrations. London & Leeds arose out of a
rent review arbitration between the plaintiff landlord and the
defendant tenant. The landlord retained an expert valuer (the
“Expert”) who gave evidence on the office rental market in London's
West End relevant to the review date of April 1991. The Expert was
also involved in two previous arbitrations, the “Euston Tower”
arbitration and “Delta Point” arbitration, in which the Expert had
given contrary expert evidence on behalf of the tenants. Counsel for
the defendant tenant in this arbitration had also been counsel for the
tenant in the Euston Tower arbitration, and had cross-examined the
Expert on the evidence he had given in the Euston Tower
arbitration. The defendant's expert in this arbitration was the
arbitrator in the Delta Point arbitration, but he had completed and
published his award, and the only ancillary matters left outstanding
were costs and interest. Subsequently, the defendant tenant issued
subpoenas addressed to the Expert relating to his Euston Tower
and Delta Point proofs (witness statements), and to the defendant's
expert relating to the Expert's Delta Point proof. The plaintiff landlord
and Expert applied by separate summons to set aside the
subpoenas addressed to the Expert and the defendant's expert. By
the hearing of the page "616" present case, the defendant's
expert had complied with the subpoena addressed to him. It was not
disputed that the parties to the Euston Tower and Delta Point
arbitrations owed each other a duty of confidence and privacy in
respect of the arbitration and the evidence given during it. Mance, J.
held that the plaintiff landlord had no locus standi in the matter as it
was not a party to any confidential relationship involving the
information sought by the subpoenas. However, Mance, J. held that
the Expert had locus standi to object to the subpoenas as he was
owed a duty of confidentiality by the parties to the Euston Tower and
Delta Point arbitrations in respect of his evidence. The issue before
Mance, J. was whether it was necessary for the fair disposal of the
action or for the saving of costs for the duty of confidentiality to be
overridden. Mance, J. held that, where a witness was proved to
have expressed himself in a materially different sense when acting
for different sides, that would be a factor which should be brought
out in the interests of individual litigants involved and in the public
interest. Mance, J. therefore concluded that the duty of
confidentiality attaching to the proof in the Euston Tower arbitration
was overridden in the interest of the fair disposal of the proceedings.
VII. How Have the Courts Dealt with Exceptions?
Legislatures and arbitral institutions have generally recognized the

difficulty of enacting a comprehensive code of exceptions or a
formula for creating exceptions. Hence, exceptions have been
introduced into the common law by incremental additions.
A. Public interest
11
The nature of the arbitration may give the public a legitimate interest
in certain aspects of the arbitration. In Esso Australia Resources Ltd.
v. Plowman (Minister for Energy and Minerals), (22) the arbitration
concerned a dispute over a proposed increase in the price of natural
gas supplied by the appellant vendors (Esso/BHP) to two public
utilities, the Gas and Fuel Corporation of Victoria (GFC) and the
State Electricity Commission of Victoria (SEC) allegedly due to the
imposition of a new tax on gas. GFC and SEC had entered into
separate sales agreements with the appellants. Both the GFC sales
agreement and SEC sales agreement contained a provision which
required the appellants to provide GFC and SEC as buyers of the
gas with details of the calculations on the basis of which an increase
or decrease in the price of gas was derived. The appellants did not
provide the details of the calculations to GFC and SEC. The
appellants later commenced arbitrations pursuant to the arbitration
clauses in the GFC and SEC sales agreements, respectively.
Subsequently, the Minister for Energy and Minerals brought an
action against the appellants, as well as GFC and SEC, seeking a
declaration that any information disclosed in the arbitration was not
subject to any duty of confidentiality. By way of counterclaim, the
page "617" appellants sought declarations, based on implied
terms, that each arbitration was to be conducted in private and the
documents or information supplied in the arbitration were subject to
a duty of confidentiality. Both GFC and SEC brought a crossclaim
against the appellants seeking declarations in the same terms as the
declarations sought by the minister. The claims for confidentiality
arose from the appellants' response to requests by the minister,
GFC and SEC for details of the calculations on which the appellants'
claims for price increases were based. The appellants had declined
to give details unless GFC and SEC entered into agreements that
they would not disclose the information to anyone else, including the
minister, the Executive Government and the people of Victoria.
Mason, C.J., delivering the judgment of the majority in the High
Court of Australia, considered that there was a distinction between
privacy and the duty of confidentiality, and that it was clear that
complete confidentiality of the proceedings in an arbitration could
not be achieved. (23) Mason, C.J. held that, while an arbitration
proceeding is private, confidentiality is not an essential attribute of a
private arbitration imposing an obligation on each party not to
disclose the proceedings or documents and information provided in
and for the purposes of the arbitration. To that extent, Mason, C.J.
therefore rejected the English approach to the obligation of
confidentiality as an implied term. Nonetheless, Mason, C.J. was
prepared to accept that there is, similar to the obligation of
confidentiality attaching to documents obtained on disclosure in
judicial proceedings, an obligation of confidentiality that attaches to
documents which a party is compelled to produce pursuant to a
direction by the arbitrator. (24) That obligation is, however, necessarily
subject to the public's legitimate interest in obtaining information
about the affairs of public authorities. The subject matter of the
arbitration also affected the public's interest in knowing how the cost
12
of their utilities bills was derived, and this might well have been a
factor influencing the decision of the High Court of Australia.
Likewise, Robertson, J. in the New Zealand case of Television New
Zealand Ltd. v. Langley Productions Ltd. (25) found that the public
interest in knowing how much a well-known TV personality was paid
was additional justification for not suppressing reporting of the court
hearing of the appeal from the arbitration hearing.
This feature is particularly prevalent in International Centre for

Settlement of Investment Disputes (ICSID) arbitrations, where there
is clearly a public interest in any arbitration by an investor against a
government, especially if the claim is for a large sum of damages.
This explains why it is commonplace for investment arbitrations to
be relatively freely reported; awards are rarely secret, and inevitably
find their way into the public domain. (26)
page "618"
B. Where the matter has come to court
An arbitration claim often comes to court for, among other things,

the enforcement or setting aside of the arbitral award, and the issue
is whether the implied obligation of confidentiality in the arbitration
proceeding extends to the court proceedings. While parties may
have agreed to arbitrate confidentially and privately, this cannot
dictate the position in respect of arbitration claims that are brought
before the courts. One countervailing factor that militates against the
extension of the implied obligation of confidentiality to court
proceedings is the principle of open justice.
For instance, under the English Civil Procedure Rules (CPR) rule
62.10, the English courts have the discretion to order an arbitration
claim to be heard in public or in private. Further, CPR rule 62.10 (27)
excludes the application of the ordinary rule under CPR rule 39.2,
under which hearings are to be held in public unless the court
decides that there is a special reason based on confidentiality to
hold the hearing in private. Under CPR rule 62.10(3), apart from
applications for the determination of a preliminary point of law under
section 45 of the English Arbitration Act 1996, or an appeal under
section 69 of the English Arbitration Act 1996 on a question of law
arising out of an award, all other arbitration claims are heard in
private.
In Department of Economics, Policy and Development of the City of

Moscow v. Bankers Trust Co., (28) the English Court of Appeal
considered the effect of CPR rule 62.10, as well as its implications
on the publication of court judgments on arbitration claims. In an
arbitration in London, Bankers Trust Co. (BTC) was successful
against one party but not against two other parties, one of which
was the government and the other a department of the city of
Moscow (“Moscow”). BTC proceeded to challenge the arbitral award
under section 68 of the 1996 Act on the ground of serious
13
irregularity, which was eventually dismissed. The arbitration took

place in private and the arbitral award was published only to the
parties. While BTC's application was also heard in private as it fell
within CPR rule 62.10(3)(b), the judge omitted to mark the judgment
as “private” when it was handed down. Lawtel, an online law
reporting service, obtained a copy of the judgment in good faith and
summarized it. The summary was later sent to Lawtel's
(approximately 15,000) email subscribers with a link to the full
judgment. After the mistake was discovered, the full judgment was
deleted, but the email summaries remained on the computers of
Lawtel's page "619" email subscribers. Prior to this, however,
the existence of a dispute between the parties (not the subject
matter), the identities of the parties and the existence of BTC's
application in court had already been freely mentioned to the press
by the parties. As the respondent wanted the general investment
community to know that the allegations of financial default against
them had been the subject of detailed consideration in arbitration,
the respondent applied to the court for an order for general
publication of the full judgment or alternatively, a summary of the
judgment. The lower court held that the judgment on the section 68
application should remain private and that neither it nor Lawtel's
summary should be available for publication. Moscow appealed to
the Court of Appeal on the basis that either the full judgment should
be made available, or the Lawtel summary should be available
either for general publication or limited publication to specified
financial institutions.
In dismissing the appeal against the order refusing publication of the

judgment, the English Court of Appeal held that the parties' wish for
confidentiality and privacy should outweigh the public interest in
public hearings. However, the Court of Appeal added that the court
retained a supervisory role under the English Arbitration Act 1996,
and the court had to be ready to hear representations from either
party for the hearing to continue in public or, where appropriate, to
raise that possibility itself.
The Court of Appeal, however, allowed the appeal in respect of the

Lawtel summary, and held that Moscow could publish the Lawtel
summary for general circulation since it did not disclose any
sensitive or confidential information, and there were no other
grounds to preclude its publication.
Significantly, the Court of Appeal held that CPR rule 62.10(3)(b), in

providing for arbitration claims to be heard in private, represented
only the starting point of the analysis, and could easily give way to a
public hearing. The court further held that, even though a hearing
might have been in private, the court should, when preparing and
giving judgment, bear in mind that any judgment should be given in
public, where this could be done without disclosing significant
confidential information.
Mance, L.J. considered various factors which were relevant to

whether a judgment should be given in public:
14
The public interest in ensuring appropriate standards

of fairness in the conduct of arbitrations militates in
favour of a public judgment in respect of judgments
given on applications under section 68. The
desirability of public scrutiny as a means by which
confidence in the courts can be maintained and the
administration of justice made transparent applies
here as in other areas of court activity … Arbitration is
an important feature of international, commercial and
financial life, and there is legitimate interest in its
operation and practice. The desirability of a public
judgment is particularly present in any case where a
judgment involves points of law or practice which may
offer future guidance to lawyers or practitioners. (29)
A similar position has been taken in New Zealand concerning the

treatment of arbitral awards in enforcement or challenge
proceedings in the courts. In Television New page
"620" Zealand v. Langley Productions, (30) disputes arose out of
interrelated contracts between Television New Zealand Ltd. (TVNZ),
a state-owned enterprise, Langley Productions and one of its
newsreaders (H) and litigation ensued. TVNZ sought to keep the
court file confidential, but Langley Productions and H sought the
opposite. There was an arbitration clause in the contract between
TVNZ and Langley Productions but not in the contract between
TVNZ and H. The parties eventually agreed to submit their disputes
to arbitration. The arbitration agreement contained a specific
confidentiality clause expressing itself subject to section 14(2) of the
New Zealand Arbitration Act 1996. After the award was rendered,
TVNZ applied to the High Court to appeal against the decision of the
arbitrator, and Langley Productions applied to enforce the award.
TVNZ then applied for an order that the confidentiality provisions no
longer applied, and Langley Productions and H opposed the
application. Robertson, J. held that the confidentiality provisions in
the arbitration no longer applied, as “the confidentiality which the
parties have adopted and embraced with regard to their dispute
resolution in arbitration cannot automatically extend to processes for
enforcement or challenge in the High Court.” (31) He also noted that
the parties specifically chose to allow for the right of appeal, and that
one party had sought to register the award and enforce it in the High
Court. Robertson, J. concluded that, once either of those steps
occurred, the principles applicable to the High Court hearings would
determine the question of access and public knowledge. If the cloak
of confidentiality in private dispute resolution necessarily applied to
subsequent proceedings in the High Court, then this would require a
clear and unambiguous determination of Parliament. Accordingly,
Robertson, J. held that the arbitral award should be available for
public scrutiny and without any impediment being created by the
confidentiality clause in the TVNZ-Langley Productions contract, and
that the proceedings to dispose of certain matters would also take
place in public.
15
C. Consent of the parties (pre/post dispute; implied?)
The consent of the parties to public disclosure of the existence of

the arbitration (as well as arbitration-related information) is another
exception to the implied obligation of confidentiality. For instance,
the consent of the parties can be written into the substantive
agreement between the parties, or given after a dispute has arisen
in a post-dispute arbitration agreement. The implied consent of the
parties can arise from the parties' conduct after a dispute has arisen.
One example of this is where an arbitrating party applies to the court
for the removal of an arbitrator, in which case that arbitrating party
implicitly gives consent to the challenged arbitrator to disclose
matters concerning the arbitration to the court. A further question
that arises in this context is whether an application to the court
arising out of an arbitration, without an arbitrating party asking for
those proceedings to be held in camera (assuming such provisions
exist in the relevant national court), amounts to a consent to public
disclosure of all facts and documents put before the court.
page "621"
D. By compulsion of law
Statutory provisions may override any obligation of confidentiality

that parties may have provided for in an arbitration agreement and
compel disclosure of arbitration-related documents. Anti-money
laundering legislation, for instance, imposes a duty of disclosure on
a person who suspects that a transaction may involve property that,
directly or indirectly, represents the proceeds of crime. In Singapore,
the relevant anti-money laundering legislation is the Corruption,
Drug Trafficking and Other Serious Crimes (Confiscation of Benefits)
Act (Cap. 65A) (SCA). Section 39(1) of the SCA (32) imposes a duty
of disclosure on a person who knows or has reasonable grounds to
suspect that certain property may represent the proceeds of, or is
used in connection with, drug trafficking or other criminal conduct.
However, section 39(6) of the SCA (33) excuses an arbitrating party
from any breach of the obligation of confidentiality, and bars any
claim against the arbitrating party as a result of a disclosure
pursuant to section 39(1) of the same Act. (34) Likewise, any police or
public authority may have statutory power to demand production of
documents, and there is no privilege attaching to documents
submitted in arbitration.
E. With leave of court
Although various cases have recognized the disclosure of arbitration

-related documents with leave of court as an exception to the
obligation of confidentiality, (35) the question remains as to whether or
16
not a court or tribunal order for disclosure overrides the obligation of

confidentiality. (36)
In Hassneh Insurance, Colman, J. advised on the disclosure of

arbitration documents subject to an obligation of confidentiality as
follows:
If a party is put in a “potentially extremely hazardous”

position and cannot decide whether to disclose
documents as in doing so he may therefore be in
breach of his duty of confidentiality to the opposite
party to the arbitration or be accused of failing to
disclose a relevant document in his possession which
would be necessary for fairly disposing of the litigation,
he should first write page "622" to his opposite
party in the arbitration inviting consent to disclose; if
this is not forthcoming, he should decline to let the
third party inspect the same without first obtaining an
order of court under O. 24 r. 11 of the Rules of Court.
However, the English Court of Appeal in Emmott expressed the view

that the court does not have a general power to order or give
permission for disclosure of arbitration-related documents when an
arbitration is underway. Thomas, L.J. considered that leave of the
court is a matter which arises in circumstances where the court is
deciding the issue as between a party to the arbitration and a
stranger (as where the court is ordering disclosure in litigation of
arbitration documents in the possession of one party) or in
circumstances where the arbitration has come to an end. Thomas,
L.J. further considered that:
[i]t is difficult to see readily how it is consistent with the

principles in the 1996 Act that there is to be an implied
term which requires resort to the court during the
currency of the arbitration for the court to determine
these issues as between the parties to the arbitration
… I cannot accept that the implied term of
confidentiality should be formulated to confer by this
means jurisdiction on the court; it would be contrary to
the ethos and policy of the Act. (37)
Collins, L.J. in Emmott expressed similar sentiments:
[i]t does not follow from the fact that a court refers to
the possibility of an exception for the order or leave of
the court in a case where it has the power to make the
order or give leave … the court has a general and
unlimited jurisdiction to consider whether an exception
to confidentiality exists and applies. (38)
These remarks are problematical, because they seem to preclude

the intervention of an independent third party to resolve difficulties in
defining the scope and extent of exceptions to confidentiality.
However, this problem will be addressed in the conclusion below.
17
F. Disclosure for protecting legitimate interests of an arbitrating

party
The disclosure of arbitration documents for the protection of the

legitimate interests of an arbitrating party is clearly a potentially very
wide exception. The enforcement of an arbitrating party's rights
under an earlier arbitration award would certainly be a disclosure for
protecting the legitimate interests of the winning party. Alternatively,
a party may wish to disclose an arbitration award to adduce
evidence of a position that was taken by an arbitrating party in an
earlier arbitration so as to raise issue estoppel. In Associated
Electric and Gas Insurance Services Ltd. (AEGIS) v. European
Reinsurance Company of Zurich, (39) a case arising out of two
separate arbitrations concerning European Reinsurance's
(“European Re.”) obligation to indemnify AEGIS under a reinsurance
agreement, European Re. sought to refer to the arbitration award
obtained from the first arbitration in the second arbitration on the
basis that the same dispute had been raised on the pleadings in the
second arbitration between the same parties. The tribunals for both
the first and second arbitrations page "623" were different. As
there was an express confidentiality agreement between the parties
that had been entered into in the course of the first arbitration,
AEGIS contended that the award in the first arbitration should not be
disclosed to the tribunal in the second arbitration because it would
breach the confidentiality of the first arbitration. Subsequently,
AEGIS obtained an ex parte injunction against European Re. in
order to stop European Re. from referring to the award from the first
arbitration, thereby precluding European Re. from raising a plea of
issue estoppel in the second arbitration. European Re. applied
unsuccessfully to discharge the injunction. European Re. then
appealed successfully to the Court of Appeal of Bermuda, and
discharged the injunction. AEGIS appealed to the Privy Council and
sought to reinstate the injunction to restrain European Re. from
disclosing the arbitral award in the first arbitration to any third party,
including the tribunal in the second arbitration. The issue before the
Privy Council was whether, on its proper construction, a
confidentiality agreement that the parties had entered into in the first
arbitration precluded reliance on the arbitral award in the second
arbitration.
In dismissing AEGIS' appeal, the Privy Council held that the

confidentiality agreement between the parties did not preclude
reliance on the arbitral award in the first arbitration. The Privy
Council was of the view that the principle of issue estoppel meant
that the parties to proceedings were bound by an earlier arbitral
award on the same issue, and that confidentiality was immaterial. In
that context, the Privy Council considered that issue estoppel was “a
species of the enforcement of the rights given by the award just as
much as it would be a cause of action estoppel” even though it was
a rule of evidence rather than a mechanism for enforcement as
such. (40)
18
There is a requirement of reasonable necessity in the application of

this exception for disclosure in the protection of the legitimate
interests of an arbitrating party. In Ali Shipping Corp. v. Shipyard
Trogir, (41) Potter, L.J. framed this requirement as follows: “disclosure
when, and to the extent to which, it is reasonably necessary for the
protection of the legitimate interests of an arbitrating party”.
However, Potter, L.J. also added that:
In this context, that means reasonably necessary for

the establishment of an arbitrating party's legal rights
vis-à-vis a third party in order to found a cause of
action against that third party or to defend a claim, or
counterclaim, brought by the third party. (42)
In Ali Shipping, Potter, L.J. noted the comments of Colman, J. in

Hassneh Insurance that it was not enough that an award or reasons
might have a commercially persuasive impact on the third party to
whom they are disclosed, nor that their disclosure would be “merely
helpful, as distinct from necessary, for the protection of such rights,”
but went on page "624" to qualify the concept of reasonable
necessity as he considered that the court should take a rounded
view.
Potter, L.J. stated that:
When the concept of reasonable “necessity” comes

into play in relation to the enforcement or protection of
a party's legal rights, it seems to me to require a
degree of flexibility in the court's approach. For
instance, in reaching its decision, the court should not
require the parties seeking disclosure to prove
necessity regardless of difficulty or expense. It should
approach the matter in the round, taking account of
the nature and purpose of the proceedings for which
the material is required, the powers and procedures of
the tribunal in which the proceedings are being
conducted, the issues to which the evidence or
information sought is directed and the practicality and
expense of obtaining such evidence or information
elsewhere. (43)
One question that arises from Potter, L.J.'s observations above is

whether the protection of the legitimate interests of an arbitrating
party is only confined to the protection of that arbitrating party's
legitimate interests vis-à-vis a third party. Notably, in Emmott, the
Court of Appeal did not appear to confine the protection of the
legitimate interests of an arbitrating party vis-à-vis a third party only.
Thomas, L.J. did not state that a third party was necessary to
establish this exception: “Use can, however, be made [of arbitration
documents] if it is reasonably necessary to protect the legitimate
private interests of a party.” (44)
19
G. Where the interests of justice/the public interest require it
If a party has given inconsistent evidence in two separate

arbitrations, it is clear that the interests of justice (sometimes called
public interest) would require disclosure of arbitration documents in
spite of any obligation of confidentiality. In London & Leeds, (45) it was
found that an expert valuer in an arbitration had given contrary
expert evidence in two previous arbitrations. As discussed above, (46)
Mance, L.J. held that, where a witness was proved to have
expressed himself in a materially different sense when acting for
different sides, that would be a factor which should be brought out in
the interests of individual litigants involved and in the public interest.
Mance, L.J. therefore held that the duty of confidentiality that the
parties in the two previous arbitrations owed to the expert valuer in
respect of his evidence in those arbitrations was overridden in the
interests of the fair disposal of the proceedings.
It is useful to note that there is an issue of whether the interests of

justice is an exception in itself, or whether it is part of a wider public
interest. The English courts appear to be divided in their opinion on
this. The public interest exception was expressly recognized by
Mance, L.J. in London & Leeds, (47) and also by Thomas, L.J. in
page "625" Emmott. (48) However, Potter, L.J. in Ali Shipping
preferred the “interests of justice” which he considered to be
narrower than the “public interest” exception. (49) Likewise, Collins,
L.J. in Emmott expressly recognized the interests of justice
exception, but only tentatively recognized the public interest
exception. (50)
Like the legitimate interests exception, there also seems to be a

reasonable necessity requirement for the public interest exception,
in that disclosure of arbitration documents subject to an obligation of
confidentiality should go no further than is reasonably necessary to
achieve the purpose of that public interest in disclosure. (51)
H. Where there is an obligation of disclosure
Corporations owe an obligation of disclosure to various stakeholders

who would, according to conventional theory, be strangers to the
arbitration, but who certainly have a legitimate interest in the
progress and outcome of the arbitration. Such stakeholders include:
(a) shareholders;
(b) bondholders;
(c) beneficiaries of trust corporations;
(d) any stock exchange or professional body to which an arbitrating
party belongs;
20
(e) joint venture partners or anyone covered by the uberrimae fidei

principle;
(f) a potential new shareholder acquirer conducting due diligence;
and
(g) insurers under an indemnity policy covering the subject matter
of the arbitration.
Likewise, insurance and reinsurance companies may owe

obligations of disclosure to each other. Parties who are in contracts
with back to back obligations may also be subject to an obligation of
disclosure.
I. Everyday situations
The authorities do not discuss everyday situations which would most

certainly be exceptions to the obligation of confidentiality, but one
can conceive of a myriad of such everyday situations. Some
examples of these situations include:
(a) discussing an arbitration with members of the family (after

swearing them to secrecy);
(b) discussing an arbitration with lawyers in the same firm to check
for conflicts;
(c) discussing an arbitration with potential arbitrators;
(d) disclosing details of an arbitration to an immigration office in a
visa application.
page "626"
J. Where disclosure is made to professional or other advisers

and persons assisting in the conduct of the arbitration
Where the disclosure of arbitration documents is made to

professional or other advisers and persons assisting in the conduct
of the arbitration, this should be treated as a legitimate exception to
the obligation of confidentiality. Any disclosure to lawyers who are
not involved in the arbitration should not be a problem because
lawyers are subject to legal professional privilege in any case. Any
disclosure made to persons assisting in the conduct of the
arbitration should also be an exception to the obligation of
confidentiality. Such persons include:
(a) potential witnesses, both factual and expert;

(b) private investigators;
(c) executives or in-house counsel of affiliate companies;
(d) secretaries and personal assistants to persons working on the
arbitration even if not employees of the arbitrating party (e.g.,
from related or affiliated companies); and
(e) independent providers of business services (transcribers,
interpreters, photocopiers, hotel business centers, couriers).
21
VIII. The Problems of Drafting
It is clear that there are a myriad number of exceptions to the

obligation of confidentiality, some of which have been expressly
recognized by the courts. The reservations of the Privy Council in
AEGIS to adopting Potter, L.J.'s approach in Ali Shipping of
characterizing a duty of confidentiality as an implied term, and then
to formulate exceptions to which it would be subject, (52) clearly
highlight the problems of drafting appropriate national legislation or
arbitral rules to provide for some form of confidentiality in arbitration.
In delivering the advice of the Privy Council in AEGIS, Lord
Hobhouse aptly pointed out that formulating exceptions to the
obligation of confidentiality runs the risk of failing to distinguish
between different types of confidentiality which attach to different
types of document or to documents which have been obtained in
different ways, and elides privacy and confidentiality. (53)
The drafters of the English Arbitration Act 1996 were fully aware of
the numerous exceptions and qualifications to the obligation of
confidentiality, and the consequent difficulty of drafting provisions to
govern confidentiality in arbitration. In the English Departmental
Advisory Committee Report of February 1996 on the draft Arbitration
Bill (“DAC Report”), it was considered that the privacy and
confidentiality in arbitrations was one area of law which was better
left to the common law to evolve. The DAC Report noted that:
page "627"
Given these exceptions and qualifications, the

formulation of any statutory principles would be likely
to create new impediments to the practice of English
arbitration and, in particular, to add to English litigation
on the issue. Far from solving a difficulty, the DAC was
firmly of the view that it would create new ones.
Indeed, even if acceptable statutory guidelines could
be formulated, there would remain the difficulty of
fixing and enforcing sanctions for non-compliance. (54)
The New Zealand Law Commission expressed similar views

regarding the inadequacy of the previous section 14 of the New
Zealand Arbitration Act 1996, (55) and its failure to deal with the many
exceptions to the obligation of confidentiality. (56) J. Bruce Robertson,
J. led the New Zealand Law Commission in drafting its report on the
amendments to the New Zealand Arbitration Act (the “Robertson
Report”), and the Robertson Report made the following observations
on the previous section 14 of the New Zealand Arbitration Act 1996:
Section 14, however, arguably contains flaws: First,

the exceptions to the implied term seem insufficiently
wide to deal with many everyday situations where
disclosure may be necessary. In England, for
example, cases have recognized exceptions to their
22
common law rule, which may not be contemplated

under section 14. Second, it is arguable that no
statutory implied term can ever set out exhaustively all
of the exceptions that may arise; these need to be
determined on a case-by-case basis. (57)
IX. How has National Legislation Dealt with the Obligation of

Confidentiality?
A. UNCITRAL model law and rules
The UNCITRAL Model Law does not say anything about

confidentiality. (58) Likewise, the UNCITRAL Arbitration Rules do not
provide for confidentiality, page "628" apart from the award,
which may be made public only with the consent of both parties. (59)
The UNCITRAL Notes for Organizing Arbitral Proceedings make the

following points:
(a) There is no uniform answer in national laws as to the extent to

which the participants in an arbitration are under a duty to
observe the confidentiality of information relating to the case.
(b) Parties that have agreed on arbitration rules or other provisions
that do not expressly address the issue of confidentiality cannot
assume that all jurisdictions would recognize an implied
commitment to confidentiality.
(c) Participants in an arbitration might not have the same
understanding as regards the extent of confidentiality that is
expected. (60)
B. Hong Kong
Currently, section 2D of the Hong Kong Arbitration Ordinance allows

a party to apply for court proceedings concerning arbitration to be
heard otherwise than in open court. (61) Section 2E of the Arbitration
Ordinance restricts the reporting of proceedings otherwise than in
open court. (62)
The Hong Kong draft Arbitration Bill 2007 departs from the existing
sections 2D and 2E because the presumption now is that arbitration
court proceedings will be heard in open court. (63) Apart from this
significant amendment, the draft Arbitration Bill retains the wording
of sections 2D and 2E in clauses 16(2) and 17(1) to (4) respectively.
Clauses 17(5) and (6) add a provision allowing judgments to be
published with sanitization if the court thinks fit, as well as a blanket
prohibition of reporting on proceedings heard otherwise than in open
court for a period of up to ten years. (64) Clause 18 of the draft
Arbitration Bill (65) adopts the previous section 14 of the New Zealand
23
Arbitration Act 1996 (despite criticisms made of it in the Robertson

Report) but adds clause 18(2)(b) to cover the publication, disclosure
or communication that a party is obliged to make by virtue of other
provisions of the law. Clause 18(2)(a) permits the disclosure of
information relating to arbitral proceedings and awards made in
those proceedings in certain situations “as contemplated by this
Ordinance,” which include:
(a) an application by a party for proceedings to be heard otherwise

than in open court (clause 16);
(b) restrictions on reporting of proceedings heard otherwise than in
open court (clause 17);
(c) a challenge of arbitrators (clause 26);
(d) court-ordered interim measures (clause 46);
(e) special powers of the court in relation to arbitral proceedings
(clause 61);
(f) enforcement of orders and directions of arbitral tribunal (clause
62);
(g) taxation of costs of arbitral proceedings (other than fees and
expenses of arbitral tribunal) (clause 76);
(h) applications for setting aside of arbitral award (clause 82);
(i) enforcement of arbitral awards (clauses 85, 86);
(j) enforcement of convention awards (clause 88, 89); refusal of
enforcement of convention awards (clause 90);
(k) consolidation of arbitrations (Schedule 3, clause 2); page
"630"
(l) determination of preliminary question of law by court (Schedule
3, clause 3);
(m) challenging arbitral award on ground of serious irregularity
(Schedule 3, clause 4);
(n) appeal against arbitral award on question of law (Schedule 3,
clause 5); and
(o) application for leave to appeal against arbitral award on
question of law (Schedule 3, clause 6).
There is no guidance given to the court in the current Arbitration

Ordinance and the draft Arbitration Bill as to what criteria to apply
when ordering a closed door hearing. (66)
C. New Zealand
As discussed above, the previous section 14 of the New Zealand

Arbitration Act 1996 was criticized in the February 2003 Robertson
Report, and the main criticisms were as follows:
(a) Exceptions to the implied term seem insufficiently wide to deal

with many everyday situations where disclosure may be
necessary.
24
(b) No statutory implied term can ever set out exhaustively all of the
exceptions that may arise; these need to be determined on a
case-by-case basis.
(c) The previous section 14 did not address the concept of open
justice in the context of arbitrations that result in subsequent
proceedings for challenge or enforcement in the courts. (67)
In response to the criticisms of the previous section 14 of the

Arbitration Act 1996, the New Zealand Law Commission's
recommendations were as follows:
(1) The hearing should take place in private.

(2) Subject to (c) to (d) below, the arbitral tribunal and the parties to
the arbitration agreement should not disclose pleadings,
evidence, discovered documents or the award arising from the
arbitration.
(3) The requirement is subject to disclosure when compelled by
court order or subpoena, or to a professional or other adviser of
any of the parties.
(4) The arbitrating parties may apply to the arbitral tribunal for an
order that they be permitted to disclose information otherwise
protected by the implied term. Such an order:
(i) should only be made after the arbitral tribunal has heard
from the arbitrating parties; and page "631"
(ii) if the arbitral tribunal is satisfied that:
such an order is necessary to enable the party applying
for disclosure to comply with any statutory, contractual or
regulatory requirement; and
disclosure of the information would have been required if
no dispute had arisen or the dispute had been resolved by
private means (e.g., negotiation or mediation) other than
arbitration.
(5) If the mandate of the arbitral tribunal has expired, the

application referred to in paragraph (d) would be made to the
High Court (which would apply the same criteria as the arbitral
tribunal).
(6) If the application is declined by an arbitral tribunal, then there
would be an automatic right of appeal to the High Court. There
is no appeal where the application is made at first instance to
the High Court.
Sections 14A to I of the Arbitration Act 1996 (introduced with effect

from October 18, 2007) therefore address the above
recommendations by the New Zealand Law Commission in the
Robertson Report. These provisions read as follows.
14A. Arbitral proceedings must be private
An arbitral tribunal must conduct the arbitral proceedings in private.
25
14B. Arbitration agreements deemed to prohibit disclosure of

confidential information
(1) Every arbitration agreement to which this section applies is

deemed to provide that the parties and the arbitral tribunal must
not disclose confidential information.
(2) Subsection (1) is subject to section 14C.
14C. Limits on prohibition on disclosure of confidential information in

section 14B
A party or an arbitral tribunal may disclose confidential information—
(a) to a professional or other adviser of any of the parties; or

(b) if both of the following matters apply:
(i) the disclosure is necessary—
(A) to ensure that a party has a full opportunity to present
the party's case, as required under Article 18 of
Schedule 1 [Model Law]; (68) or
(B) for the establishment or protection of a party's legal
rights in relation to a third party; or
(C) for the making and prosecution of an application to a
court under this Act; and
(ii) the disclosure is no more than what is reasonably required
to serve any of the purposes referred to in subparagraph (i)
(A) to (C); or
page "632"
(c) if the disclosure is in accordance with an order made, or a
subpoena issued, by a court; or
(d) if both of the following matters apply:
(i) the disclosure is authorised or required by law (except this
Act) or required by a competent regulatory body (including
New Zealand Exchange Limited); and
(ii) the party who, or the arbitral tribunal that, makes the
disclosure provides to the other party and the arbitral
tribunal or, as the case may be, the parties, written details
of the disclosure (including an explanation of the reasons
for the disclosure); or
(e) if the disclosure is in accordance with an order made by—
(i) an arbitral tribunal under section 14D; or
(ii) the High Court under section 14E.
14D. Arbitral tribunal may allow disclosure of confidential information

in certain circumstances
(1) This section applies if—
26
(a) a question arises in any arbitral proceedings as to whether

confidential information should be disclosed other than as
authorised under section 14C(a) to (d)); and
(b) at least one of the parties agrees to refer that question to
the arbitral tribunal concerned.
(2) The arbitral tribunal, after giving each of the parties an
opportunity to be heard, may make or refuse to make an order
allowing all or any of the parties to disclose confidential
information.
14E. High Court may allow or prohibit disclosure of confidential

information if arbitral proceedings have been terminated or party
lodges appeal concerning confidentiality
(1) The High Court may make an order allowing a party to disclose
any confidential information—
(a) on the application of that party, which application may be
made only if the mandate of the arbitral tribunal has been
terminated in accordance with Article 32 of Schedule 1
[termination of proceedings]; or
(b) on an appeal by that party, after an order under section
14D(2) allowing that party to disclose the confidential
information has been refused by an arbitral tribunal.
page "633"
(2) The High Court may make an order under subsection (1) only
if—
(a) it is satisfied, in the circumstances of the particular case,
that the public interest in preserving the confidentiality of
arbitral proceedings is outweighed by other considerations
that render it desirable in the public interest for the
confidential information to be disclosed; and
(b) the disclosure is no more than what is reasonably required
to serve the other considerations referred to in paragraph
(a).
(3) The High Court may make an order prohibiting a party (party A)
from disclosing confidential information on an appeal by another
party (party B) who unsuccessfully opposed an application by
party A for an order under section 14D(2) allowing party A to
disclose confidential information.
(4) The High Court may make an order under this section only if it
has given each of the parties an opportunity to be heard.
(5) The High Court may make an order under this section—
(a) unconditionally; or
(b) subject to any conditions it thinks fit.
(6) To avoid doubt, the High Court may, in imposing any conditions
under subsection (5)(b), include a condition that the order
ceases to have effect at a specified stage of the appeal
proceedings.
(7) The decision of the High Court under this section is final.
27
14F. Court proceedings under Act must be conducted in public

except in certain circumstances
(1) A court must conduct proceedings under this Act in public

unless the Court makes an order that the whole or any part of
the proceedings must be conducted in private.
(2) A court may make an order under subsection (1)—
(a) on the application of any party to the proceedings; and
(b) only if the Court is satisfied that the public interest in having
the proceedings conducted in public is outweighed by the
interests of any party to the proceedings in having the
whole or any part of the proceedings conducted in private.
(3) If an application is made for an order under subsection (1), the
fact that the application had been made, and the contents of the
application, must not be made public until the application is
determined.
(4) In this section and sections 14G to 14I,—
Court—
(a) means any court that has jurisdiction in regard to the matter
in question; and
(b) includes the High Court and the Court of Appeal; but
page "634"
(c) does not include an arbitral tribunal proceedings includes
all matters brought before the Court under this Act (for
example, an application to enforce an arbitral award).
14G. Applicant must state nature of, and reasons for seeking, order
to conduct Court proceedings in private
An applicant for an order under section 14F must state in the

application—
(a) whether the applicant is seeking an order for the whole or part
of the proceedings to be conducted in private; and
(b) the applicant's reasons for seeking the order.
14H. Matters that Court must consider in determining application for

order to conduct Court proceedings in private
In determining an application for an order under section 14F, the

Court must consider all of the following matters:
(a) the open justice principle; and

(b) the privacy and confidentiality of arbitral proceedings; and
(c) any other public interest considerations; and
(d) the terms of any arbitration agreement between the parties to
the proceedings; and
28
(e) the reasons stated by the applicant under section 14G(b).
14I. Effect of order to conduct Court proceedings in private
(1) If an order is made under section 14F,—

(a) no person may search, inspect, or copy any file or any
documents on a file in any office of the Court relating to the
proceedings for which the order was made; and
(b) the Court must not include in the Court's decision on the
proceedings any particulars that could identify the parties to
those proceedings.
(2) An order remains in force for the period specified in the order or
until it is sooner revoked by the Court on the further application
of any party to the proceedings.
D. Singapore
Section 22 of the Singapore International Arbitration Act (Cap. 143A)

(IAA) (69) allows a party to apply for court proceedings concerning
arbitration to be heard otherwise than in open court. Section 23 of
the IAA (70) restricts reporting of proceedings heard otherwise than in
open court. The Singapore position set out in sections 22 and
page "635" 23 of the IAA is more or less similar to the current
sections 2D and 2E of the Hong Kong Arbitration Ordinance.
One unresolved question in Singapore is whether, if no application is

made for a gag order, that amounts to a waiver of confidentiality so
that all court proceedings can be reported and the party is then
released from all obligations of confidentiality. Some arbitration
cases heard in the courts are reported without disclosure of parties'
names, (71) while other case reports identify the parties' names. (72)
Should the rules of confidentiality be different for these two kinds of
cases?
Australia, Sweden and the United States are three important

countries where confidentiality is not recognized as a legal incident
of arbitration unless parties expressly provide for it.
E. Australia
There is no national legislation on confidentiality in Australia, and the

High Court of Australia in Esso Australia (73) has declared that there
is no general rule of confidentiality except that there is a rule of
privacy in arbitration hearings. However, it also held that the privacy
attaching to an arbitration was just an incident of the subject matter
of the agreement to arbitrate rather than a term to be implied into the
arbitration agreement. (74)
F. Sweden
29
In Bulgarian Foreign Trade Bank Ltd. v. AI Trade Finance Inc., (75)

better known as the “Bulbank case,” the Swedish Supreme Court
held that there is no implied duty of confidentiality in private
arbitrations. Accordingly, there are only two ways to safeguard
confidentiality of arbitration proceedings under Swedish law: (i)
expressly contract for confidentiality; or (ii) adopt arbitration rules
that expressly provide for confidentiality.
page "636"
G. United States
Likewise, the United States does not recognize confidentiality as a

general rule. (76)
H. Dubai international financial centre (DIFC)
Section 14 of the DIFC Arbitration Law (DIFC Law No. 1 of 2008) (77)
does not provide for any release from the obligation of confidentiality
in arbitration, and does not envisage any further exceptions other
than by an order of the DIFC Court. It is therefore open to the DIFC
Court to interpret the general exception of the order of court as
allowing the DIFC Court to determine each application for leave
under section 14 according to the circumstances and merits of each
case, enabling the jurisprudence of exceptions to confidentiality to
be incrementally developed by case law, rather than relying only on
the established precedents.
X. How have Institutional Rules Dealt with the Obligation of

Confidentiality?
In a paper published in 2005, (78) the first author advanced the

argument that the common law debate about confidentiality was less
important than it seemed because in practice, most arbitrations were
institutional and most institutions gave some kind of protection of
confidentiality. The first author made an analysis of twelve
institutions as to the extent to which they protected confidentiality,
and highlighted six aspects of confidentiality:
(a) whether the rules provided for general confidentiality;

(b) whether the rules provided for non-disclosure of existence of
arbitration;
(c) whether the rules provided for confidentiality to extend to
documents used or generated in the arbitration;
(d) whether the tribunal was bound by confidentiality;
(e) whether witnesses were bound by confidentiality; and
(f) whether confidentiality extended to the award.
page "637"
30
Figure 1: Protection of confidentiality by arbitral institutions
Figure 1 shows the first author's scorecard on the protection of

confidentiality of the twelve institutions.
Based on the scorecard in Figure 1, most institutions had rules to

cover three or four of the first author's designated aspects of
confidentiality, and virtually all institutions recognized confidentiality
in some way. Unsurprisingly, the champion was World Intellectual
Property Organization (WIPO) with rules covering five out of six
aspects page "638" because it handles mainly intellectual
property disputes, and disputants in such cases value confidentiality.
31
A. ICC
Surprisingly, the ICC Rules of Arbitration (“ICC Rules”) say nothing

about confidentiality. The reason is that drafters found it too difficult
when they drafted the 1988 rules and the position remained the
same when the 1998 rules were drafted. This was partly due to the
problem of agreeing on exceptions, and partly because the ICC
Rules are meant for use in many countries, so it was difficult to
devise a rule which would not conflict with national arbitration laws.
Another problem was the lack of sanctions available.
However, there are some provisions in the ICC Rules that address
privacy and confidentiality (to a very limited extent). Article 21(3) of
the ICC Rules provides that arbitration hearings shall be held in
private. The tribunal may also take measures to protect trade
secrets and confidential information. (79) Further, the internal rules of
the International Court of Arbitration of the ICC prevent disclosure of
its proceedings. However, the Panhandle case held that these rules
were neither binding on the parties nor the tribunal. Hence, the court
in Panhandle refused to deny discovery of documents which had
been filed in an ICC arbitration in a separate court action.
Although the ICC does not have express rules about confidentiality,
in practice, the ICC pays great attention to confidentiality and warns
its arbitrators to observe confidentiality when they are appointed. In
addition, the ICC publishes sanitized accounts of their awards but
will not do so if the parties object.
B. ICSID
There is no express recognition of confidentiality in the ICSID

Convention, but the ICSID Rules of Procedure for Arbitration
Proceedings (“ICSID Rules”) require the tribunal to respect
confidentiality. (80) While the publication of the award as a whole
remains subject to the consent of the parties, (81) ICSID must
promptly publish excerpts of the legal reasoning of an ICSID award
regardless of whether the award is published as a whole. (82) The
Secretary-General arranges for the publication of the award in an
appropriate form with a view to furthering the development of
international law in relation to investments. (83) In practice, ICSID
arbitrations are widely publicized because of a great public interest
in arbitrations against governments. (84)
page "639"
C. WIPO
As mentioned above, the WIPO Arbitration Rules expressly provide

for five out of six aspects of the first author's scorecard on
32
confidentiality (see Figure 1). Although there is no rule expressing

the principle of confidentiality, given the five aspects of
confidentiality that the WIPO Arbitration Rules already cover, (85) it
could be argued that the general principle of confidentiality
underpins all the Rules.
D. SIAC
In Singapore, the SIAC Rules (3d edition, July 1, 2007) have the
most detailed institutional rule on confidentiality in Rule 34, (86) but
this is far from perfect. Rule 34 is still open to criticism by providing
(in effect) that the listed exceptions in Rule 34.2 are exhaustive with
no allowance for release from confidentiality by the tribunal or the
court.
E. HKIAC
The new HKIAC Administered Arbitration Rules are applicable to

international arbitrations with effect from September 1, 2008. Article
39 of the Administered Arbitration Rules (87) expressly provides for
five out of six aspects of the first author's scorecard on
confidentiality, and also provides that deliberations of the tribunal
are confidential. The obligation of confidentiality under Article 39
also applies to tribunal-appointed experts, the secretary to the
tribunal, HKIAC Secretariat and Council of the HKIAC. The
UNCITRAL Rules continue to govern unadministered international
arbitrations.
page "640"
Article 26 of the HKIAC Domestic Arbitration Rules (1993 edition)

also provides for confidentiality, (88) but the commentary on this
provision in the HKIAC Revised Guide to Arbitration under the
Domestic Arbitration Rules 1993 suggests that Article 26 follows the
position in Esso Australia. (89) In other words, apart from the
confidentiality which attaches to particular documents or classes of
documents, there is no implied obligation of confidentiality.
XI. What are the Possible Sanctions or Consequences of

Breach of Confidentiality?
If there is an established rule of confidentiality applicable to an

arbitration and there is a breach of that rule, what are the possible
sanctions and consequences that may arise? Sanctions against
breach of confidentiality are not easy to devise. A tribunal can issue
an injunction against future breaches of confidentiality, but if the
horse has bolted from the stable, such an injunction appears to be of
limited value if arbitration information has been disclosed.
What about the consequences of past breaches? If confidentiality is

considered a contractual right, then there can be a suit for damages
33
for breach, but damages for breach of confidentiality (whether

nominal or substantial) are difficult to establish (unless a liquidated
damages clause is used, but the difficulties of drafting such a clause
would require a separate article to explain). In Singapore, an
application can be made to court for an injunction to prevent future
breaches, and the court can impose sanctions for such breaches (at
least if the party is within the jurisdiction of the court). A further
question is whether an injured party can claim repudiatory breach of
contract and terminate the arbitration proceedings. However, this is
rare in practice because the consequence would be that a case
would have to be tried in court with no confidentiality at all.
XII. A Model Confidentiality clause?
One example of what may be a model confidentiality clause is set

out in Robert Merkin and Julian Critchlow, Arbitration Forms and
Precedents, (90) paragraph 1G.1.1 of which reads:
IG.1.1. Arbitration Clause providing for confidentiality
Neither party shall disclose to any third party the existence, nature,
content or outcome of any arbitration, or purported arbitration,
brought in respect of this Agreement.
Neither shall any party disclose to any third party: page "641"
(i) Any document prepared or procured in the course of or

otherwise for the purpose of the arbitration.
(ii) Any document prepared or procured by the other party and
received in the course of or otherwise for the purpose of the
arbitration.
(iii) Any document received directly or indirectly from the Tribunal
or any court of competent jurisdiction including, but not limited
to, any direction, order or award.
Save insofar as may be necessary for the purpose of conducting the

Arbitration itself, or making any application to a court of competent
jurisdiction in respect of the arbitration, or for the enforcement of any
order or award of the Tribunal, or of any order or judgment of the
Court, or as may be required to comply with any lawful authority.
If this model confidentiality clause is compared to some of the

provisions on confidentiality in sections 14A to I of the New Zealand
Arbitration Act 1996, it is clear that there can be no universal
confidentiality clause that can comprehensively cover the exceptions
to confidentiality. For example, the criteria for the disclosure of
confidential information where it is necessary for the purpose of
conducting the arbitration are not set out in this confidentiality
clause, but section 14C(b) of the New Zealand Arbitration Act 1996
describes circumstances where disclosure of confidential
information is necessary, and adds that the disclosure must at the
same time be “what is reasonably required” to serve those
circumstances. The model confidentiality clause also fails to provide
34
the arbitral tribunal with the discretion to allow disclosure of

confidential information in certain circumstances similar to that in
section 14D of the New Zealand Arbitration Act 1996, so that the
tribunal may deal with the questions concerning the disclosure of
confidential information before a party applies to court for an order.
In short, it is virtually impossible for a contractual confidentiality
clause to be drafted so as to encompass all of the possible
exceptions (including those mentioned earlier as everyday
situations), and not taking into account unforeseen situations where
justice or expediency would require an exception to be allowed. This
makes the intervention of a third party arbiter essential.
XIII. Conclusions
The authors' conclusions are therefore as follows.
(1) We need to clear our minds when addressing the question of

confidentiality in arbitration to understand the different facets of
that concept in order to understand the difficulty in defining the
rules and the exceptions to those rules.
(2) The most promising attempt to establish a complete code of
confidentiality is the current New Zealand model, but it is still an
imperfect code.
(3) The Robertson Report itself acknowledged that it was not able
to provide for all the exceptions to confidentiality in section 14
(C), and the committee did not think it desirable or practical to
set out a detailed code. In short, the most recent authoritative
investigation into the problem of confidentiality has conceded
page "642" that it is not possible to provide a
comprehensive list of all the exceptions to confidentiality. It
follows from this that the categories of exceptions are never
closed.
(4) It also follows that all the existing statutory provisions and
institutional rules providing for confidentiality are imperfect.
(5) Nevertheless, the New Zealand approach has introduced a
practical solution to the problem of the constant discovery of
new classes (as well as the modification of accepted
exceptions) to suit the circumstances of the particular case.
This solution is to allow the tribunal to determine on an ad hoc
basis whether or not there should be an exception to the
principle of confidentiality, and the exact scope of that exception
tailored to the case in question. The guidelines developed in the
New Zealand legislation for the exercise of the tribunal's
decision are useful in identifying the common situations where
exceptions will be recognized. However, there should be
residual discretion reserved to the tribunal to permit exceptions
to confidentiality where the justice of the case requires or where
it is otherwise appropriate to do so. This will allow the statutory
exceptions to be extended or restricted or otherwise modified by
individual tribunals. In short, there cannot be a “one-size-fits-all”
definition of the rule or its exceptions.
35
(6) Where the tribunal cannot perform this function (e.g., after it has
become functus officio) then that function should be performed
by the appropriate curial court.
(7) It may be thought that the remarks of Thomas and Collins,
L.JJ., quoted earlier, about the lack of jurisdiction of a court to
determine whether an exception to confidentiality exists and
applies could be an impediment to developing the proposed
solutions. However, (i) these remarks only apply to the English
Arbitration Act 1996; (ii) they only apply to preclude such
jurisdiction as an implied term; (iii) they do not therefore
preclude an express adoption of an independent third party to
resolve difficulties in identifying and defining the exceptions to
confidentiality.
XIV. Practical Solutions
A. How then should the problem be approached for the future?
1. Legislation
The New Zealand legislation is a promising start, but it needs to be

modified as suggested above. While it is certainly desirable to have
a clear definition of the general rule and a list of the more commonly
accepted exceptions to that rule, legislators should not make the
mistake of locking in the concept of confidentiality by a fixed list of
exceptions.
page "643"
2. Contractual Solutions
As a general rule, it would be too much to expect the contractual

parties to draft an arbitration clause that can address all the
concerns outlined in this article. The difficulties of defining the rule
and its exceptions are by now well known and, given that the
arbitration clause is often a “midnight clause” (i.e., added in at the
end of the contractual negotiations when neither party would like to
spend much time on it) it would be more likely than not that a
confidentiality clause would create more problems than it solved
because of insufficient definition of the exceptions (or worse still, not
providing for any exceptions) so that legitimate breaches of
confidentiality would apparently be prohibited by the arbitration
clause.
3. Institutional Rules
In general, arbitrating parties have solved the problem of

confidentiality (at least in part) by adopting institutional rules, and
most institutional rules provide for confidentiality to a greater or
lesser extent. But we have demonstrated above that none of the
36
institutional rules are perfect, and indeed can create problems where
the exceptions are insufficiently or imperfectly defined, leading to
difficulties for one or both parties in protecting their legitimate
interests because of the apparent inflexibility of those institutional
rules.
4. Model Clauses
The only medium term solution which might address the problems
set out in (2) and (3) above would be for a major arbitration research
institution (such as UNCITRAL, the ICC Commission, the Chartered
Institute or the International Council for Commercial Arbitration) to
develop a model law or a model clause for adoption by arbitration
institutions or contracting parties. This could be based on the New
Zealand model, adapted in the way suggested in conclusions (1)
and (6) above.
B. What should parties do in the meantime?
Until there is a change in the applicable laws, contractual provisions

or institutional rules governing confidentiality, we suggest that the
way forward for tribunals and parties to minimize the problems of
confidentiality could be as follows:
(1) The specific needs of confidentiality should be addressed at an

early directions meeting by parties and/or the tribunal of its own
motion and an order (ideally a consent order) be issued laying
out the parameters of confidentiality applicable to the particular
arbitration.
(2) The order should provide for a blanket rule of confidentiality but
allowing parties to apply to the tribunal for an exception to or
modification of that rule page "644" depending on the
circumstances of the case, with a fallback to the court should
the tribunal be unable to act (i.e., adapting sections 14A to 14I
of New Zealand Act as appropriate).
(3) This would in effect allow the tribunal to work as a common law
court to develop sensible and fair exceptions to the blanket rule.
(4) If institutional rules are already applicable to that tribunal, those
rules should be modified by a consent order (which is the only
way that those rules could be so modified) so that the tribunal
will have the residual power set out in (2) above.
(5) Ultimately, the solution would be truly ad hoc, but the strength
of the solution is that it will allow the parties and tribunals to
cope appropriately with the myriad situations (many of which
are unforeseeable) which will inevitably arise and which will
need to be accommodated so as to override confidentiality to a
greater or lesser extent.
page "645"
37
*
Michael Hwang S.C., Barrister, Chartered Arbitrator, Singapore.
**
Katie Chung, Associate, Chambers of Michael Hwang S.C. This is
an expanded version of the Kaplan Lecture delivered by the first
author in Hong Kong on November 17, 2008.
1
See infra Figure 1, where the first author's scorecard on the
protection of confidentiality by 12 arbitral institutions clearly shows
that, while not all institutional rules treat the existence of an
arbitration as confidential, most institutional rules treat the contents
of an arbitral award as confidential.
2
See, e.g., Dolling-Baker v. Merrett, [1990] 1 W.L.R. 1205 (C.A.);
Hassneh Insurance Co. of Israel v. Steuart J. Mew, [1993] 2 Lloyd's
Rep. 243 (Q.B. (Comm. Ct.)); Ali Shipping Corp. v. Shipyard Trogir,
[1999] 1 W.L.R. 314 (C.A.); Associated Electric and Gas Insurance
Services Ltd. (AEGIS) v. European Reinsurance Co. of Zurich,
[2003] 1 W.L.R. 1041 (P.C.); Emmott v. Michael Wilson & Partners,
[2008] EWCA (Civ) 184 (C.A.).
3
Emmott, supra note 2.
4
Id. para. 81.
5
Id. para. 129.
6
Id. paras. 79, 81.
7
Derived from Riddick v. Thames Board Mills Ltd., [1977] Q.B. 881
(C.A.).
8
The UNCITRAL Arbitration Rules do not provide for confidentiality
except for hearings to be held in camera unless the parties agree
otherwise (see art. 25(4)) and the publication of the award (see art.
32(5)).
9
See, e.g., Singapore International Arbitration Act (Cap. 143A)
[hereinafter “IAA”], ss. 22–23 and Hong Kong Arbitration Ordinance
(Cap. 341), ss. 2D–2E.
10
Supra note 2.
11
Emmott, supra note 2.
12
[1993] 2 Lloyd's Rep. 243 (Q.B. (Comm. Ct.)).
13
Id. at 248.
14
Id. at 249.
15
One exception is the Hong Kong Arbitration Ordinance, s. 6B,
which allows the court to consolidate two or more arbitration
proceedings in certain circumstances, e.g., a common question of
law or fact arises in both or all of the arbitrations (s. 6B(1)(a)). Other
exceptions include the LCIA Rules, art. 22.1(h), the SIAC Rules, rule
24 and HKIAC Administered Arbitration Rules, art. 39, all of which
allow joinder of third parties with their consent but not necessarily
the consent of all the existing parties.
16
[1990] 1 W.L.R. 1205 (C.A.).
38
17
Id. at 1213.
18
[1924] 1 K.B. 461 (C.A.).
19
[1995] 1 Lloyd's Rep. 272 (Q.B. (Comm. Ct.)).
20
Supra note 12, at 275.
21
[1995] 1 E.G.L.R. 102 (Q.B.).
22
[1995] 128 A.L.R. 391 (H.C.A.); Esso was followed by the
Supreme Court of New South Wales in Commonwealth of Australia
v. Cockatoo Dockyard Pty. Ltd., (1995) 36 N.S.W.L.R. 662.
23
Id. at 400–01.
24
Id. at 404.
25
[2000] N.Z.L.R. 250 (H.C.).
26
ICSID must promptly publish the legal reasoning of ICSID awards
regardless of the publication of the award as a whole. See ICSID
Rules of Procedure for Arbitration Proceedings (Arbitration Rules),
rule 48(4); art. 48(5) of the ICSID Convention on the Settlement of
Investment Disputes between States and Nationals of Other States
requires consent of the parties for the publication of the award in its
entirety. The Secretary-General of ICSID arranges for publication of
an award in an appropriate form with a view to furthering the
development of international law in relation to investments. See
ICSID Administrative and Financial Regulations, reg. 22. Rule 37(2)
of the ICSID Arbitration Rules allows the submission of amicus
briefs by third parties. ICSID awards, available at
<www.investmentclaims.com>.
27
CPR rule 62.10 reads as follows: “(1) The court may order that an
arbitration claim be heard either in public or in private. (2) Rule 39.2
does not apply. (3) Subject to any order made under paragraph (1):
(a) the determination of: (i) a preliminary point of law under section
45 of the 1996 Act; or (ii) an appeal under section 69 of the 1996 Act
on a question of law arising out of an award, will be heard in public;
and (b) all other arbitration claims will be heard in private. (4)
Paragraph (3)(a) does not apply to: (a) the preliminary question of
whether the court is satisfied of the matters set out in section 45(2)
(b); or (b) an application for permission to appeal under section 69
(2)(b).”
28
[2004] 3 W.L.R. 533; see also Mobil Cerro Negro Ltd. v. Petroleos
de Venezuela S.A., [2008] EWHC 532 (H.C.), a case concerning an
application to set aside a freezing order that had been granted
pursuant to s. 44 of the Arbitration Act 1996 in support of an
intended ICC arbitration. The application for setting aside fell under
CPR rule 62.10, which provided that such an application should be
heard in private unless the court ordered that the hearing be in
public. As the freezing order had received considerable publicity,
Walker, J. decided pursuant to CPR rule 62.10 that the hearing on
the application for setting aside should be in public save for those
aspects of the matter which were confidential.
29
[2004] 3 W.L.R. 533, 555.
30
[2000] N.Z.L.R. 250 (H.C.).
39
31
Id. para. 38.
32
Corruption, Drug Trafficking and Other Serious Crimes
(Confiscation of Benefits) Act (Cap. 65A), s. 39(1) reads as follows:
“39. Duty to disclose knowledge or suspicion (1) Where a person
knows or has reasonable grounds to suspect that any property: (a)
in whole or in part, directly or indirectly, represents the proceeds of;
(b) was used in connection with; or (c) is intended to be used in
connection with, any act which may constitute drug trafficking or
criminal conduct, as the case may be, and the information or matter
on which the knowledge or suspicion is based came to his attention
in the course of his trade, profession, business or employment, he
shall disclose the knowledge or suspicion or the information or other
matter on which that knowledge or suspicion is based to a
Suspicious Transaction Reporting Officer as soon as is reasonably
practicable after it comes to his attention.”
33
Id. s. 39(6) reads as follows: “(6) Where a person discloses in
good faith to a Suspicious Transaction Reporting Officer (a) his
knowledge or suspicion of the matters referred to in subsection (1)
(a), (b) or (c); or (b) any information or other matter on which that
knowledge or suspicion is based, the disclosure shall not be treated
as a breach of any restriction upon the disclosure imposed by law,
contract or rules of professional conduct and he shall not be liable
for any loss arising out of the disclosure or any act or omission in
consequence of the disclosure.”
34
Id. s. 39(1).
35
Ali Shipping, supra note 2, at 327; Emmott, supra note 2, para.
107.
36
See, e.g., Robert Merkin, Arbitration Law para. 17.32 (4th ed.
2008), where Merkin expresses the view that: “[i]t has nevertheless
been doubted whether these exceptions actually exist, in that the
cases in which disclosure has been permitted following an order or
permission of the court rest upon either the need to protect a party's
legitimate interest or the interests of justice.”
37
Emmott, supra note 2, para. 124.
38
Id. para. 87.
39
AEGIS, supra note 2.
40
Id. para. 15.
41
Ali Shipping, supra note 2, at 327.
42
Id. See also Glidepath B.V. v. Thompson (No. 2), [2005] 2 Lloyd's
Rep. 549 (Q.B. (Comm. Ct.)), in which the court held that a non-
party to an arbitration agreement who applies for access to
arbitration-related documents on a court file must show that access
to the arbitration-related documents is (a) reasonably necessary to
protect or establish the legal rights of the third party, or (b) in the
interests of justice.
43
Id.
44
Emmott, supra note 2, para. 132(iii). Collins, L.J. expressed the
same view at para. 107: “where it is reasonably necessary for the
protection of the legitimate interests of an arbitrating party.”
40
45
London & Leeds, supra note 21.
46
Id.
47
Id. at 109.
48
49
Ali Shipping, supra note 2, at 327–28.
50
51
Pharaon v. Bank of Credit and Commerce International S.A. (in
liq.), [1998] 4 All E.R. 455, per Rattee, J.
52
Ali Shipping, supra note 2, at 326–27.
53
AEGIS, supra note 2, at 1050.
54
Departmental Advisory Committee on Arbitration Law, Report on
the Arbitration Bill ch. 2, para. 17 (February 1996).
55
The previous s. 14 of the New Zealand Arbitration Act 1996 read
as follows: “14. Disclosure of information relating to arbitral
proceedings and awards prohibited (1) Subject to subsection (2), an
arbitration agreement, unless otherwise agreed by the parties, is
deemed to provide that the parties shall not publish, disclose or
communicate any information relating to arbitral proceedings under
the agreement or to an award made in those proceedings. (2)
Nothing in subsection (1) prevents the publication, disclosure, or
communication of information referred to in that subsection: (a) If the
publication, disclosure, or communication is contemplated by this
Act; or (b) To a professional or other adviser of any of the parties.”
56
New Zealand Law Commission, Improving the Arbitration Act
1996 (Report 83, February 2003).
57
Id. para. 5.
58
See Dr. Peter Binder, International Commercial Arbitration and
Conciliation in UNCITRAL Model Law Jurisdictions para. 11-005 (2d
ed. 2005) (“The case, decided by the High Court of Australia, of
Esso v. Plowman sparked the international discussion on whether
the requirement of confidentiality of the arbitral proceedings was
adequately protected. The only international text to refer to the issue
are the UNCITRAL Arbitration Rules; the Model Law does not deal
with the issue and only few national laws make provision for
protecting confidentiality of the proceedings. Parties to international
commercial arbitration were becoming ‘increasingly concerned over
the absence of any rules in respect of confidentiality,’ and further
study of the issues was thought to be a good idea. However, despite
the Secretariat suggesting a solution in the form of a model
legislative provision, the delegates, although holding UNCITRAL to
be the right body for attending to this issue, saw only a small
likelihood of ‘achieving anything more than a rule to the effect that
“arbitration is confidential except where disclosure is required by
law.”’ Accordingly, the topic was at first accorded low priority by the
commission, the Working Group however later expressed more
interest here.”). See also Report of the United Nations Commission
on International Trade Law on the Work of its Thirty-second
Session, para. 359 U.N. Doc. A/54/17 (May 17–June 4, 1999),
(“Some support was given to the topic [of confidentiality] as one of
41
priority. In support of that view, it was explained that parties involved

in arbitral proceedings were becoming increasingly concerned over
the absence of any rules in respect of confidentiality. It was felt that
it would be useful to study the issues, which were becoming
increasingly difficult and thorny. Another view was that, although the
topic would merit study, it was not one that should be given high
priority by the Commission, because of the absence of any viable
solutions. It seemed to some that there was little likelihood of
achieving anything more than a rule to the effect that ‘arbitration is
confidential except where disclosure is required by law’. The
prevailing view was that, albeit interesting, the topic was not of high
priority.”); and Report of the Working Group on Arbitration on the
Work of its Thirty-second Session, para. 112 U.N. Doc. A/CN.9/468
(March 20–31, 2000), in which interest in “the duty of confidentiality,
with regard to both arbitration and conciliation” was expressed by
the Working Group.
59
UNCITRAL Arbitration Rules, art. 32(5).
60
UNCITRAL Notes for Organizing Arbitral Proceedings, para. 31.
61
Hong Kong Arbitration Ordinance (Cap. 341), s. 2D reads as
follows: “Proceedings under this Ordinance in the Court or Court of
Appeal shall on the application of any party to the proceedings be
heard otherwise than in open court.”
62
page "629" Hong Kong Arbitration Ordinance (Cap. 341), s.
2E reads as follows: “2E. Restrictions on reporting of proceedings
heard otherwise than in open court (1) This section applies to
proceedings under this Ordinance in the Court or Court of Appeal
heard otherwise than in open court. (2) A court in which proceedings
to which this section applies are being heard shall, on the
application of any party to the proceedings, give directions as to
what information, if any, relating to the proceedings may be
published. (3) A court shall not give a direction under subsection (2)
permitting information to be published unless: (a) all parties to the
proceedings agree that such information may be published; or (b)
the court is satisfied that the information, if published in accordance
with such directions as it may give, would not reveal any matter,
including the identity of any party to the proceedings, that any party
to the proceedings reasonably wishes to remain confidential. (4)
Notwithstanding subsection (3), where a court gives a judgment in
respect of proceedings to which this section applies and considers
that judgment to be of major legal interest, it shall direct that reports
of the judgment may be published in law reports and professional
publications but, if any party to the proceedings reasonably wishes
to conceal any matter, including the fact that he was such a party,
the court shal: (a) give directions as to the action that shall be taken
to conceal that matter in those reports; and (b) if it considers that a
report published in accordance with directions given under
paragraph (a) would be likely to reveal that matter, direct that no
report shall be published until after the end of such period, not
exceeding 10 years, as it considers appropriate.”
63
Hong Kong draft Arbitration Bill, cl. 16(1) reads as follows:
“Proceedings under this Ordinance in the court shall, subject to
subsection (2), be heard in open court.”
42
64
Hong Kong draft Arbitration Bill, cl. 17(5) and (6) are not in the
current s. 2E of the Arbitration Ordinance, and read as follows: “(5)
Where a court directs under subsection (4) that reports of a
judgment may be published, but any party reasonably wishes to
conceal any matter in those reports (including the fact that he was
such a party), the court shall: (a) make a direction as to the action to
be taken to conceal that matter in those reports; and (b) if it
considers that a report published in accordance with the direction
made under paragraph (a) would still be likely to reveal that matter,
direct that no report is to be published until after the end of such
period as it may direct, not exceeding 10 years. (6) A direction of the
court under this section shall be subject to no appeal.”
65
Hong Kong draft Arbitration Bill, cl. 18 reads as follows: “18.
Disclosure of information relating to arbitral proceedings and awards
prohibited (1) Unless otherwise agreed by the parties, a party shall
not publish, disclose or communicate any information relating to: (a)
the arbitral proceedings under the arbitration agreement; or (b) an
award made in those proceedings. (2) Nothing in subsection (1)
prevents the publication, disclosure or communication of information
referred to in that subsection by a party: (a) if the publication,
disclosure or communication is contemplated by this Ordinance; (b)
if the publication, disclosure or communication is made to any
government body, regulatory body, court or tribunal and the party is
obliged by law to make such publication, disclosure or
communication; or (c) if the publication, disclosure or communication
is made to a professional or any other adviser of any of the parties.”
66
Cf. New Zealand Arbitration Act 1996 (with effect from October
18, 2007), s. 14F(2), which provides that the court may order a
hearing to be heard in camera “only if the court is satisfied that the
public interest in having the proceedings conducted in public is
outweighed by the interests of any party to the proceedings in
having the whole or any part of the proceedings conducted in
private.”
67
See, e.g., Television New Zealand Ltd., supra note 25.
68
Art. 18 of Schedule 1 to the New Zealand Arbitration Act 1996 on
the equal treatment of parties is the same as art. 18 of the
UNCITRAL Model Law and reads: “The parties shall be treated with
equality and each party shall be given a full opportunity of
presenting his case.”
69
IAA, s. 22 reads as follows: “Proceedings under this Act in any
court shall, on the application of any party to the proceedings, be
heard otherwise than in open court.”
70
IAA, s. 23 reads as follows: “(1) This section shall apply to
proceedings under this Act in any court heard otherwise than in
open court. (2) A court hearing any proceedings to which this
section applies shall, on the application of any party to the
proceedings, give directions as to whether any and, if so, what
information relating to the proceedings may be published. (3) A court
shall not give a direction under subsection (2) permitting information
to be published unless: (a) all parties to the proceedings agree that
such information may be published; or (b) the court is satisfied that
43
the information, if published in accordance with such directions as it

may give, would not reveal any matter, including the identity of any
party to the proceedings, that any party to the proceedings
reasonably wishes to remain confidential. (4) Notwithstanding
subsection (3), where a court gives grounds of decision for a
judgment in respect of proceedings to which this section applies and
considers that judgment to be of major legal interest, the court shall
direct that reports of the judgment may be published in law reports
and professional publications but, if any party to the proceedings
reasonably wishes to conceal any matter, including the fact that he
was such a party, the court shall: (a) give directions as to the action
that shall be taken to conceal that matter in those reports; and (b) if
it considers that a report published in accordance with directions
given under paragraph (a) would be likely to reveal that matter,
direct that no report shall be published until after the end of such
period, not exceeding 10 years, as it considers appropriate.”
71
See, e.g., VV v. VW, [2008] 2 S.L.R. 929 (H.C.).
72
See, e.g., International Coal Pte. Ltd. v. Kristle Trading Ltd.,
[2009] 1 S.L.R. 945 (H.C.).
73
[1995] 128 A.L.R. 391 (H.C.A.).
74
Id. at 401.
75
Case T-1881-99.
76
United States v. Panhandle Eastern Corp. et al., 118 F.R.D. 346
(D. Del. 1988). See also Contship Containerlines, Ltd. v. PPG
Industries, Inc., 2003 U.S. Dist. LEXIS 6857 (U.S. District Court for
the Southern District of New York). Cf. Derrick Walker v. Craig Kirin
Gore, 2008 U.S. Dist. LEXIS 84297 (U.S. District Court for the
Southern District of Indiana, Indianapolis Division), in which the
court held that the court file relating to the action between the parties
for breach of contract and tort was to remain under seal pending the
decision of the court on whether or not to compel arbitration, as the
parties had agreed to arbitration on the basis that the terms of their
agreements (which contained provisions imposing confidentiality)
remained confidential.
77
DIFC Arbitration Law (DIFC Law No. 1 of 2008), s. 14 reads as
follows: “Unless otherwise agreed by the parties, all information
relating to the arbitral proceedings shall be kept confidential, except
where disclosure is required by an order of the DIFC Court.”
78
Michael Hwang S.C. & Lee May Ling, Confidentiality in
Arbitration: The Criteria Adopted by Institutions, Singapore Institute
of Arbitrators Newsletter 3–7 (No. 2, 2005).
79
ICC Rules of Arbitration, art. 20(7).
80
ICSID Rules, rule 6.
81
See also ICSID Convention, art. 48(5), which requires consent of
parties for publication of the award.
82
ICSID Rules, rule 48(4).
83
ICSID Administrative and Financial Regulations, reg. 22.
84
See, e.g., <www.investmentclaims.com> for awards.
44
85
See, e.g., WIPO Arbitration Rules, arts. 73–76.
86
SIAC Rules (3d ed. 2007), rule 34 reads as follows: “34.
Confidentiality 34.1 The parties and the Tribunal shall at all times
treat all matters relating to the proceedings, and the award as
confidential. 34.2 A party or any arbitrator shall not, without the prior
written consent of all the parties, disclose to a third party any such
matter except: a. For the purpose of making an application to any
competent court of any State under the applicable law governing the
arbitration; b. For the purpose of making an application to the courts
of any State to enforce or challenge the award; c. Pursuant to the
order or a subpoena issued by a court of competent jurisdiction; d.
To a party's legal or other professional advisor for the purpose of
pursuing or enforcing a legal right or claim; e. In compliance with the
provisions of the laws of any State which is binding on the party
making the disclosure; or f. In compliance with the request or
requirement of any regulatory body or other authority. 34.3 In this
Rule, “matters relating to the proceedings” means the existence of
the proceedings, and the pleadings, evidence and other materials in
the arbitration proceedings created for the purpose of the arbitration
and all other documents produced by another party in the
proceedings or the award arising from the proceedings but excludes
any matter that is otherwise in the public domain.”
87
HKIAC Administered Arbitration Rules, rule 39 reads as follows:
“39.1 Unless the parties expressly agree in writing to the contrary,
the parties undertake to keep confidential all matters and documents
relating to the arbitral proceedings, including the existence of the
proceedings as well as all correspondence, written statements,
evidence, awards and orders not otherwise in the public domain,
save and to the extent that a disclosure may be required of a party
by a legal or regulatory duty, to protect or pursue a legal right or to
enforce or challenge an award in legal proceedings before a judicial
authority. This undertaking also applies to the arbitrators, the
tribunal-appointed experts, the secretary of the arbitral tribunal and
the HKIAC Secretariat and Council. 39.2 The deliberations of the
arbitral tribunal are confidential. 39.3 An award may be published,
whether in its entirety or in the form of excerpts or a summary, only
under the following conditions: (a) a request for publication is
addressed to the HKIAC Secretariat; (b) all references to the parties'
names are deleted; and (c) no party objects to such publication
within the time limit fixed for that purpose by the HKIAC Secretariat.
In the case of an objection, the award shall not be published.”
88
HKIAC Domestic Arbitration Rules (1993), art. 26 reads as
follows: “No information relating to the arbitration shall be disclosed
by any person without the written consent of each and every party to
the arbitration.”
89
[1995] 128 A.L.R. 391 (H.C.A.).
90
Looseleaf (2000, updated to August 2002).
45
46
Ali Shipping Corporation v Shipyard Trogir [1997] APP.L.R. 12/19
CA on appeal from the High Court (Mr Justice Clarke) before Beldam LJ; Potter LJ; Brooke LJ. 19th December 1997.
LORD JUSTICE POTTER:
INTRODUCTION
1. This is the defendants' appeal from the order of Mr Justice Clarke dated 18th September 1997 whereby he
discharged an ex parte injunction previously granted by Longmore J. on 10th September 1997 restraining the
defendants from deploying in arbitrations against three Liberian companies certain materials generated in the
course of an earlier arbitration between the plaintiffs and the defendants. The plaintiffs' inter partes application
to continue the injunction having been treated by consent as the trial of the action, the Judge dismissed the claims
of the plaintiffs and ordered them to pay the defendants' costs of the action to be taxed if not agreed. Following
judgment, the defendants undertook not to send any of the material to the arbitrators pending the hearing of this
appeal.
THE BACKGROUND
2. On 22nd December 1998, the plaintiffs ("Ali") became party, by novation, to a ship building contract between
Liera Shipping Corporation ("Liera"") and the defendants ("the Yard") by which the Yard undertook to build a
vessel referred to as Hull 202 ("the Hull 202 Agreement"). On 29th April 1988, the Yard had also entered into
other ship building contracts in respect of Hull 200 and Hull 201. These contracts were later novated in favour of
Rula Shipping Corporation ("Rula") and Irma Shipping Corporation ("Irma") respectively. Subsequently, and in any
event before 30th March 1990, the shares in the plaintiffs, Rula and Irma were all acquired by Greenwich
Holdings Limited ("Greenwich"). Greenwich also wholly owned Sea Tankers Management Co. Limited ("Sea
Tankers") who acted as agents and managers on behalf of Rula, Irma and Ali.
3. On 30th March 1990 Addendum No. 1 was agreed to the contracts for Hull Nos. 200, 201 and 202 which
contained various provisions including an increase in the contract price of each vessel from $20,900,000 to
$21,900,000.
4. Article 2 of Addendum No. 1 provided that Sea Tankers "on behalf of Company(ies) to be nominated have agreed
to enter into contracts for 3 x 333,800/43,000 MTDW". Article 3 provided that all details and conditions were to
remain "strictly private and confidential" and Article 4 provided that all other provisions in the Hull 202 agreement
were to remain "in full force and effect". The three contracts anticipated were subsequently entered into on 15th
April 1990 in respect of Hull Nos. 204, 205 and 206, the buyers being respectively Lavender Shipping Limited
("Lavender"), Leeward Shipping Limited, ("Leeward") and Leman Navigation Inc. ("Leman"). Those companies were
also wholly owned by Greenwich. They were single purpose companies the function of which was limited to
acquiring and operating their respective hulls.
5. Each of the ship building contracts contained a London Arbitration clause and was governed by English law.
6. The Yard failed to complete Hull 202 in accordance with the Hull 202 Agreement, and Ali rescinded the contract
and claimed substantial damages. The dispute went to arbitration ("the First Arbitration") and the Sole arbitrator,
Mr Bruce Harris, on 14th April 1997 made an award ("the First Award") in favour of Ali for $21,594,391 plus
interest (amounting in all to $34,000,000) and costs.
7. In the First Arbitration, the Yard sought to defend Ali's claims for substantial damages on a variety of bases,
including the fact that Lavender, Leeward and Leman had not paid the first instalments of the price of the
contracts for Hulls 204-206. In that connection the Yard contended that its obligations to build Hull 202 had
become contractually dependent on performance of the subsequent contracts, and that the corporate veil should
be pierced and all Greenwich-owned companies treated as one to permit the Yard's plea of justification and/or
set-off in respect of its claims against Lavender, Leeward and Leman under the Hull 204-206 contracts. In a
lengthy and fully reasoned award, Mr Bruce Harris rejected the Yard's arguments. Although he was satisfied that
Lavender, Leeward and Leman were all in breach of the Hull 204-206 contracts in failing to pay the first
instalments of the contractual price, he held that, whatever the position under the contracts for Hulls 204-206, it
was irrelevant to the issue of the defendant's liability under the Hull 202 Agreement. He refused to pierce the
corporate veil, holding that the use of one-ship companies in connection with such transactions was a normal way
of doing business, and that the contractual arrangements were made by the parties deliberately observing the
separate nature of the legal personalities involved. He ruled that any claims which the Yard might have in respect
of Hulls 204-206 could not be set off against the sums due to the plaintiffs under the Hull 202 agreement.
8. The Yard made no payments in respect of the Award. Instead they reactivated three arbitrations previously
commenced against Lavender, Leeward and Leman in respect of the Hull 204-206 contracts ("the Hull 204-206
Arbitrations"). Until February 1997 when Points of Claim were served, those arbitrations had not progressed since
their commencement some 6 years before. In 1994, Lavender, Leeward and Leman had effectively gone into
liquidation. We are told that their status in Liberian law is something short of that. However, it is clear that they
are dormant save for the purpose of defending and counterclaiming in the Hull 204-206 Arbitrations. In June
1997 each served Points of Defence raising inter alia a number of matters which were the subject of investigation
and/or findings in the First Arbitration. Each Defence pleaded that it was "without prejudice to any application the
Respondent .. may make under section 13A of the Arbitration Act 1950, as amended, for an order dismissing the
claim .. on the grounds of inordinate and inexcusable delay".
9. The Yard has applied for interim awards in the Hull 204-206 Arbitrations in respect of the first instalments of the
contractual price under the respective shipbuilding contracts and for damages to be assessed in respect of the
Arbitration, Practice & Procedure Law Reports. Typeset by NADR. Crown Copyright reserved. [1997] EWCA Civ 3054 1
47
alleged repudiation of each of the contracts. In response Lavender, Leeward and Leman have stated their
intention to submit that the arbitrators have no jurisdiction to hear the Yard's claims as presently formulated,
alternatively to seek to strike out the Yard's claims for want of prosecution. We have been informed that (by an
order which is not before us) the arbitrators in the Hull 204-206 Arbitrations have ordered that, by a date now
passed but in suspense depending the outcome of this appeal, the Yard are to serve all the evidence upon which
they wish to rely in support of their application for an interim award, following which Lavender, Leeward and
Leman are to serve their evidence.
10. On 5th September, the Yard served a draft affidavit of Mr Nicholas Phillips, the Yard's solicitor (the truth of which
has since been deposed to in his absence by a colleague) which set out the documents upon which the defendants
sought to rely pursuant to the arbitrators' order. The documents included certain materials generated in the course
of the First Arbitration and which, but for the discharge by Clarke J of the original injunction granted upon 10th
September by Longmore J, the Yard would be prevented from producing to the arbitrators, namely:
(1) The Award (including Reasons) of Mr Harris in the First Arbitration.
(2) The written opening submissions of Ali in the First Arbitration.
(3) Transcripts of the oral evidence given by certain witnesses for Ali in the First Arbitration: Mr Maehle and
Captain Hoem.
11. The Yard state that they wish to rely upon those documents (collectively referred to as "The Phillips material") as
evidence in order to rebut various contentions being advanced for Lavender, Leeward and Leman in the Hull 204-
206 Arbitrations, and to rely upon the reasons of Mr Harris in support of a plea of issue estoppel which the Yard
proposes to advance in the Hull 204-206 Arbitrations.
12. Upon learning of these intentions, Ali's solicitors, who also act for Lavender, Leeward and Leman in the Hull 204-
206 Arbitrations, sought and obtained the ex parte injunction from Longmore J on the basis that use of the
material would amount to breach of the Yard's implied obligation of confidentiality in respect of the First
Arbitration.
THE RELEVANCE OF THE FIRST ARBITRATION MATERIAL
13. In the outline of issues contained in his award in the First Arbitration, Mr Bruce Harris listed, inter alia at
paragraph 14(B), certain questions which I shall set out below, together (in square brackets) with the answers
provided at paragraph 98:
"(a) Did Ali contract as purchaser of Hulls 204-206? [No]
(b) Did Ali agree (or is Ali estopped from denying that it agreed) to be jointly or severally liable for sums payable
under the contracts for Hulls 204-206?..[No]
(c) Did Ali agree (or is Ali estopped from denying) that the Yard's obligation to build Hull 202 was conditional upon
either
(i) Performance of the buyer's obligations under the contracts for Hulls 204-206? or
(ii) Payment of the first instalments under the contracts for Hulls 204-206? [No]
(d)(i) Are there grounds for lifting Ali's corporate veil? [Does not arise]
(ii) If so, what are the consequences? [Does not arise]"
And at 14 F:
"(i) Was there a stoppage of work in July 1992 without justification' per clause XVI(b)? [Yes]
(ii) Was it justified:
(a) By non-payments under contract for Hulls 204-206? [No]"
14. In relation to those issues Mr Harris heard evidence and submissions from both parties to the extent that they
thought it necessary or relevant in relation to the contentions of Ali that Lavender, Leeward and Leman were
justified in withholding payment under the contracts for Hulls 204-206. The relevant evidence for Ali was given by
Mr Maehle, a shipping broker, and Captain Hoem, Seatankers' fleet manager. In relation to the question of
whether or not it was appropriate to pierce the corporate veil when dealing with matters of set off, Mr Harris
found that Ali, Lavender, Leeward and Leman, and various other companies, including the management company,
Seatankers, were 100% owned by Greenwich and that Mr Frederiksen was in turn the sole beneficial owner of
Greenwich.
15. In relation to the issues raised by the Yard concerning the failure of Lavender, Leeward and Leman to pay their
respective first instalments under the Hull 204-206 contracts, Mr Harris said as follows:
"32.... Those instalments were not paid then or at all. I do not think I need to go into why that was or may have been,
nor the excuses which were given by Seatankers (though I accept that they seem to have been without any merit):
probably all I need to find for the purposes of this arbitration is that the first instalments were never paid.
49...... I should perhaps deal briefly with the failure to pay the relevant instalments. On the evidence before me it
appeared clear that those representing the buyers of Hulls 204-206 clearly considered that the contracts for those
ships had become fully binding and indeed I consider that they had. It also appeared clear that the excuses raised
on behalf of those buyers for not paying the first instalments under those contracts were bad and that the failures
to pay those instalments amounted to breaches of contract. If - contrary to my view (para 32 above) - it is
necessary for the purpose of this case that I make findings in respect of these matters, I should be taken as having
reached conclusions according with the indications given in the previous two sentences. I appreciate, of course,
that nothing I say can bind the parties to those contracts."
48
16. The Yard wish to use those particular findings in the Award, as well as various statements and admissions
contained in the transcripts of the evidence of Mr Maehle and Captain Hoem called for Ali, in support of the
Yard's case that Lavender, Leeward and Leman have no real defence to the Yard's claims in the Hull 204-206
Arbitrations. The Yard says that the contents of those documents support its case that (1) the issue whether the
companies were in breach of the contracts for Hulls 204-206 in not paying instalments due was determined by Mr
Harris, so as to create an issue estoppel as between the Yard and the three companies, and (2) that, even if there
is no issue estoppel, the underlying material demonstrates that the three companies were indeed in breach of the
contracts for Hulls 204-206 and have no defence to the Yard's claims.
THE DECISION OF MR JUSTICE CLARKE
17. Before Clarke J, Ali relied, as it has relied in this appeal, upon the decision of this Court in Dolling-Baker-v-
Merrett [1990] 1 WLR 1205 and in particular the passage in the judgment of Parker LJ at 1213D to the
following effect:
"As between parties to an arbitration, although the proceedings are consensual and may thus be regarded as wholly
voluntary, their very nature is such that there must .. be some implied obligation on both parties not to disclose or use
for any other purpose any documents prepared for and used in the arbitration, or disclosed or produced in the course
of the arbitration, or transcripts or notes of the evidence in the arbitration or the award, and indeed not to disclose in
any other way what evidence had been given by any witnesses in an arbitration, save with the consent of the other
party, or pursuant to an order or leave of the Court. The qualification is necessary, just as it is in the case of the
implied obligation of secrecy between banker and customer ...
...that the obligation exists in some form appears to me to be abundantly apparent. It is not a question of immunity or
public interest. It is a question of an implied obligation arising out of the arbitration itself. When a question arises as
to production of documents or indeed discovery by list or affidavit, the Court must .. have regard to the existence of
the implied obligation, whatever its precise limits may be. If it is satisfied that, despite the implied obligation,
disclosure and inspection is necessary for a fair disposal of the action, that consideration must prevail. But in reaching
a conclusion, the court should consider, amongst other things, whether there are other and possibly less costly ways of
obtaining the information which is sought which do not involve any breach of the implied undertaking."
18. Ali also relied upon the recognition and development of that principle in Hassneh Insurance Co.-v-Stewart J.
Mew [1993] Lloyds' Rep 243 and Insurance Co.-v-Lloyds' Syndicate [1995] Lloyds Rep 272, in which Colman J
considered the limitations or exceptions to the principle. In particular, in Hassneh he held that an exception arose:
"If it is reasonably necessary for the establishment or protection of an arbitrating parties' legal rights vis-a-vis a third
party... that the award should be disclosed to that third party in order to found a defence or as the basis for a cause
of action..." (see p.249)
19. Colman J. derived that exception from the parallel of the banker's duty of confidence to his customer referred to
by Parker LJ in the passage earlier quoted from Dolling-Baker. In the Insurance Co. case, Colman J went
somewhat further and held that the test of "reasonable necessity" applied only to disclosure where it was
"unavoidably necessary" (p. 275); this led him to conclude (at p. 276) that "It is sufficiently necessary to disclose an
arbitration award to enforce or protect the legal rights of a party to an arbitration agreement only if the right in
question cannot be enforced or protected unless the award and reasons are disclosed to a stranger to the arbitration
agreement. The making of the award must therefore be a necessary element in the establishment of the party's legal
rights against the stranger. This is the furthest boundary to the qualification which business efficacy will support."
20. Finally, reliance was placed by Ali upon the decision of Mance J in London & Leeds Estates Ltd-v-Paribas (No.2)
[1995] 2 E.G. 134, where the confidentiality of witness statements in arbitrations was strongly asserted in a case
in which production of such statements under subpoena in subsequent court proceedings was nonetheless ordered
"in the public interest".
21. Before Clarke J, the stance of the Yard was to recognise that the material generated in a commercial arbitration
was covered by a duty or implied obligation of confidentiality, subject to the right of the Yard to argue before a
higher court that English law should follow the approach of the High Court of Australia in Esso Australia Resources
Ltd and Others-v-Plowman (Minister for Energy and Minerals) and Others [1995] 183 CLR 10, in which the majority
of the High Court rejected the English judicial view that a general duty of confidence exists, albeit subject to
limited exceptions and qualifications.
22. The Yard nonetheless argued that, in English law, the doctrine of confidentiality only applies in respect of "third
party strangers" to the arbitration and should not be applicable in a case such as the present where disclosure
was proposed to be made to and/or used against an entity which, in reality, was not a stranger but in the same
beneficial ownership as the other party to the arbitration.
23. The Yard also asserted that, even if disclosure in the Hull 204-206 Arbitrations might otherwise constitute a
breach of a duty of confidentiality owed to Ali, the circumstances of the case fell within a recognised exception to
such duty because disclosure was reasonably necessary for the protection of the Yard's rights against a third
party. Finally, it was argued that the circumstances of the case fell within a further exception to the rule of
confidentiality, namely public policy and/or that the facts were such that the case was not an appropriate one for
injunctive relief.
24. In dealing with the above submissions, Clarke J referred to the judgments of Colman J in the Hassneh case and the
Insurance Co. as having based the obligation of confidence, as well as the exceptions to it, upon a term of the
49
arbitration contract necessarily to be implied on grounds of business efficacy, or, to put it another way, "to make
the contract work". Having referred to the Yard's arguments, which included the submission that on the particular
facts of the case there was no basis for implying a term into the arbitration agreement between the Yard and Ali
to prevent disclosure of the documents to Lavender, Leeward or Leman, or to arbitrators appointed between the
yard and any of them, Clarke J said: "He [Mr Flaux] submits that in all the circumstances of this case the implication
of such a term would make no commercial sense. Alternatively, he submits that it would not be a breach of any
obligation of confidentiality for the yard to disclose such documents in an arbitration with Lavender, Leeward or
Leman.
None of the cases to which I was referred was concerned with a case of this kind. Whether and what term of
confidentiality should be implied into the arbitration agreement in any particular contract cannot be answered by
saying that a particular term is always to be implied whatever the circumstances. Whether the particular term should
be implied in a particular case will, in my judgment, depend upon the circumstances of that case, since the question is
whether it is necessary to imply such a term to give business efficacy to the particular contract. Put another way, if the
officious bystander were asked whether such a term would be implied he would answer the question by reference to
the circumstances surrounding the particular contract."
25. The Judge then turned to consider the full circumstances of the case. He referred to the fact that at the time of the
negotiation of the Addendum, which he regarded as the material time, all the negotiations took place between
Seatankers and the Yard in a context where, although each buyer was to be a separate legal entity, the
negotiations concerning the contracts for Hulls 200-202 were concluded at the same time and by the same
persons as those for Hulls 204-206, it being a matter of indifference which particular companies should be the
buyers of which hulls. As the Judge put it:
"No distinction was drawn at that time between documents in the possession or custody or power of each of the
shipping companies. They were all in the custody and possession of Seatankers. There is no evidence that the owning
companies had separate personnel. All their operations were carried out by Seatankers, no doubt on the instructions
of Mr Frederiksen. While it was no doubt intended that the liability of each buyer should be separate under each
shipbuilding contract, no-one could or, in my judgment, would have supposed, as at March 1990, that a statement
made by a representative of Seatankers for the purpose of the subsequent arbitration between the yard and Ali
should be confidential to Ali and not available to the other buyers. If any of the interested parties, including Mr
Frederiksen, Seatankers, any of the buying companies or the Yard, or indeed the officious bystander had been asked
in March 1990 whether Lavender, Leeward or Leman were entitled to see a statement made by Captain Hoem of
Seatankers or by Mr Maehle of the brokers relating to the negotiations with the yard in March 1990, which was
relevant to the negotiations leading both to the addendum to the existing contracts for Hulls 200-202 and to the new
contracts for Hulls 204-206, they would be likely to have regarded it as a silly question. But, if they had been
pressed for an answer, they would all have said "Of course". They would not, in my judgement, have said "Of course
not" because it would lead to a practically absurd result and make no commercial sense.....
If Ali's arguments were correct and if, say, Lavender (or more likely Seatankers on behalf of Lavender) unreasonably
insisted on a separate arbitration hearing from that in which, say, Leeward was a party, the evidence adduced in the
Lavender Arbitration could not be used in the Leeward Arbitration even though identical issues were involved and each
party was being directed by the same individuals. Any implied term which led to that result would, in my view, be
neither necessary nor indeed reasonable.
Equally, in my judgment it is not necessary to imply a term into the arbitration agreement between Ali and the yard
that it would be a breach of the duty of the yard to disclose such documents to the buyers of Hulls 204-206 in
circumstances where, as the Points of Defence show, both negotiations and the contracts were closely bound up
together and where, as I have stated more than once, all the companies were effectively in sole beneficial ownership
of and under the control of one man. It follows in my judgment that no term can be implied preventing disclosure by
the Yard to arbitrators in a dispute with those buyers. If Ali could disclose the documents to the other buyers (as in my
judgment it could), I can see no reason why the yard should not disclose the same documents to arbitrators in a
dispute with those buyers"
26. Finally, the Judge stated that he did not consider his conclusion was in any way inconsistent with the reasoning or
conclusions of Colman J or the Court of Appeal in the cases already referred to. He said that a term should
certainly be implied into all the contracts imposing a duty of confidence on the Yard and the respective buyers
sufficient to ensure that documents disclosed in any of the arbitrations should not be disclosed to "third parties", in
the sense of anyone other than the respective buyers or the arbitrators in the arbitration and stated that, to imply
or give effect to the obligation of confidence so limited, was in his view consistent with common sense and
commercial and business reality.
THE ARGUMENTS IN THIS COURT.
27. In pursuing this appeal, Mr Kentridge QC on behalf of Ali has, perhaps unsurprisingly, not sought to enter upon
the merits of his client's position in relation to confidentiality as adumbrated by the Judge. He does not dispute
that Ali, Lavender, Leeward and Leman are all part of the same shipping stable, administered by the same
management company under the same corporate umbrella of 100% ownership by Greenwich and that all are
"one-ship" Liberian companies, the raison d'etre of which is simply the pursuit of a claim (in the case of Ali) and
the defence of a claim (in the case of the others), all through the evidence of the same personnel and the services
of the same solicitor. It is not suggested that there is, or can be, any prejudice to Ali in any sense beyond the fact
50
that the arbitrators will be made aware of the Phillips' material, they in turn becoming bound by obligations of
confidentiality not to disclose the existence or contents of the documents outside the confines of the arbitration.
28. Mr Kentridge takes his stand on a matter of principle. He argues first (and to this extent Ali's position has moved
on since the hearing below) that the implied term of confidence in relation to arbitration proceedings attaches as
a matter of law rather than as a matter of business efficacy in all the circumstances of the case. He submits that
the Phillips' material is plainly material in respect of which the Yard are under an obligation of confidence to Ali
arising out of the First Arbitration not to disclose material outside the confines of that arbitration, subject only to
exceptions which, in his submission, do not apply in this case. Mr Kentridge further submits that it is not necessary
to show prejudice when, as here, the object of the injunction sought is to restrain breach of a negative obligation
and he justifies the grant of the relief on the basis of a 'quia timet' order against the threat of a knowing breach
of a confidential obligation. He also attacks the position of the Yard as being one whereby the Yard, having
failed in the First Arbitration, nonetheless seeks to obtain assistance from the award of the arbitrator while
refusing to honour it by payment.
29. The position of the Yard is as follows:
(1) It accepts for the purposes of this appeal that, in what it calls "the ordinary case" of a commercial arbitration,
there is a duty of confidentiality not to disclose the evidence, Award or Reasons to a third party stranger,
although it reserves the right to argue before the House of Lords, should the matter not end in this court, that
the approach of the English cases to which I have referred is not correct and that the approach of Mason CJ
and the majority in the Esso Australia case is to be preferred.
(2) It seeks to support the Judge's approach to the implied term of confidentiality on the basis of the "officious
bystander" test i.e. as a matter of business efficacy, its nature and extent being variable according to the
circumstances of the particular case.
(3) Alternatively, if the approach of the Judge was wrong and the implied term attaches as a matter of law
rather than business efficacy, then nonetheless the Judge's decision is to be supported on the basis that no
breach of confidentiality is involved when the parties to whom disclosure is contemplated are not in any real
sense "third party strangers" but are in the same beneficial ownership and management as the complaining
party.
(4) In any event, disclosure and/or use of the Phillips' materials is 'reasonably necessary' for the protection or
enforcement of the Yard's rights in pursuit of its claims against Leeward, Lavender and Leman and hence
within the exception recognised in Hassneh and the Insurance Co case. In particular, without being able to
deploy the Phillips' materials:
(i) The Yard would be unable to pursue its allegation of issue estoppel and abuse of process before the
arbitrators.
(ii) It would be hindered in demonstrating that the purported defences raised in the current arbitrations are
without merit and thus would be prevented from complying with the order of the arbitrator to produce at
this stage all the Yard's evidence relied upon in support of its application for an interim award;
(iii) It would be hindered in defending the application to dismiss for want of prosecution.
In this connection, it is submitted that, in relation to the Yard's intention to use the disputed materials to
advance those matters before the arbitrators, it is not for the court to determine whether the Yard's case in
relation to those matters is well founded, thereby usurping the role of the Arbitrators.
(5) It would be contrary to the public interest to permit Ali to suppress evidence given in the First Arbitration by
the very persons whose evidence will be relied on in the current arbitrations when any material alterations in
their testimony should be before the arbitrators in their truth-seeking exercise.
(6) Finally, it is said that Ali, as a single purpose, no-ship company in the same beneficial ownership as the
respondents, has no legitimate interest in restraining the disclosure of the disputed material and that the court
should, in its discretion, deny injunctive relief.
30. I shall deal with the Yard's submissions in order.
THE NATURE OF THE IMPLIED TERM.
31. I deal under this heading with the Yard's submissions (1) and (2).
32. As Leggatt J stated in "The Eastern Saga" [1984] 2 Lloyds Rep. 373 at 379 the privacy of arbitrations is a
concept that "derives simply from the fact that the parties have agreed to submit to arbitration particular disputes
arising between them and only between them". It is implicit in this, as he held in that case, that strangers shall be
excluded from the hearing and conduct of the arbitration and that neither the tribunal nor any of the parties can
insist that the dispute should be heard or determined concurrently with or even in consonance with another dispute,
however convenient that course may be to the parties seeking it and however closely associated the disputes in
question may be. In Dolling-Baker, shortly before the passage which I have already quoted, Parker LJ (at
p.1213E) referred to "the essentially private nature of an arbitration" which he coupled with the implied obligation
of a party who obtains documents on discovery not to use them for any purpose other than the dispute in which
they were obtained, in order to arrive at his decision in that case. Thus, the principle which he propounded did not
depend upon any inherent confidentiality in the material protected (which he expressly rejected), although the
implied obligation arising was broadly similar in effect. So far as the juridical nature of that implied term is
51
concerned, while I note that in Hassneh (at p.246) Colman J remarked that "the implication of the term must be
based on custom or business efficacy"
33. I consider that the implied term ought properly to be regarded as attaching as a matter of law. It seems to me
that, in holding as a matter of principle that the obligation of confidentiality (whatever its precise limits) arises as
an essential corollary of the privacy of arbitration proceedings, the Court is propounding a term which arises "as
the nature of the contract itself implicitly requires": see per Lord Wilberforce in Liverpool City Council-v-Irwin
[1977] AC 239 at 254 and Lister-v-Romford Ice & Cold Storage Co. Ltd [1957] AC 555 per Viscount Simonds at
576-577. As Lord Bridge observed in Scally-v-Southern Health Board [1992] 1AC 294 at 307, a clear distinction
is to be drawn "between the search for an implied term necessary to give business efficacy to a particular contract
and the search, based on wider considerations, for a term which the law will necessarily imply as a necessary incident
of a definable category of contractual relationship".
34. In my view an arbitration clause is a good example of the latter type of implied term.
35. The distinction referred to by Lord Bridge in Scally is of some practical consequence in this case. That is because
considerations of business efficacy, particularly when based notionally upon the "officious bystander" test, are
likely to involve a detailed examination of the circumstances existing at the time of the relevant contract, (in this
case the original agreement to arbitrate), whereas the parties have indicated their presumed intention simply by
entering into a contract to which the court attributes particular characteristics. While acknowledging that the
boundaries of the obligation of confidence which thereby arise have yet to be delineated (c.f. Hyundai
Engineering & Construction Co Ltd -v- Active Building & Civil Construction Ltd (C.A. Transcript, 9th March 1994 per
Phillips J), the manner in which that may best be achieved is by formulating exceptions of broad application to be
applied in individual cases, rather than by seeking to reconsider, and if necessary adapt, the general rule on
each occasion in the light of the particular circumstances and presumed intentions of the parties at the time of their
original agreement.
36. As to those exceptions, it seems to me that, on the basis of present decisions, English law has recognised the
following exceptions to the broad rule of confidentiality. (i) Consent i.e. where disclosure is made with the express
or implied consent of the party who originally produced the material; (ii) order of the Court, an obvious example
of which is an order for disclosure of documents generated by an arbitration for the purposes of a later court
action; (iii) leave of the court. It is the practical scope of this exception i.e. the grounds on which such leave will be
granted, which gives rise to difficulty. However, on the analogy of the implied obligation of secrecy between
banker and customer, leave will be given in respect of (iv) disclosure when, and to the extent to which, it is
reasonably necessary for the protection of the legitimate interests of an arbitrating party. In this context, that
means reasonably necessary for the establishment or protection of an arbitrating party's legal rights vis-a-vis a
third party in order to found a cause of action against that third party or to defend a claim (or counterclaim)
brought by the third party (see Hassleh).
37. In that connection, I make two particular observations. Although to date this exception has been held applicable
only to disclosure of an Award, it is clear (and indeed the parties do not dispute) that the principle covers also
pleadings, written submissions, and the proofs of witnesses as well as transcripts and notes of the evidence given
in the arbitration (see Dolling-Baker). Second, I do not think it is helpful or desirable to seek to confine the
exception more narrowly than one of ' reasonable necessity'. While I would endorse the observations of Colman J
in the Insurance Co. case that it is not enough that an award or reasons might have a commercially persuasive
impact on the third party to whom they are disclosed, nor that their disclosure would be "merely helpful, as distinct
from necessary, for the protection of such rights,"
38. I would not detach the word 'reasonably' from the word 'necessary', as the passage just quoted appears to do.
When the concept of 'reasonable necessity' comes into play in relation to the enforcement or protection of a
party's legal rights, it seems to me to require a degree of flexibility in the Court's approach. For instance, in
reaching its decision, the Court should not require the parties seeking disclosure to prove necessity regardless of
difficulty or expense. It should approach the matter in the round, taking account of the nature and purpose of the
proceedings for which the material is required, the powers and procedures of the tribunal in which the
proceedings are being conducted, the issues to which the evidence or information sought is directed and the
practicality and expense of obtaining such evidence or information elsewhere.
39. Finally, in at least one decision, the English court has tentatively recognised a further exception (v) where the
'public interest' requires disclosure: See London & Leeds Estates Ltd-v-Paribas Ltd (Supra). In that Case, Mance J,
ruling upon the validity of a subpoena, held that a party to court proceedings was entitled to call for the proof of
an expert witness in a previous arbitration in a situation where it appeared that the views expressed by him in
that proof were at odds with his views as expressed in the court proceedings. Mance J. observed: "if a witness
were proved to have expressed himself in a materially different sense when acting for different sides, that would be a
factor which should be brought out in the interests of individual litigants involved and in the public interest".
40. It seems to me clear that, in that context, Mance J. was referring to the 'public interest' in the sense of 'the interests
of justice', namely the importance of a judicial decision being reached upon the basis of the truthful or accurate
evidence of the witnesses concerned. Whereas the issue in the Paribas case related to a matter of expert opinion
rather than objective fact, I see no reason why such a principle, which I would approve, should not equally apply
to witnesses of fact who may be demonstrated to have given a materially different version of events upon a
52
previous occasion. As a matter of terminology, I would prefer to recognise such an exception under the heading
'the interests of justice' rather than 'the public interest', in order to avoid the suggestion that use of that latter
phrase is to be read as extending to the wider issues of public interest contested in the Esso Australia case . In that
case, only the dissenting judgment of Toohey J. appears to me to treat the law of privacy and confidentiality in
relation to arbitration proceedings on lines similar to English law. While it may well fall to the English Court at a
future time to consider some further exception to the general rule of confidentiality based on wider considerations
of public interest, it is not necessary to do so in this case.
41. If I have stated the position in English Law correctly, I consider that the Yard's concession in this appeal as to the
existence of the implied term of confidentiality in commercial arbitrations is well advised. On the other hand, it
does not seem to me that the Judge's approach on the basis of the "officious bystander" test was correct. His
proper starting point would have been to assume an implied obligation of confidence, subject to proof of
circumstances apt to bring the Yard within one of the recognised exceptions, or otherwise justifying the
withholding of injunctive relief.
"THIRD PARTY STRANGERS"
42. So far as the Yard's submission (3) is concerned, I observe by way of preliminary that, to date, the confidentiality
rule has been founded fairly and squarely on the ground that the privacy of arbitration proceedings necessarily
involves an obligation not to make use of material generated in the course of the arbitration outside the four walls
of the arbitration, even when required for use in other proceedings (subject to the exceptions already discussed).
43. In considering the question of relief, the Court has not hitherto undertaken any detailed examination of the
objecting party's motives for seeking to uphold such privacy. No doubt the Court ordinarily acts on the working
assumption that, in agreeing to arbitration, each party considers that his interests will be best served by privacy
and that both parties recognise and undertake mutual obligations of confidentiality, subject only to such
exceptions as the Court may recognise. Because the doctrine rests upon the assumption that the parties have a
legitimate interest in privacy which the Court will protect, an exception based on the subsequent need to protect
the inconsistent interest of one party alone is properly formulated in terms of reasonable necessity rather than
mere convenience or advantage. Further, where exceptional circumstances are asserted, it will usually be
appropriate for the court to limit its task to establishing whether such circumstances have been made out, and not
to explore the motives of the objecting party or whether the Court considers that his interests will in fact be
prejudiced by disclosure. In the ordinary way, prejudice will be presumed and, unless excepting circumstances are
established, confidentiality will be upheld.
44. Are there good reasons why that principle should not apply or, put another way, should a further exception be
created to the confidentiality rule, simply because the parties to whom disclosure is contemplated are in the same
beneficial ownership and management as the complaining party? I do not think so. I say that for two particular
reasons. First, whatever the position in this case, it is possible to envisage a situation where, despite the feature of
common beneficial ownership between them, one entity may wish to keep private from another the details of
materials generated in an earlier arbitration. Second, where the problem arises in relation to disclosure in later
proceedings, to propound such an exception is to leave out of account that (as appears to be the position in this
case) the real interest of the objecting party is to withhold disclosure of such materials from the subsequent
decision maker. In this context the latter is the "third party stranger" in respect of disclosure to whom the objecting
party seeks protection. While such motives may not be "worthy" in the broad sense, and certainly do not assist the
course of justice, they may yet be a permissible tactic in advancing or protecting the interests of the objecting
party. The fact that the arbitrator in the subsequent proceedings will in turn be bound by duties of confidentiality
is no cure for the damage which the objecting party perceives may be caused to his interests from an adverse
decision resulting from, or influenced by, the disclosure sought to be made. Unless the stance of the objecting
party can be shown to be fraudulent or in the nature of an abuse of process, then the court should be prepared
to grant injunctive relief, subject only to proof of a recognised exception to the rule of confidentiality.
REASONABLE NECESSITY
45. Thus it seems to me that it is necessary to consider whether or not the Yard can show, as they contend under
submission (4), that use of the Phillips material is reasonably necessary for the protection or enforcement of the
Yard's rights in the Hull 204-206 Arbitrations.
46. There can be no doubt that, if the Phillips material cannot be used by the Yard, its assertion of issue estoppel and
abuse of process will not be able to be pursued before the arbitrators. However, Mr Kentridge for Ali meets that
difficulty in this way. He invites the Court to look at the Award in the First Arbitration and to hold that, by simple
application of the principles of issue estoppel, it is apparent that those allegations cannot succeed. Indeed, he
suggests that the plea of issue estoppel, which does not so far appear in the pleadings in the Hull 204-206
Arbitrations, is no more than a ruse by which to get the material before the arbitrators for the purpose of
prejudice. He points out that, for an issue estoppel to be established on the basis of the findings in the First
Arbitration, it would be necessary for the Yard to show that, (i) the very issues pleaded in the Hull 204-206
Arbitrations were decided in the First Arbitration; (ii) the parties to the First Arbitration, or their privies, were the
same persons as the parties or their privies in the Hull 204-206 Arbitrations and (iii) the decision in the First
Arbitration was a final one .
47. Mr Kentridge submits that it is plain that those requirements cannot be satisfied. He accepts that, in respect of (i),
the issue whether Lavender, Leeward and Leman were in breach of the contracts for Hulls 204-206 was raised.
53
However, he points out that it was dealt with by Mr Harris in Paragraphs 32 and 49 of his Award in the First
Arbitration only in the broadest of terms and to the extent considered necessary by the Arbitrator in relation to
Ali's obligations under the Hull 202 Agreement as amended. He goes on to submit that it is clear that (ii) cannot
be satisfied because the parties in the First Arbitration and the Hull 204-206 Arbitrations are different. Although
conceding that Ali on the one hand and Lavender, Leeward and Leman on the other are all in the common
beneficial ownership of Greenwich and have at all material times shared common managers, Mr Kentridge relies
upon the finding in the First Arbitration (which he says was plainly correct) that this is not a case where the
corporate veil can be brushed aside or the independent legal existence of the corporate entities ignored. Finally,
as to (iii), Mr Kentridge submits that the finding of Mr Harris on the question of the adequacy of the reasons why
Lavender, Leeward and Leman withheld payment was not intended, and specifically did not purport, to be a final
finding as between those three companies and the Yard.
48. In response to these points, Mr Flaux has argued first, that where a bona fide plea by way of claim or defence
has been raised in proceedings in support of which it is necessary to adduce material used in a previous
arbitration, such plea should be taken at face value as a matter required to be adjudicated before the
arbitrators; he submits that, on an application of this kind, the Court should not entertain the merits of the plea.
Second, he has argued that while, on the face of it, the parties and their privies are not the same, for the Court so
to conclude is to ignore or beg the question, which the Yard wishes to recanvass before the Hull 204-206
arbitrators, whether, in the circumstances of this case, it is right for the arbitrators to pierce the corporate veil and
to treat Lavender, Leeward and Leman as no more or other than manifestations of Greenwich or Mr Frederiksen.
49. As to Mr Flaux's first point, I would accept that, in the ordinary way on an application of this kind, the Court
should approach any averment pleaded by Counsel in an arbitration as raised bona fide and (if disputed) as
creating an issue for decision by the arbitrator. As Colman J observed in Hassneh, when considering the question
whether or not disclosure of an award to a third party was reasonably necessary for the protection of the
disclosing party's rights: "That Counsel has advised the arbitrating party of such reasonable necessity should in
practice normally be conclusive of the matter" (p249).
50. However, there may arise cases, and in my view this is one, where the plea in respect of which disclosure is sought
to be justified is essentially one of law, and the materials by which its merits can be judged are all before the
Court. In such a case, if the Court is satisfied that the plea is unsustainable and that for the arbitrators to uphold it
would be a clear error of law, then the Court is plainly in a position to rule that disclosure is not reasonably
necessary for protection of the disclosing party's rights. That seems to me to be the position here.
51. In that connection, I would first observe that Mr Flaux's submissions are not advanced in support of a plea of
estoppel set out and defined with appropriate precision and particularity in a pleading already before the
arbitrators; that at least would enable this Court to consider the precise nature and extent of the issue(s) in
respect of which an estoppel is said to arise. Instead he has asserted and sought to justify an intended plea in
general terms which have not encouraged precision of thought or argument as to its validity. Nonetheless, on the
basis of the material referred to before us, I can see no prospect of success for a future plea of issue estoppel
however formulated, given the terms in which the findings of Mr Harris were couched in the First Arbitration
Award.
52. Whether or not Mr Harris was right in his decision that the case was not one in which it was appropriate to pierce
the corporate veil (and nothing which Mr Flaux has submitted causes me to doubt the correctness of that decision),
it is quite plain that his view that the parties must be treated as separate legal entities (albeit acting through the
same, or largely the same, personnel) conditioned his whole approach to any findings which he made on the
question of the excuses advanced by Lavender, Leeward, or Leman for non-payment. In paragraph 32 of his
Award, Mr Harris appears to have regarded it as unnecessary to make any findings in that respect; moreover, in
paragraph 49, his findings that the excuses were bad were made in very general terms and subject to his
express observation that nothing he said could bind Lavender, Leeward and Leman. It does not seem to me that
findings of that kind, in the context in which they were made, can be said to satisfy the requirements of issue
estoppel in respect of the detailed defences raised in the Hull 204-206 Arbitrations. Accordingly, I am not
prepared to find that the use in evidence of the Phillips material can be justified on the basis of a proposed plea
of issue estoppel.
53. Nor, as matters presently stand, do I consider that a case of "reasonable necessity" can be made out on the basis
that the Phillips material is needed to demonstrate that the defences raised are without merit. That is plainly so in
respect of the Award in the First Arbitration which, absent any viable plea of res judicata, is strictly irrelevant to
the task of the Hull 204-206 arbitrators, which is to come to their own decision on the factual evidence placed
before them. Equally, to the extent that the Yard seeks to disclose and rely upon the evidence of Mr Maehle and
Captain Hoem as part of a "package" necessary to demonstrate issue estoppel, their use cannot be justified.
However, Mr Flaux has sought to justify the use of the transcripts on the grounds that it is plain that Mr Maehle
and Captain Hoem are the very witnesses upon whom Lavender, Leeward and Leman must rely to make out the
grounds of their defence. That being so, he says it is right that the arbitrators should have before them the
evidence of those witnesses on issues which are essentially similar to those to which they spoke in the First
Arbitration. Either, says Mr Flaux, they will give similar evidence in the Hull 202-204 Arbitrations, in which case
the arbitrators will (as Mr Harris did earlier) reject the validity of the pleas based on that evidence, or they will
54
give different evidence, in which case their earlier evidence will properly be before the Court in the interests of
justice in order to demonstrate their lack of veracity or reliability.
54. Leaving aside the question of admissibility, that argument has superficial attractions to the extent that use of the
Phillips material might well save time and expense and reduce the danger of inconsistent findings as between the
Hull 202-204 arbitrators and Mr Harris upon the various areas of dispute common to the first and later
arbitrations. However, in the absence of agreement between the parties, I do not think that convenience and good
sense are in themselves sufficient to satisfy the test of "reasonable necessity". The principle of privacy in relation to
arbitrations inevitably throws up problems of this kind, as Mr Kentridge has pointed out. He submits that it would
be wrong for this Court to permit what is essentially a pre-emptive strike by the Yard in the Hull 204-206
Arbitrations, simply on grounds of procedural convenience and evidential short-cut.
55. Mr Kentridge analyses the position of the Yard in this way. Its own claim is a straightforward one based upon
non-payment of a sum due under the express terms of the shipbuilding contracts, together with a claim for
repudiation based on letters received from the respondent renouncing the shipbuilding contracts, which
repudiation was accepted by a letter from the Yard. Such factual evidence as the Yard seeks to introduce on
background matters which relate to the negotiation and history of the contracts and the ability of the Yard to
perform the various contracts, is all evidence which will come from their own witnesses. The evidence given by Mr
Maehle and Captain Hoem for Ali at the First Arbitration is evidence which is subject to an obligation of
confidentiality unless or until a situation arises in which it appears that they are proposing to give inconsistent
evidence for Lavender, Leeward and Leman in the Hull 204-206 Arbitrations. That position has not yet arisen,
and Mr Kentridge submits there is no present reason to suppose it will do so. If the evidence they give is
consistent, then the time to demonstrate its inadequacy as a defence will be in final submissions to the arbitrator. If
the evidence given is inconsistent, then Mr Kentridge concedes that, in the interests of justice, the Yard would be
entitled to disclose and rely on the previous inconsistent statement or evidence in the Hull 204-206 Arbitrations,
but not until then.
56. I think Mr Kentridge is right. I have considerable sympathy with the position of the Yard. It wishes to obtain an
interim award in respect of payments which on the face of it are due under the terms of the Hull 204-206
shipbuilding contracts, and in relation to which a number of defences have been mounted which plainly did not
appeal to Mr Harris when he was considering them collaterally or incidentally to the issues between the Yard and
Ali in the First Arbitration. For that purpose the Yard is anxious to put the Phillips material before the Hull 202-
204 arbitrators in an attempt to obtain an interim award on a basis analogous to Order 14 proceedings for
summary judgment in the High Court, in which the plaintiff seeks to establish from statements or admissions made
by a defendant in other proceedings that his pleaded defence is either not advanced bona fide or can be
demonstrated to be without substance. However, quite apart from problems of admissibility, the Yard faces two
substantial difficulties in that attempt. First, the arbitrators do not, without the consent of the parties, have any
power equivalent to that of the High Court under Order 14. Second, the materials sought to be relied on were
generated in the course of an arbitration with a third party who is unwilling to waive confidentiality. That being
so, the ability of the Yard to make use of those materials must be governed by the principle of confidentiality
already discussed. That principle seems to me to preclude disclosure of the transcripts, at least at this stage of the
proceedings.
57. I make that proviso because the submission of Mr Flaux that the Yard will be hindered in defending any future
application by Lavender, Leeward and Leman to dismiss the claims of the Yard for want of prosecution raises
different considerations. This Court asked Mr Kentridge in the course of argument whether those three companies
were indeed intending to pursue such an application. At that point Mr Kentridge, or rather those instructing him,
retreated behind the Chinese Wall which, notionally at least, divides the interests of Ali from the interests of the
three companies upon this application; they were unable to give the Court an answer. That gives rise to an
unsatisfactory position because, should an application to strike out be made, and should it appear that Mr
Maehle and Captain Hoem are indeed the material witnesses to be called in support of the respondents' case in
the Hull 204-206 Arbitrations, it seems to me that the Yard may well be justified in disclosing and relying upon
their evidence in the First Arbitration, in order to rebut any suggestion of evidential prejudice by reason of delay.
If it were asserted that the memory of witnesses had dimmed, the quality, nature and substance of their evidence
upon the issues raised in the Hull 202-204 Arbitrations would be highly relevant. In those circumstances therefore,
it seems to me that the Yard would be likely to succeed in establishing that disclosure was reasonably necessary in
protection of its litigation interests.
58. Turning briefly to the Yard's submissions (5) and (6), these have essentially been covered in the course of dealing
with submissions (1)-(4). If it appears that Lavender, Leeward and Leman will be seeking to rely upon evidence
which is significantly at odds or inconsistent with the evidence of witnesses in the First Arbitration, then it would
indeed be contrary to the interests of justice to allow Ali to seek to suppress that earlier evidence. However, that
is not a position which has been reached or, in my view, ought to be assumed at this stage. Finally, for the reasons
already stated, I do not think it right to say that Ali has no "legitimate interest" in seeking to restrain the disclosure
of the Phillips material. While, in broad terms, the position of Ali appears to be more tactical than meritorious, it is
based upon an assertion of principle which, in my view, entitles Ali to relief.
59. That said however, it seems to me both sensible and appropriate that the injunction originally granted by
Longmore J should be made final subject to argument as to its precise wording and in particular subject to an
55
appropriate reservation or proviso to preclude the necessity for the Yard to return to the Court for exemption
from its terms in respect of the transcripts of evidence, should the respondents in the Hull 204-206 Arbitrations
make an application to dismiss the Yard's claim for want of prosecution, or should any witness for the respondents
supply statements or give evidence inconsistent in some relevant respect with evidence which he gave in the First
Arbitration. Such a proviso ought to be capable of agreement between the parties but, if not, it should be
resolved by further argument.
60. Subject to those observations, I would allow the appeal.
LORD JUSTICE BROOKE: I agree.
LORD JUSTICE BELDAM: I also agree.
(Discussion on consequential orders adjourned to a date to be fixed)
MR KENTRIDGE QC with MR T WORMINGTON (Instructed by Messrs Ince & Co, London EC3R 5EN) appeared on behalf of the Appellant
MR FLAUX QC with MR J LOCKEY (Instructed by Messrs Stephenson Harwood, London EC4M 8SH) appeared on behalf of the Respondent
56
57
HIGH COURT OF AUSTRALIA
ESSO AUSTRALIA RESOURCES LTD AND OTHERS v THE HONOURABLE
SIDNEY JAMES PLOWMAN AND OTHERS
F.C. No. 95/014
Number of pages - 30
[1995] HCA 19; (1995) 128 ALR 391
(1995) 69 ALJR 404
(1995) 183 CLR 10
Arbitration
HIGH COURT OF AUSTRALIA

MASON CJ(1), BRENNAN(2), DAWSON(3), TOOHEY(4) AND McHUGH(5) JJ
Arbitration - Agreement - Hearing in private - Implied terms Confidentiality of documents and

information disclosed - Documents produced at direction of arbitrator.
HEARING
CANBERRA, 1994, March 8, 9; April 7
7:4:1995
ORDER
Appeal dismissed with costs, except in so far as the appeal relates to declarations 6C and 6F.
Remit the matter to the Supreme Court of Victoria to reformulate declarations 6C and 6F or to
make such orders as may be appropriate in the light of the reasons of the majority.
DECISION
MASON CJ This appeal raises the important question whether an arbitrating party is under an
obligation of confidence in relation to documents and information disclosed in, and for the
purposes of, a private arbitration. The question, in the context of this case, has its genesis in two
agreements for the sale of natural gas from the Bass Strait fields to two public utilities, the Gas
and Fuel Corporation of Victoria ("GFC") and the State Electricity Commission of Victoria
("SEC"). The first agreement dated 1 January 1975 was with GFC. It was amended on three
occasions, the last occasion being by a deed dated 14 February 1986. The second agreement
dated 30 July 1981 was with SEC. It was also amended on three occasions, the last occasion
being by deed dated 3 August 1990. The other parties to the agreements, the vendors of the
natural gas, are the first and second appellants. By deed dated 1 January 1988, the second
appellant assigned its rights and obligations under the second agreement to the third appellant,
BHP Petroleum (Bass Strait) Pty. Ltd. The three appellants were described as "Esso/BHP" in the
courts below.
2. Each of the sales agreements contained a clause whereby the price payable for the gas sold
was to be adjusted by taking into account changes relating to royalties and taxes attributable to
the production or supply of gas (1).
58
3. Clause 12.8 of the GFC Sales Agreement provides, amongst other things:
"Any such increases or decreases shall be effective upon the imposition thereof. In the event of
any such increase or decrease Sellers shall provide Buyer with details of the increase or decrease
and the method and distribution of such royalties, taxes, rates, duties or levies".
Clause 19.5 of the SEC Sales Agreement was in similar terms. It specifically required the sellers
to state "the amount and date as of which such increase or decrease is effective".
4. In November 1991, the appellants sought from the two public utilities an increase in the price
of gas supplied to them since 1 July 1990, the increase being attributable, so it was claimed, to
the imposition of a new tax, the "Petroleum Resource Rent Tax", which was imposed from that
date following the abolition of a royalty previously payable by the vendor on gas produced. The
utilities refused to pay. Pursuant to arbitration clauses in the sales agreements, the appellants
referred the disputes to arbitration. It seems that the appellants did not provide the information
required by cll.12.8 and 19.5 before referring the disputes to arbitration.
5. On 1 June 1992, the predecessor of the first respondent, the Minister for Energy and Minerals,
brought an action against the appellants and the two utilities seeking a declaration "that any and
all information disclosed to (GFC) in the course of its arbitration with (the appellants) is not
subject to any obligation of confidence". The Minister sought a similar declaration in relation to
information disclosed to SEC in the course of its arbitration. By way of counterclaim, the
appellants sought declarations, based on implied terms, that each arbitration:
"is to be conducted in private and that any documents or information supplied by any of the
parties to any other party thereto in or for the purpose thereof are to be treated in confidence as
between each such party and the arbitrators and umpire except for the purpose of the arbitration".
Both GFC and SEC brought a cross-claim against the appellants seeking declarations in the same
terms as the declarations sought by the Minister.
6. At the beginning of the hearing of the action, the Minister's counsel, by leave, sought amended
declarations. The amended declarations sought in the GFC arbitration were in these terms:
"A. In respect of the arbitration between (Esso/BHP) and (GFC), a declaration that there is no
implied term of the 1975 Sales Agreement requiring that the arbitration be private in the sense
that any person not taking part in the arbitration is excluded from the hearing unless he or she has
the permission of all parties to the arbitration to be present.
7. B. In respect of the arbitration between (Esso/BHP) and (GFC), a declaration that there is no
implied term of the 1975 Sales Agreement imposing an obligation of confidentiality upon (GFC).
59
8. C. In respect of the arbitration between (Esso/BHP) and (GFC), a declaration that there is no
implied term of the 1975 Sales Agreement imposing an obligation upon (GFC) not to disclose to
third parties not party to the arbitration any of the following -
(a) pleadings, other documents, evidence and transcript;
The Minister's counsel sought similar amended declarations in the SEC arbitration.
9. On the last day of the hearing, the Minister's counsel submitted that, in the case of the GFC
arbitration, the declaration should take the following form:
"1. GFC is not restricted from disclosing to the Minister and third persons information provided
to it by Esso/BHP pursuant to their obligation under Clause 12.8 of the 1975 Sales Agreement to
provide to GFC details of the increase or decrease and the method and distribution of such
royalties, taxes, rates, duties or levies.
2. There is no express or implied term of the 1975 Sales Agreement that restricts disclosure to
the Minister and third persons of information obtained by GFC in the course of or by reason of
arbitration pursuant to the 1975 Sales Agreement.
3. GFC is not restricted from disclosing information to the Minister and third persons by reason
only that -
(a) the information was obtained by it from Esso/BHP in the course

of or by reason of arbitration pursuant to the 1975 Sales Agreement; and
(b) the information has not otherwise been published."
Likewise, the Minister's counsel sought similar declarations in relation to the SEC arbitration.
10. The claims for confidentiality arise out of the appellants' response to requests by the
Minister, GFC and SEC for details of the calculations on which the appellants' claims for price
increases are based. The appellants declined to give details unless GFC and SEC entered into
agreements that they would not disclose the information to anyone else, including the Minister,
the Executive Government and the people of Victoria. The appellants asserted that the details
sought were commercially sensitive. On the other hand, the Executive Government wants the
details and claims that, if GFC and SEC obtain them, GFC and SEC are under a statutory duty to
pass them on.
11. Clause 4(2) of the "Business and Rules" component of the Sixth Schedule to the State
Electricity Commission Act 1958 (Vict.) gave the Minister power to obtain information from
SEC. The sub-clause, which has subsequently been repealed, provided:
"For the proper conduct of his public business the Minister shall be entitled at all times to put
himself into direct communication with all officers and employes of the Commission and also to
see all documents papers and minutes which he requires either for Parliament or himself and to
60
be supplied with copies thereof, and also to avail himself of the services and assistance of any
officer or employe."
The Minister was not given a similar power in relation to GFC under the Gas and Fuel
Corporation Act 1958 (Vict.).
The proceedings at first instance

12. The primary judge (Marks J) held that, under cll.12.8 and 19.5 of the respective agreements,
the appellants were obliged to furnish details of the increases sought under those provisions. The
primary judge made an order that the details be provided to GFC and SEC respectively and
refused an application by the appellants that the furnishing of those details be stayed until the
utilities entered into a confidentiality agreement.
13. Having dealt with those aspects of the case, the primary judge then directed his attention to
questions concerning the privacy of the arbitration and confidentiality. The first question was
whether strangers could attend the arbitration hearings without the consent of the parties. The
second question was whether a party was at liberty to disclose information imparted to it in the
course of the arbitration. The third question was whether GFC and SEC were at liberty to
disclose information provided pursuant to cll.12.8 and 19.5.
14. His Honour declined to grant a declaration on the first question on the ground that there was
no issue between the parties as to whether the arbitrations were to be private. His Honour
decided the third question by refusing the declarations sought by the appellants and by making
six declarations in terms substantially similar to those sought by the Minister on the last day of
the hearing. His Honour went on to conclude "that the mere fact that parties to a dispute agree
impliedly or expressly to have it arbitrated in private does not import any legal or equitable
obligation not to disclose to third parties any information at all which may be said to have been
obtained by virtue of or in the course of the arbitration". His Honour also concluded that there
was no general legal or equitable obligation applicable to private arbitration which precluded a
party to arbitration from using information obtained in the course of it except for the purposes of
the arbitration. In this respect, his Honour considered that the court is able to protect a party
(even to an arbitration) against misuse of information which has been obtained by virtue of the
arbitration but the existence of power to restrain such misuse did not justify the making of the
grant of relief in general terms such as was sought by the appellants in the present proceedings.
15. In the result, apart from dismissing the summonses for the order for a stay with costs,
dismissing the counterclaim and making orders for the provision of the details pursuant to
cll.12.8 and 19.5, the primary judge made the six declarations sought by the Minister (referred to
in this judgment and in the courts below as declarations 6A to 6F), and ordered the appellants to
pay the costs of the Minister and the utilities of the claim, counterclaim and cross-claims.
The Appeal Division
61
16. The Appeal Division of the Supreme Court of Victoria (Brooking, Tadgell and Smith JJ)
allowed an appeal by Esso/BHP (2). The Appeal Division made an order staying, pending further
order, the proceedings commenced by GFC and SEC respectively against the appellants for the
provision of details pursuant to cll.12.8 and 19.5 respectively of the sales agreements, set aside
the orders for the provision of details pursuant to those clauses and also set aside declarations
6A, 6B, 6D and 6E, thereby leaving on foot only declarations 6C and 6F, to which I shall shortly
refer. The Appeal Division set aside the order for costs made by the primary judge and in lieu
thereof ordered that the appellants pay two- thirds of the costs, including reserved costs, of the
other parties of the action, including the counterclaim, and of the proceedings between the
defendants other than the application for a stay. The Appeal Division also ordered the appellants
to pay two-thirds of the costs of the Minister of the appeal, and one-half of the costs of the other
respondents of the appeal including, in each case, any reserved costs.
17. By majority (Brooking J, with whom Smith J agreed), the Appeal Division left the following
declarations on foot:
"6C. (GFC) is not restricted from disclosing information to the Minister and third persons by
reason only that:-

"6F. SEC is not restricted from disclosing information to the Minister and third persons by
reason only that:-
Tadgell J, who otherwise agreed with the reasons for judgment of Brooking J, considered that
declarations 6C and 6F should be set aside. Tadgell J considered that declarations should not
have been made in the absence of knowledge of the nature of the relevant information. The terms
of the two declarations did not indicate what information it was that the utilities were entitled to
disclose.
Nature of information to be disclosed by the producers for the purpose of the arbitrations
18. Although the courts below made no findings as to the nature of the information likely to be
disclosed by the producers for the purpose of the arbitrations, an affidavit by Mr Bloking,
Gippsland Gas Marketing Manager of the first appellant, gives some indication of what might be
involved. He says that Esso/BHP believe that a considerable amount of documents and
information may need to be disclosed concerning Esso/BHP's Bass Strait operations. He says,
without being exact, the following categories of information are likely to be revealed:
"Cost information relating to the production of all petroleum products. Price, volume and
revenue information relating to the sale of all petroleum products.
Accounting and financial information relating to (Esso/BHP's) accounts of the Bass Strait
62
operations.
Technical operating information relating to (Esso/BHP's) gas producing operations.
Reserves information relating to gas supplies in Bass Strait hydrocarbon reservoirs.
Marketing information relating to contract negotiations and settlements concerning (Esso/BHP)
and their customers."
19. Mr Bloking also claims that each of these categories contains numerous sub-categories, many
of which contain information of a private, confidential or commercially sensitive nature. Other
categories, he says, include proprietary technical information relating to operations of the Bass
Strait Project. Further, it is claimed that the compilation of this information in meaningful form,
at the cost of time, money and employment of expertise, has provided the producers with "a
significant competitive advantage" which would be lost if it were disclosed publicly because
comparable information on competitors would not be available to the producers.
20. We have been informed that, in the SEC arbitration, the arbitrator has directed the parties to
exchange witness statements. The GFC arbitration has not yet reached that stage.
Arguments of the parties

21. The appellants submit:
(1) that the Appeal Division was correct in holding that an arbitration agreement includes a term
implied by law that the arbitration be conducted in private in that strangers are to be excluded
from the hearing;
(2) that it is an incident of a private arbitration that a party is not entitled to disclose, otherwise
than for the purposes of the arbitration, information and documents disclosed to that party by the
opposing party for the purposes of the arbitration with which that party would not otherwise have
been supplied, unless disclosure is authorized by statute;
(3) that a duty of confidence is imposed by equity where:
(a) the information has the necessary quality of confidence about it; and
(b) the information has been imparted in circumstances importing an
obligation of confidence;
(4) that the element mentioned in 3(a) is satisfied so long as the information or documents are
not "public property and public knowledge";
(5) that the disclosure of information and documents by a party to a private arbitration to another
party for the purposes of the arbitration constitutes imparting information and documents in
circumstances importing an obligation of confidence for the purposes of the element mentioned
in 3(b);
(6) that, in conformity with (1) to (5) above, the utilities may disclose to the Minister, if
authorized by statute to do so, or for the purposes of the arbitrations, private information and
documents of the appellants disclosed in the arbitrations;
(7) that declarations 6C and 6F should be set aside on the ground that they are incomplete and
confusing, the appellants having always acknowledged that information and documents may be
63
disclosed to the Minister and third parties for the purposes of the arbitration even though the
information was obtained by GFC and SEC from the appellants in the course, or by reason, of
the arbitrations and the information had not otherwise been published.
22. The appellants now claim that they are entitled to declarations in relation to the GFC
arbitration in the following form:
1) that it is an implied term of the arbitration agreement, which is cl.23 of the 1975 Sales
Agreement, that GFC is not entitled to disclose, otherwise than for the purpose of the arbitration
pursuant to that Agreement, information and documents disclosed to GFC by the appellants for
the purposes of the arbitration with which GFC would not otherwise have been supplied unless
disclosure is authorized by statute;
(2) that GFC is bound not to disclose, otherwise than for the purposes of the arbitration pursuant
to the 1975 Sales Agreement, information and documents disclosed to GFC by the appellants for
the purposes of the arbitration with which GFC would not otherwise have been supplied unless
disclosure is authorized by statute.
Similar declarations are sought in relation to the SEC arbitration.
23. The respondents' submissions are:
(1) that a restriction upon disclosure does not follow from an obligation of privacy, assuming
such an obligation to exist;
(2) that an implied term restricting disclosure of information is not an incident of all private
arbitrations and cannot be supported on grounds of necessity, reasonableness or common sense;
(3) that no equitable obligation of confidence arises because:
(a) it is not enough to sustain such an obligation that the information is not in the public domain;
it must be secret and be important that it be kept secret;
(b) the mere fact that information is provided during an arbitration does not make it confidential;
and
(c) there is nothing to show that disclosure will cause detriment to the appellants.
Privacy of arbitration
24. The Minister contends that the true position is that it is for the arbitrator to decide whether
the hearing is to be private or not. The argument is that the question whether the hearing is to be
private or otherwise is a matter of procedure and thus falls within the arbitrator's power to decide
matters of procedure.
25. It is well settled that when parties submit their dispute to a private arbitral tribunal of their
own choice, in the absence of some manifestation of a contrary intention, they confer upon that
tribunal a discretion as to the procedure to be adopted in reaching its decision (3). No doubt the
conferral of that power upon the tribunal is incidental to the power which it is given to determine
64
the dispute submitted to the tribunal. Section 14 of the Commercial Arbitration Act 1984 (Vict.)
specifically empowers the arbitrator or umpire to:
"conduct proceedings under (the) agreement in such manner as the arbitrator or umpire thinks
fit".
That provision replaced earlier statutory provisions, the effect of which was to enable arbitrators
to give directions as to procedural matters. However, independently of statute, arbitrators had
authority to exercise that power.
26. There is no reason to doubt that an arbitrator, in the exercise of power with respect to
procedural matters, can decide who shall be present at the hearing of the arbitration (4). But that
power is not a free- standing power; it is a power to decide who is entitled to attend, having
regard to the provisions of the relevant contract.
27. Subject to any manifestation of a contrary intention arising from the provisions or the nature
of an agreement to submit a dispute to arbitration, the arbitration held pursuant to the agreement
is private in the sense that it is not open to the public. One writer has asserted that total privacy
of the proceedings is one of the advantages of arbitration (5). The arbitrator will exclude
strangers from the hearing unless the parties consent to attendance by a stranger (6). Persons
whose presence is necessary for the proper conduct of the arbitration are not strangers in the
relevant sense. Thus, persons claiming through or attending on behalf of the parties, those
assisting a party in the presentation of the case, and a shorthand writer to take notes may appear
(7). It does not matter much whether this characteristic of privacy is an ordinary incident of the
arbitration, that is, an incident of the subject-matter upon which the parties have agreed, or
whether it is an implied term of the agreement. For the most part, the authorities refer to it as an
implied term. But, for my part, I prefer to describe the private character of the hearing as
something that inheres in the subject-matter of the agreement to submit disputes to arbitration
rather than attribute that character to an implied term. That view better accords with the history
of arbitrations. In Hassneh Insurance v. Mew, Colman J said (8):
"If the parties to an English law contract refer their disputes to arbitration they are entitled to
assume at the least that the hearing will be conducted in private. That assumption arises from a
practice which has been universal in London for hundreds of years and (is), I believe,
undisputed. It is a practice which represents an important advantage of arbitration over the
Courts as a means of dispute resolution. The informality attaching to a hearing held in private
and the candour to which it may give rise is an essential ingredient of arbitration".
Confidentiality
28. As the statement just quoted makes clear, the efficacy of a private arbitration as an
expeditious and commercially attractive form of dispute resolution depends, at least in part, upon
its private nature (9). Hence the efficacy of a private arbitration will be damaged, even defeated,
if proceedings in the arbitration are made public by the disclosure of documents relating to the
arbitration. As one text writer has observed (10):
65
"There would be little point in excluding the public from an arbitration hearing if it were open to
a party to make public, for example in the press, or on television, an account of what was said or
done at the hearing. It is suggested that a party would be entitled to an injunction to restrain the
other party from such publication. And the same principle must apply to the arbitration as a
whole, including the pleadings or statements of case, expert reports or witness proofs that have
been exchanged, as well as to evidence given orally at a hearing."
29. It was on this basis that the English Court of Appeal, in Dolling-Baker v. Merrett (11),
restrained a party to an arbitration from disclosing on discovery in a subsequent action
documents relating to the arbitration. The documents consisted of documents prepared for or
used in the arbitration, transcripts and notes of evidence given and the award(12). Parker LJ
(with whom Ralph Gibson and Fox LJJ agreed), after referring to "the essentially private nature
of an arbitration", said(13):
"As between parties to an arbitration, although the proceedings are consensual and may thus be
regarded as wholly voluntary, their very nature is such that there must ... be some implied
obligation on both parties not to disclose or use for any other purpose any documents prepared
for and used in the arbitration, or disclosed or produced in the course of the arbitration, or
transcripts or notes of the evidence in the arbitration or the award, and indeed not to disclose in
any other way what evidence had been given by any witness in the arbitration, save with the
consent of the other party, or pursuant to an order or leave of the court."
Parker LJ went on to emphasize that the obligation arose out of the "nature of arbitration itself".
The fact that a document is used in an arbitration does not confer on it any confidentiality or
privilege which can be availed of in subsequent proceedings but, in considering a question as to
production of documents or discovery by list or affidavit, the court must nevertheless have
regard to the obligation. However, Parker LJ concluded that, if the court is satisfied that, despite
the implied obligation, discovery and inspection are necessary for the fair disposal of the action,
discovery and inspection must take place, though other means of achieving a similar result
should be taken into account (14).
30. On the other hand, the Minister argues that, while it is one thing to say that the hearing is
private in the sense that strangers are excluded, it is another thing to say that it is confidential
(15). The Minister points to the fact that, before Dolling-Baker, there was no decision suggesting
that an arbitration hearing was confidential as distinct from private. Further, in Australia and the
United States, there is no support in the decided cases for the existence of such an obligation of
confidence. Indeed, in the United States, the decided cases are inconsistent with the proposition
that confidentiality is a characteristic of arbitration proceedings (16) and, in Australia, there is a
decision implicitly denying the existence of an obligation of confidentiality (17). And members
of the profession with experience in the field of arbitration have expressed in this very case
conflicting views on the question whether the parties come under an obligation not to disclose
the proceedings. To that may be added the comment that, if such an obligation had formed part
of the law, one would have expected it to have been recognized and enforced by judicial decision
long before Dolling-Baker.
66
31. Moreover, it has to be acknowledged that, for various reasons, complete confidentiality of the
proceedings in an arbitration cannot be achieved. First, it is common ground between the parties
that no obligation of confidence attaches to witnesses who are therefore at liberty to disclose to
third parties what they know of the proceedings. Secondly, there are various circumstances in
which an award made in an arbitration, or the proceedings in an arbitration, may come before a
court involving disclosure to the court by a party to the arbitration and publication of the court
proceedings. Thus, by leave of the Supreme Court, an award made under an arbitration
agreement may be enforced in the same manner as a judgment or order of that Court to the same
effect (18). An award may become subject to judicial review (19). The Supreme Court may
determine a preliminary point of law arising in the arbitration (20), and may remove an arbitrator
or umpire (21). And the Court has the same power to make interlocutory orders for the purposes
of and in relation to arbitration proceedings as it has for the purposes of and in relation to
proceedings in the Court (22). Thirdly, there are other circumstances in which an arbitrating
party must be entitled to disclose to a third party the existence and details of the proceedings and
the award. An arbitrating party may be bound under a policy of insurance to disclose to the
insurer matters involved in the arbitration proceedings which are material to the risk insured
against. Likewise, an arbitrating party may be obliged to disclose the existence and nature of
arbitration proceedings as well as the award made in the proceedings because the disclosure is
necessary in order to state accurately what are the assets and liabilities of the party or to give an
indication of its future prospects. Such a disclosure may be necessary in order to comply with the
statutory requirements regulating the provision of financial information by corporations or with
stock exchange requirements or simply because a company considers that it is desirable that its
shareholders and the market should have up-to-date information concerning the company's
affairs.
32. The illustrations just given are but some of the instances in which a party to an arbitration
could legitimately and justifiably disclose the proceedings, or some aspect of the proceedings, of
an arbitration. Granted the various circumstances in which disclosure can legitimately take place,
two questions necessarily arise. First, is there a legal basis for holding that there is an obligation
not to disclose? Secondly, if so, how is the obligation to be defined and what are the exceptions
to it?
33. An obligation not to disclose may arise from an express contractual provision. If the parties
wished to secure the confidentiality of the materials prepared for or used in the arbitration and of
the transcripts and notes of evidence given, they could insert a provision to that effect in their
arbitration agreement. Importantly, such a provision would bind the parties and the arbitrator, but
not others. Witnesses, for example, would be under no obligation of confidentiality.
34. Absent such a provision, it is difficult to resist the conclusion that, historically, an agreement
to arbitrate gave rise to an arbitration which was private in the sense that strangers were not
entitled to attend the hearing. Privacy in that sense went some distance in bringing about
confidentiality because strangers were not in a position to publish the proceedings or any part of
67
them. That confidentiality, though it was not grounded initially in any legal right or obligation,
was a consequential benefit or advantage attaching to arbitration which made it an attractive
mode of dispute resolution. There is, accordingly, a case for saying that, in the course of
evolution, the private arbitration has advanced to the stage where confidentiality has become one
of its essential attributes so that confidentiality is a characteristic or quality that inheres in
arbitration.
35. Despite the view taken in Dolling-Baker and subsequently by Colman J in Hassneh
Insurance, I do not consider that, in Australia, having regard to the various matters to which I
have referred, we are justified in concluding that confidentiality is an essential attribute of a
private arbitration imposing an obligation on each party not to disclose the proceedings or
documents and information provided in and for the purposes of the arbitration.
36. The appellants' argument was designed to establish that an agreement to arbitrate contains an
implied term that each party will not disclose information provided in and for the purposes of the
arbitration. The argument was that the implication was to be made as a matter of law in all
private agreements for arbitration unless presumably the agreement provided otherwise. There is
a clear distinction between implying a term in a contract as a matter of law and implying a term
in order to give business efficacy to a contract. The distinction was discussed by the House of
Lords in Liverpool City Council v. Irwin (23), particularly by Lord Wilberforce (24). The
implication of a term as a matter of law is made by reference to "the inherent nature of a contract
and of the relationship thereby established", to use the words of Lord Wilberforce (25). As
Deane J pointed out in Hawkins v. Clayton (26), his Lordship focused on the nature of the
contract and formulated the relevant test in terms of what is necessary or required in the
circumstances on the footing that "such obligation should be read into the contract as the nature
of the contract itself implicitly requires, no more, no less" (27).
37. It follows that the case for an implied term must be rejected for the very reasons I have given
for rejecting the view that confidentiality is an essential characteristic of a private arbitration. In
the context of such an arbitration, once it is accepted that confidentiality is not such a
characteristic, there can be no basis for implication as a matter of necessity. In Hassneh
Insurance, Colman J said of the obligation of confidentiality that (28):
"(t)he implication of the term must be based on custom or business efficacy."

In my view, for the reasons already stated, this approach must also be rejected.
38. In the light of the conclusion which I have reached, I do not need to consider whether the
difficulties in defining the exceptions to any implied term forbidding disclosure are such as to
preclude the implication of such a term. That the difficulties are considerable was acknowledged
both by the Court of Appeal in Dolling-Baker and by Colman J in Hassneh Insurance. Colman J
thought that a qualification could be formulated along the lines of the exceptions to a bank's duty
of confidentiality, which had been discussed by the members of the English Court of Appeal in
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Tournier v. National Provincial and Union Bank of England (29). In that case, the formulations
of these exceptions differed to some extent. Colman J expressed the qualification applicable to
arbitration agreements in these terms (30):
"If it is reasonably necessary for the establishment or protection of an arbitrating party's legal
rights vis-a-vis a third party, in the sense which I have described, that the award should be
disclosed to that third party in order to found a defence or as the basis for a cause of action, so to
disclose it would not be a breach of the duty of confidence."
For my part, if an obligation of confidence existed by virtue of the fact that the information was
provided in and for the purposes of arbitration, this statement of the qualification seems unduly
narrow. It does not recognize that there may be circumstances, in which third parties and the
public have a legitimate interest in knowing what has transpired in an arbitration, which would
give rise to a "public interest" exception. The precise scope of this exception remains unclear.
39. The courts have consistently viewed governmental secrets differently from personal and
commercial secrets (31). As I stated in The Commonwealth of Australia v. John Fairfax and
Sons Ltd. (32), the judiciary must view the disclosure of governmental information "through
different spectacles". This involves a reversal of the onus of proof: the government must prove
that the public interest demands non-disclosure (33).
40. This approach was not adopted by the majority of the House of Lords in British Steel
Corporation v. Granada Television Ltd. (34), where the confidential documents in question
revealed the internal mismanagement of a statutory authority. In passing, the majority attributed
to the public interest exception a very narrow scope, stating that, although disclosure was of
public interest, it was not in the public interest (35). I would not accept this view. The approach
outlined in John Fairfax should be adopted when the information relates to statutory authorities
or public utilities because, as Professor Finn notes (36), in the public sector "(t)he need is for
compelled openness, not for burgeoning secrecy". The present case is a striking illustration of
this principle. Why should the consumers and the public of Victoria be denied knowledge of
what happens in these arbitrations, the outcome of which will affect, in all probability, the prices
chargeable to consumers by the public utilities?
An implied undertaking not to disclose documents made available in an arbitration as on

discovery
41. In relation to documents produced by one party to another in the course of discovery in
proceedings in a court, there is an implied undertaking, springing from the nature of discovery,
by each party not to use any document disclosed for any purpose otherwise than in relation to the
litigation in which it is disclosed (37). Over a century ago, Bray on Discovery stated (38):
"A party who has obtained access to his adversary's documents under an order for production has
no right to make their contents public or communicate them to any stranger to the suit ... nor to
use them or copies of them for any collateral object ... If necessary an undertaking to that effect
will be made a condition of granting an order".
69
Because an undertaking is implied, it has not been the practice to condition the making of orders
in that way. The implied undertaking is subject to the qualification that once material is adduced
in evidence in court proceedings it becomes part of the public domain, unless the court restrains
publication of it.
42. It would be inequitable if a party were compelled by court process to produce private
documents for the purposes of the litigation yet be exposed to publication of them for other
purposes. No doubt the implied obligation must yield to inconsistent statutory provisions and to
the requirements of curial process in other litigation, e.g. discovery and inspection, but that
circumstance is not a reason for denying the existence of the implied obligation.
43. The next step is to say that a similar obligation arises in an arbitration. In England it has been
held that, because the parties to an English law arbitration submit to the possibility that the
English discovery procedure will apply to their arbitration, by implication they must be mutually
obliged (39):
"to accord to documents disclosed for the purposes of the arbitration the same confidentiality
which would attach to those documents if they were litigating their disputes as distinct from
arbitrating them".
I see no reason to disagree with this statement. But, consistently with the principle as it applies in
court proceedings, the obligation of confidentiality attaches only in relation to documents which
are produced by a party compulsorily pursuant to a direction by the arbitrator. And the obligation
is necessarily subject to the public's legitimate interest in obtaining information about the affairs
of public authorities. The existence of this obligation does not provide a basis for the wide-
ranging obligation of confidentiality which the appellants seek to apply to all documents and
information provided in and for the purposes of an arbitration. If the judgments in Dolling-Baker
and Hassneh Insurance are to be taken as expressing a contrary view, I do not accept them.
Protection of confidential information

44. In argument, reference was made to the principles governing the protection of confidential
information generally. No doubt these principles may have some application to information in
arbitration proceedings. But these principles do not support the broad claim for confidentiality
made by the appellants.
Declarations 6C and 6F
45. In the light of the views which I have expressed, the generality of declarations 6C and 6F
may create problems. I would remit the matter to the Supreme Court of Victoria to reformulate
the declarations or make such orders as may be appropriate in the light of these reasons.
Conclusion
46. In the result I would dismiss the appeal with costs, subject to remitter of the matter to the
70
Supreme Court of Victoria to reformulate declarations 6C and 6F or to make such orders as may
be appropriate in the light of these reasons.
BRENNAN J For the reasons which the Chief Justice gives, I agree that, when one party
produces documents or discloses information to an opposing party in an arbitration that is to be
heard in private, the documents or information are not clothed with confidentiality merely
because of the privacy of the hearing. Nor does the use of a document in such proceedings make
the document confidential. I agree also that absolute confidentiality of documents produced and
information disclosed in an arbitration is not a characteristic of arbitrations in this country.
Accordingly, a party who enters into an arbitration agreement is not taken merely on that account
to have contracted to keep absolutely confidential all documents produced and information
disclosed to that party by another party in the arbitration.
2. If a party to an arbitration agreement be under any obligation of confidentiality, the obligation

must be contractual in origin. A term imposing an obligation of confidentiality could be
expressed in an arbitration agreement but such a term would be unusual. Nor is such an
obligation imposed by the Commercial Arbitration Act 1984 (Vic.). A term is implied only
where, inter alia, it is necessary (40) to give to the contract "such business efficacy as the parties
must have intended" (41). The intended business efficacy must be inferred "from the very nature
of the transaction" (42). The parties may not have consciously adverted to the subject matter of
the term which is said to be implied, but implication is determined according to their presumed
intention (43). Obligations which, if proposed to the parties when they entered into their contract,
would not have been accepted by both are not thereafter implied in the contract (44).
3. Some obligation of confidentiality could be implied simply from the fact that, when a party
claims the production of documents or the disclosure of information under an arbitration
agreement for the purposes of the arbitration, the production or disclosure is given solely for that
purpose. A duty to produce a document or to disclose information to another party, whether
pursuant to an express stipulation or pursuant to the arbitrator's power to order discovery or
production, is a duty imposed for the purposes of the arbitration (45). Production of documents
or disclosure of information is not given to a party to be used for whatever purpose the party
chooses. The duty to produce documents or to disclose information to another is an invasion of a
party's right to keep the documents and information confidential and the burden of that duty
would be increased beyond that contracted for if there were no restriction on the other party's
freedom to disseminate the documents and information (46). To give business efficacy to the
limited purpose of production or disclosure, an undertaking of confidentiality must be implied.
But it does not follow that an undertaking of absolute confidentiality is to be implied. At the time
when the arbitration agreement was entered into, the party who is to receive the documents or
information may have been in such a situation that it would be unreasonable to predicate of that
party an intention to keep absolutely confidential the documents produced or the information
disclosed. To the extent that a party would not have agreed to keep documents or information
confidential, the implied obligation of confidentiality must be qualified.
71
4. Where a party is in possession of a document or information and is under a duty at common
law or under statute to communicate the document or information to a third party, no contractual
obligation of confidentiality can prohibit the performance of that duty (47). Moreover, a party
may be under a duty, not necessarily a legal duty, to communicate documents or information to a
third party who has an interest in the progress or outcome of the arbitration. To take an example,
it could not be supposed, in the absence of a clear contrary indication, that a party which is a
wholly owned subsidiary of a holding company intended to keep confidential from its holding
company documents or information relating to the matter in dispute in the arbitration. Nor could
a party be taken to have intended that it would keep confidential documents or information
which it wished to reveal for the protection of its own interests. Nor could a party be taken to
have intended that it would keep confidential documents or information when the party has an
obligation, albeit not a legal obligation, to satisfy a public interest - more than mere curiosity - in
knowing what is contained in the documents or information.
5. A question of confidentiality arose in Tournier v. National Provincial and Union Bank of

England (48), where Bankes LJ held that a banker's implied obligation of confidentiality with
respect to a customer's account and affairs was qualified "(a) Where disclosure is under
compulsion by law; (b) where there is a duty to the public to disclose; (c) where the interests of
the bank require disclosure; (d) where the disclosure is made by the express or implied consent
of the customer". Scrutton LJ(49) and Atkin LJ(50) put the qualifications in slightly different
terms. This case was relied on by Colman J in Hassneh Insurance v. Mew (51). His Lordship said
(52):
" In my judgment a similar qualification must be implied as a matter of business efficacy in the
duty of confidence arising under an agreement to arbitrate."
I would imply an obligation of confidentiality as a matter of business efficacy but limit the
implication by reason of the likelihood that one or other party would have reserved the right to
disseminate otherwise confidential material in certain situations. But, in substance, I respectfully
agree with his Lordship's observation as to the qualification of the obligation of confidentiality.
6. I would hold that, in an arbitration agreement under which one party is bound to produce
documents or disclose information to the other for the purposes of the arbitration and in which no
other provision for confidentiality is made, a term should be implied that the other party will
keep the documents produced and the information disclosed confidential except (a) where
disclosure of the otherwise confidential material is under compulsion by law; (b) where there is a
duty, albeit not a legal duty, to the public to disclose; (c) where disclosure of the material is fairly
required for the protection of the party's legitimate interests; and (d) where disclosure is made
with the express or implied consent of the party producing the material.
7. To imply an obligation of qualified confidentiality in this way substantially equates the

contractual obligation of a party under an arbitration agreement with the obligation of a party
who impliedly gives an undertaking of confidentiality to the court when obtaining an order for
72
discovery in an action. The underlying principle in the latter situation is that a party who obtains
the production of documents or the disclosure of information for a particular purpose cannot use
the documents or information for a "collateral or ulterior purpose" (53). That phrase is not used
in a pejorative sense, as Lord Diplock said in Home Office v. Harman (54), but it is used -
"merely to indicate some purpose different from that which was the only reason why, under a
procedure designed to achieve justice in civil actions, (the solicitor for a party) was accorded the
advantage, which she would not otherwise have had, of having in her possession copies of other
people's documents."
If the duty of production or disclosure in an arbitration were ordered by a court, an undertaking
to the court to use the documents produced or information disclosed only for the purposes of the
arbitration would be implied and would be enforced by proceedings for contempt. But such an
undertaking "can, in appropriate circumstances, be released or modified by the court" (55). That
dispensing power is not freely exercised (56), but it will be exercised when special circumstances
appear (57). In the Federal Court, special circumstances have been held to exist where "there is a
special feature of the case which affords a reason for modifying or releasing the undertaking and
(the feature) is not usually present" (58). It is unnecessary to consider whether the dispensing
power should be so broadly defined. It is relevant to note only that the obligation enforceable as
an undertaking to the court in the case of a curial order is not unqualified.
8. In the present case, the Minister has a statutory right under the State Electricity Commission
Act 1958 (Vic.) ("SEC Act") (59) to obtain information from the State Electricity Commission of
Victoria ("SECV"). It is the duty of SECV to furnish the Minister with the information required
under that sub-clause and that duty cannot be defeated by any contractual duty to keep
documents or information confidential. Any implied obligation of confidentiality must be
qualified accordingly. Further, the Gas and Fuel Corporation of Victoria ("GFC") and SECV are
public authorities (60). They are engaged in the supply of energy in the State of Victoria (61).
The award to be made in the respective arbitrations will affect the price of the energy supplied by
the appellants to GFC and SECV and by them to the public. The public generally has a real
interest in the outcome, and perhaps in the progress, of each arbitration which the relevant public
authority has a duty to satisfy. GFC and SECV have a duty - possibly a legal duty in the case of
SECV (62) but at least a moral duty in the case of both public authorities - to account to the
public for the manner in which they perform their functions. Public authorities are not to be
taken, prima facie, to have bound themselves to refrain from giving an account of their functions
in an appropriate way: sometimes by giving information to the public directly, sometimes by
giving information to a Minister, to a government department or to some other public authority.
9. The duty to convey information to the public may not operate uniformly upon each document
or piece of information which is given to GFC or SECV for the purpose of the particular
arbitration. Performance of the duty to the public is unlikely to require the revelation of every
document or piece of information. It may be possible to respect the commercial sensitivity of
information contained in particular documents while discharging the duty to the public and,
where that is possible, the general obligation of confidentiality must be respected.
73
10. The appellants accept that GFC and SECV are at liberty to disclose to the Minister "if
authorized by statute to do so, or for the purpose of the arbitrations" documents and information
obtained by them from the appellants in the course of the arbitrations. That concession fails to
qualify the implied obligation of confidentiality to the extent that, in my opinion, accords with
the intention that ought to be attributed to GFC and SECV at the time when they entered into the
respective arbitration agreements. GFC and SECV are both governed by bodies whose
constitution is determined or substantially determined by the Governor in Council (63). The
Minister may require GFC to inquire into the steps required, inter alia, to secure the safe,
economical and effective supply of gas and fuel in Victoria (64), all financial accounts are to be
forwarded to the Minister (65) and the Minister may direct GFC to provide the Minister with an
annual report on the measures taken in the previous financial year to monitor its compliance with
the Act and regulations in relation to the supply of gas (66). The Minister may direct SECV as to
the policies it is to give effect to (67). SECV is to give effect to any direction given to it by the
Minister as soon as possible and to report to the Minister thereon (68). SECV is to operate as far
as practicable in accordance with the criteria established from time to time by the Minister with
respect to efficiency, economy, safety and reliability (69). The Minister is responsible for
convening the annual general meeting of SECV and may convene other meetings at any time
(70). The Government of Victoria has a continuing financial interest in the functioning of both
authorities. In the ordinary course of administration of the relevant Acts and in the performance
by GFC and SECV of their respective functions, information on energy matters would have to be
passed from GFC and SECV respectively to the Minister, and vice versa. Neither GFC nor
SECV could be taken to have impliedly undertaken to keep confidential from the Government or
the Minister documents or information relevant to the administration of the energy portfolio. The
implied obligation of confidentiality is qualified accordingly.
11. The limitations on the freedom of GFC and SECV to disclose confidential information and
documents discovered by the appellants for the purposes of the arbitration do not accord with
declarations which the appellants now seek as set out in the Chief Justice's judgment. In the
circumstances, I would order that the matter be remitted to the Supreme Court of Victoria to
reformulate the declarations or to make such other orders with respect to particular documents or
classes of documents as are appropriate and consistent with these reasons for judgment.
DAWSON J I agree with the judgment of the Chief Justice and have nothing to add.
TOOHEY J The background to this appeal, including the relevant provisions of the two sales
agreements made between the first and second appellants, on the one hand, and the Gas and Fuel
Corporation of Victoria ("GFC") and the State Electricity Commission of Victoria ("SEC")
respectively on the other, appears in the judgment of the Chief Justice.
2. The appeal gives rise to three questions, which to a large extent overlap. The questions may be
identified as follows:
1. Whether, by reason of an implied term in an agreement to submit a dispute to arbitration or
74
because it is inherent in its nature, an arbitration is to be conducted in private in the sense that
strangers are excluded unless both parties consent to their presence.
2. Whether arbitrations carry an obligation of confidence imposed on the parties in relation to all
documents and information that are not already matters of public knowledge.
3. Whether there is a more limited obligation, not to disclose information in documents
discovered in the course of an arbitration, comparable to the obligation in civil litigation not to
disclose the contents of discovered documents except for the purpose of the litigation.
Privacy
3. Propositions such as the following from Russell on the Law of Arbitration (71) are stated as if
they are self-evident:
"Arbitration is a private tribunal for the settlement of disputes. The public, therefore, may not be
admitted if their admission is objected to by either party or the arbitrator."
4. Persons entitled to attend the hearing of an arbitration have been identified in the following
way (72):
"Persons entitled to attend the hearing include the following:
(1) each party - if the party is a company, this will include any officer or servant whom the
company desires to be present;
(2) any person whom any party desires to represent him or it at the hearing. This may be counsel,
solicitor, surveyor or anyone else. However, if it is the intention of the party to be represented by
solicitor or counsel, he should notify such intention in good time so as to enable the opposing
party to be represented by solicitor or counsel if thought fit;
(3) any person whom a party wishes to have present as a witness, or otherwise to assist in
presentation of the party's case;
(4) a shorthand or other notetaker, if the party wishes to have notes taken for the proper
presentation of his case in the instant arbitration."
5. In this regard there are decisions which Brooking J, in the Appeal Division of the Supreme
Court of Victoria (73), described as "decisions dealing with complaints about the exclusion of
persons whose presence was said to be necessary to the proper conduct of the arbitration by a
party" (74). Those decisions involved the power of an arbitrator to exclude a particular person
from the hearing, though the person was present at the instance of a party. While the exclusion of
strangers was not directly involved in any of these cases, a right to exclude strangers may be
inferred from the fact that what was under attack was the arbitrator's power to exclude a person
who fell within the categories identified by authors such as Bernstein and Wood as those entitled
to attend.
6. A further relevant line of authority is constituted by those cases which indicate that two or
75
more arbitrations can only be heard together with the consent of the parties. In Oxford Shipping
Co. v. Nippon Yusen Kaisha ("The Eastern Saga") (75) Leggatt J set aside an arbitrator's order
that two arbitrations be heard together. The decision was based directly on the privacy of
arbitrations, a concept that "derives simply from the fact that the parties have agreed to submit to
arbitration particular disputes arising between them and only between them" (76). In Bibby Bulk
Carriers v. Cansulex Ltd. (77) Hirst J relied on the authority of The Eastern Saga in saying: "I
accept that the arbitration proceeding is a private one, but this arises simply and solely as a result
of the contract between the participants".
7. The Eastern Saga must be read in the light of the judgment of Cole J in Aerospatiale Holdings
Australia Pty. Ltd. v. Elspan International Ltd. (78) Cole J referred a number of disputes to
arbitration. In doing so he appointed the same person as arbitrator for all disputes and directed
that, unless the arbitrator decided otherwise, all disputes would be heard together. Privacy was
treated as one factor to be weighed along with other "material circumstances" in the exercise of
the court's discretion (79). His Honour distinguished The Eastern Saga on the ground that in the
case before him the parties to the arbitrations were not in reality different: "Although they may
technically be 'strangers' to that dispute, there is no realistic sense in which that is so." (80)
Jacobs (81) criticises Cole J's decision, saying that its effect is that in New South Wales "the
principle of privacy can no longer be said to apply". In the present case Brooking J disputed this
analysis of Aerospatiale, stating that Cole J's judgment recognises the importance of privacy in
arbitrations (82).
8. Whatever the current state of the law with respect to the joint hearing of arbitrations (on which
it is unnecessary to express an opinion), it is clear, as Brooking J recognised, that "it is and has
been for many years, if not indeed ever since the emergence of arbitration, the practice for
arbitrations to be conducted in private" (83). Parties agree to refer their disputes to arbitration on
the assumption that the hearing will be conducted in private (84). The law has given effect to this
understanding in a number of ways, without any clear recognition of it as an independent legal
rule. Privacy should be implied as a term of the agreement to arbitrate; the implied term is
attached as a matter of law rather than to give business efficacy to the agreement (85). A term is
implied as a matter of law "as the nature of the contract itself implicitly requires" (86). The very
nature of arbitration agreements, the established practice for arbitrations to be conducted in
private and the importance attached to privacy in arbitration hearings indicate that a term
requiring privacy should be implied as a matter of law.
Confidentiality
9. If there is no restraint on a party to an arbitration making public what was said or done at an
arbitration, including the contents of documents tendered to the arbitrator, there would be little
point in excluding strangers from an arbitration (87). Effect was given to this approach in
Dolling-Baker v. Merrett (88) when the English Court of Appeal restrained a party to an
arbitration from disclosing, in a later action, documents relating to the arbitration. The Court
accepted, however, that if discovery and inspection of the documents are necessary for the fair
disposition of the later action, they may be ordered.
76
10. In the present appeal the respondent Minister sought to draw a distinction between the
privacy attaching to an arbitration hearing and the confidentiality attaching to what takes place at
such a hearing. While clearly it is not possible to say that every aspect of an arbitration is
confidential in every circumstance, no sharp distinction can be drawn between privacy and
confidentiality in this context. They are, to a considerable extent, two sides of the same coin. The
privacy of an arbitration hearing is not an end in itself; surely it exists only in order to maintain
the confidentiality of the dispute which the parties have agreed to submit to arbitration.
11. A distinction between privacy and confidentiality has been drawn in the context of court
proceedings. For example, legislatures have made provisions allowing judges to prohibit the
publication of evidence given in open court (89). This may be done in conjunction with the
closing of the court, but the two need not be done together (90). There is also a line of authority
which suggests that judges have inherent power to prohibit the publication of certain matters
arising during the trial, such as the identity of witnesses, even though the matters are raised in
open court (91).
12. However no analogy can fairly be drawn between arbitrations and court proceedings in this
regard. The right to publish a report of court proceedings is an important common law right that
is "vital to the proper working of an open and democratic society and to the maintenance of
public confidence in the administration of justice" (92). Thus even a statutory power to exclude
the public from proceedings will not necessarily abrogate this common law right (93).
Furthermore, when information given in court proceedings is protected, it is not the publication
per se that is objectionable, rather it is the contempt of court resulting from disobedience of the
non-publication order. Only publications which interfere with the due administration of justice
will of themselves amount to a contempt of court (94). And even when the guiding concern is the
"due administration of justice" rather than the private rights and interests of parties, there is still
some recognition that the privacy of hearings and the non-publication of matters raised at trial to
a large extent go together. Thus when a witness reveals his or her identity at an open court
hearing, a previous non-publication direction may be taken to have been effectively abandoned
(95).
13. It is true that until Dolling-Baker there had been no English decision supporting a principle
of confidentiality of arbitration hearings. And the one Australian decision that touches the point,
Alliance Petroleum Australia NL v. Australian Gas Light Co. (96), tends to be against the
existence of an obligation of confidentiality. But the lack of authority is inconclusive. No doubt,
it is possible to infer therefrom the absence of such an obligation (97). But, equally, it may well
be that the long established acceptance of privacy has carried with it an assumption of
confidentiality, at least in general terms (98).
14. It is also true that complete confidentiality of the proceedings in an arbitration cannot be
achieved. The Chief Justice gives illustrations of circumstances in which a party to arbitration
77
proceedings must be able to disclose aspects of the proceedings to others. But the appellants did
not contend for a principle of complete confidentiality. Their counsel said:
"We are not contending that they are secret proceedings, in the sense that there is an absolute
shroud over them at all; we just say that the documents and information that are provided for the
purposes of this resolution in private of this private dispute should be treated as private and not
disclosed except for the purposes of the dispute or as required by law."
15. In this regard it does not advance the matter to refer to such situations as a party to an
arbitration over the building of his house, being asked by his wife: "How did it go?" (99) It is not
hard to visualise situations in which disclosure by a party may be incidental and of no
consequence. But the issue is whether there is a principle of confidentiality upon which one party
may rely to restrain the disclosure by the other party of information given at the arbitration which
the first party wishes to protect from disclosure. Ordinarily, that party will only seek to do so
where the disclosure may have some adverse consequence.
16. Much of the difficulty that has surrounded this litigation since it began in the Supreme Court
of Victoria has stemmed from the varying forms of declarations for which the parties have
contended. The chameleon-like character of the declarations has tended to push the debate into
the area of semantics. Initially the parties took their stands on propositions cast in virtually
absolute terms. That is, the Minister was arguing for a declaration that all information disclosed
was not subject to any obligation of confidence, while the appellants sought declarations that any
documents or information supplied were to be treated in confidence as between the parties.
These rival contentions were later modified, to take on a more specific shape. However, they did
not assume a final form until the last day of the hearing in this Court.
17. As a result of the Appeal Division's decision, there are two declarations extant and the
argument before this Court necessarily focused on them. They are:
"6C. (GFC) is not restricted from disclosing information to the Minister and third persons by
reason only that:-
(a) the information was obtained by it from Esso/BHP in the course of or by reason of arbitration
pursuant to the 1975 Sales Agreement; and

"6F. SEC is not restricted from disclosing information to the Minister and third persons by
reason only that:-
(a) the information was obtained by it from Esso/BHP in the course of or by reason of arbitration
pursuant to the 1981 Sales Agreement; and
78
18. In this regard it is necessary to mention the State Electricity Commission Act 1958 (Vict.).
Clause 4(2) of "Business and Rules" in the Sixth Schedule to the Act empowered the Minister to
obtain from SEC "all documents papers and minutes which he requires either for Parliament or
himself" (100). There is no comparable provision in the Gas and Fuel Corporation Act 1958
(Vict.). It is clear that SEC cannot, by declaration, be restricted from disclosing information to
the Minister which the Minister was entitled to under the State Electricity Commission Act.
19. In terms of formulation, it is easy enough to express a principle of non-confidentiality. In

effect, that is what the Minister has done in declarations 6C and 6F which he seeks to uphold.
But it is much harder to express a principle of confidentiality which accepts, as it must, that there
are significant exceptions. And this has been the appellants' difficulty from the outset of this
litigation. A principle of confidentiality, expressed to be subject to "all just exceptions" or the
like, is a principle so nebulous as to be hardly a principle at all. Brooking J referred to the
problem in these terms (101):
"But one of the great obstacles to the adoption of the principle of confidentiality now put forward
lies in identifying and stating the exceptions which will prove the rule, particularly that
permitting disclosure where the interests of the party require it. I could not accept a general rule
which was not subject to some such exception, having regard to what I believe occurs in practice
and to what I believe to be 'equitable'. But in what terms is the exception to be expressed?"
Later his Honour said (102):
"The difficulty in formulating both the general rule and the exceptions (for one cannot consider
the one without the other) tells against its recognition."
20. Colman J, in Hassneh, was conscious of the difficulties; nevertheless he recognised an

obligation of confidentiality, saying (103):
"It is reasonably clear that ... such documents are subject to a duty of confidence. They are
merely the materials which were used to give rise to the award which defined the rights and
obligations of the parties to the arbitration. Accordingly, that qualification to the duty of
confidentiality based on the reasonable necessity for the protection of an arbitrating party's rights
against a third party cannot be expected to apply to them. It is the final determination of rights
expressed in the award which is pertinent as against third parties, not the raw materials for that
determination. The relevant exception in the case of such documents is an order or leave of the
Court."
The duty of confidence to which Colman J referred was a duty which his Lordship derived from
the privacy attached to an arbitration hearing. He found that privacy to be an implied term of an
agreement to arbitrate (104). Colman J then went on to say (105) that "the requirement of privacy
must in principle extend to documents which are created for the purpose of that hearing". In
putting it that way, his Lordship must be taken as viewing confidentiality in arbitrations as an
aspect of the implied term in an agreement to arbitrate, namely, that the hearing shall be held in
private.
79
21. It is curious that while the question of confidentiality in arbitration proceedings has arisen
from time to time, the courts, until recently, have not found it necessary to enunciate any relevant
principle. In the end the matter is not one to be resolved in general terms for it is not possible to
formulate a principle based on complete confidentiality or a complete lack thereof. It is
necessary to focus on particular categories of documents and information. Nevertheless, this
must be done against some background of principle, even if only to identify exceptions.
22. In conventional litigation, documents which are disclosed and produced by one party to
another pursuant to the rules of court relating to discovery of documents are subject to an implied
undertaking that they will not be used for any purpose other than in relation to the litigation itself
(106). There is no reason in principle why the same obligation should not attach to documents
produced at the instance of an arbitrator. Indeed, given the private nature of the arbitration
hearing, there is every reason why the obligation should attach. In Hassneh Colman J said (107):
"In as much as the parties to an English law arbitration impliedly agree to use English discovery
procedure, or at least to submit to the possibility that such procedure will apply, it must by
implication be their mutual obligation to accord to documents disclosed for the purposes of the
arbitration the same confidentiality which would attach to those documents if they were litigating
their disputes as distinct from arbitrating them. The fact that the proceedings are in private lends
weight to the necessity for that implication."
What Colman J said of the position in England applies equally to Australia.
23. Next, there is the award itself and, where applicable, the reasons for that award. An award
may, with the leave of the Supreme Court, be enforced in the same manner as a judgment or
order of the Supreme Court to like effect (108). To that extent, as Colman J observed in Hassneh
(109), an award "is at least potentially a public document for the purposes of supervision by the
Courts or enforcement in them". In any event, an award gives rise to rights and obligations
between the parties which may be enforced as independent contractual obligations (110).
Furthermore, an award may be challenged in the courts, by reason of the misconduct of the
arbitrator or for such other reason as may be available. In these circumstances any duty of
confidentiality must yield to a right in a party to an award to disclose that award to a third party
where it is reasonably necessary to do so to protect the interests of the party under the award.
24. What then of any reasons accompanying an award? The reasons may refer to the pleadings,
the evidence and the arguments. Of course if there is no confidentiality attaching to arbitrations,
that is of no consequence. If some confidentiality does attach, it may be a matter of concern.
However, to require a party seeking to enforce an award (or indeed, to resist enforcement) to
observe confidentiality may place that party at a considerable disadvantage. The award may only
be fully intelligible when read with the reasons. Furthermore, the reasoning which led to the
terms of the award may serve to explain those terms and perhaps be a basis of challenge to the
award. It is therefore necessary to attribute to the reasons the same qualification attributed to the
80
award, namely, that they may be disclosed to a third party where it is reasonably necessary to do
so to protect the interests of a party to the arbitration.
25. That leaves for consideration whether, despite the qualifications already mentioned, there is
nevertheless some obligation of confidentiality attaching to the documents and information
emanating from an arbitration. I would find such an obligation to be a term implied as a matter of
law in commercial arbitration agreements. The term is implied from the entry by the parties into
a form of dispute resolution which they choose because of the privacy they expect to result. If
this is said to confuse privacy and confidentiality, the answer is that they are not distinct
characteristics. As Colman J said in Hassneh (111):
"The disclosure to a third party of (a note or transcript of the evidence) would be almost
equivalent to opening the door of the arbitration room to that third party."
Any aspect of disclosure to third parties must infringe the privacy of the arbitration. Thus, if one
party is free to disclose to a newspaper or media outlet the progress of an arbitration and the
evidence adduced in its course, the notion of privacy is meaningless. There must be an
underlying principle, significantly qualified in accordance with these reasons, that a party to an
arbitration is under a duty not to disclose to a third party documents and information obtained by
reason of the arbitration.
26. Although it did not arise in this appeal, I agree with the Chief Justice that there is a "public
interest" exception to the principle. But it is unnecessary and inappropriate to discuss the
boundaries of that exception.
Documents discovered in the arbitration

27. The reasons which have led to a broad principle of confidentiality have answered the
question of documents discovered by one party to another in the course of the arbitration. But
whether or not there is such a principle, confidentiality clearly attaches to this category of
information.
Conclusion
28. It follows from these reasons that declarations 6C and 6F cannot stand. The appeal should be
allowed and those declarations set aside. The parties should be given an opportunity to make
written submissions as to the orders that should be made to give effect to these reasons.
However, I would not dissent from the view of the majority that the matter should be remitted to
the Supreme Court of Victoria.
McHUGH J I agree with the reasons for judgment of Mason CJ

FOOTNOTES
1 GFC Sales Agreement, cl.12.8; SEC Sales Agreement, cl.19.5.

2 (1994) 1 VR 1.
81
3 Bremer Vulkan v. South India Shipping (1981) AC 909 at 984; London Export Corporation
Ltd. v. Jubilee Coffee Roasting Co. Ltd. (1958) 1 WLR 271 at 278-280; Haddad v. Norman Mir
Pty. Ltd. (1967) 2 NSWR 676 at 683; American Jurisprudence, 2nd ed. (1962), vol.5 at par.30.
4 Domke on Commercial Arbitration, rev. ed. (1990) at para 24.01.
5 Domke on Commercial Arbitration (Prac. Guide) at para 4.01, 4.06.
6 Oxford Shipping Co. v. Nippon Yusen Kaisha (1984) 3 All ER 835 at 842; Bibby Bulk
Carriers v. Cansulex Ltd. (1989) QB 155 at 166-167.
7 Russell on the Law of Arbitration, 20th ed. (1982) at 260; Mustill and Boyd, The Law and
Practice of Commercial Arbitration in England, 2nd ed. (1989) at 303-304.
8 (1993) 2 Lloyd's Rep 243 at 246-247.
9 Jacobs, Commercial Arbitration Law and Practice at par.1.383.
10 Bernstein, Handbook of Arbitration Practice (1987) at par.13.6.3.
11 (1990) 1 WLR 1205.
12 ibid. at 1213.
13 ibid.
14 ibid. at 1214.
15 Scott v. Scott (1913) AC 417 at 453 (where Lord Atkinson said of an in camera order that it
means no more than that the hearing will be in private); see also John Fairfax and Sons v. Police
Tribunal (1986) 5 NSWLR 465 at 481 (where McHugh JA drew a distinction between a power to
exclude strangers from proceedings and a power to prohibit publication).
16 Industrotech Constructors Inc. v. Duke University (1984) 314 SE 2d 272 at 274; Giacobazzi
Grandi Vini S.p.A. v. Renfield Corp. (1987) US Dist Lexis 1783; USA v. Panhandle Eastern
Corp. (1988) 118 FRD 346.
17 Alliance v. Australian Gas Light Co. (1983) 34 SASR 215 at 229-232.
18 Commercial Arbitration Act, s.33.
19 s.38.
20 s.39.
21 s.44.
22 s.47.
23 [1976] UKHL 1; (1977) AC 239.
24 ibid. at 254-256.
25 ibid. at 254.
26 [1988] HCA 15; (1988) 164 CLR 539 at 572.
27 Liverpool City Council v. Irwin (1977) AC at 254.
28 (1993) 2 Lloyd's Rep at 246.
29 (1924) 1 KB 461 at 473 per Bankes LJ, 481 per Scrutton LJ, 486 per Atkin LJ.
30 (1993) 2 Lloyd's Rep at 249.
31 A-G v. Jonathan Cape Ltd. (1976) QB 752; The Commonwealth of Australia v. John Fairfax
and Sons Ltd. [1980] HCA 44; (1980) 147 CLR 39; A-G (U.K.) v. Heinemann Publishers
Australia Pty. Ltd. (1987) 10 NSWLR 86; A-G v. Guardian Newspapers (No.2) [1988] UKHL 6;
(1990) 1 AC 109.
32 (1980) 147 CLR at 51.
33 ibid. at 52.
34 (1981) AC 1096.
35 ibid. at 1168-1169. Lord Salmon, in a strong dissent, highlighted the sharp distinction
between a statutory authority and a private company: "there are no shareholders, and (the
82
authority's) losses are borne by the public which does not have anything like the same safeguards
as shareholders" (at 1185). His Lordship concluded that the public was "morally entitled" to
know why the statutory authority was in such a parlous condition.
36 Finn, "Confidentiality and the 'Public Interest'", (1984) 58 Australian Law Journal 497 at 505.
37 Alterskye v. Scott (1948) 1 All ER 469 at 471; Distillers Co. v. Times Newspapers (1975) QB
613 at 618-620 per Talbot J; Riddick v. Thames Board Mills (1977) QB 881 at 895-896 per Lord
Denning M.R.; Home Office v. Harman (1983) 1 AC 280.
38 1st ed. (1885) at 238.
39 Hassneh Insurance (1993) 2 Lloyd's Rep at 247 per Colman J.
40 Codelfa Construction Pty. Ltd. v. State Rail Authority of N.S.W. [1982] HCA 24; (1982) 149
CLR 337 at 347, 404.
41 Luxor (Eastbourne), Ld. v. Cooper (1941) AC 108 at 137.
42 The Moorcock (1889) 14 PD 64 at 70.
43 Codelfa Construction Pty. Ltd. v. State Rail Authority of N.S.W. (1982) 149 CLR at 352-353.
44 Con-Stan Industries of Australia Pty. Ltd. v. Norwich Winterthur Insurance (Australia) Ltd.
(1986) 160 CLR 226 at 241; Reigate v. Union Manufacturing Co. (Ramsbottom) (1918) 1 KB
592 at 605; In re Anglo-Russian Merchant Traders and John Batt and Co. (London) (1917) 2 KB
679 at 685-686.
45 See Kursell v. Timber Operators and Contractors, Ld. (1923) 2 KB 202 at 206.
46 cf. Home Office v. Harman (1983) 1 AC 280 at 308, 312.
47 Parry-Jones v. Law Society (1969) 1 Ch 1 at 9, cited in A v. B Bank (1993) QB 311 at 322-
323.
48 (1924) 1 KB 461 at 473.
49 ibid. at 481.
50 ibid. at 486.
51 (1993) 2 Lloyd's Rep 243 at 248-249.
52 ibid. at 249.
53 Alterskye v. Scott (1948) 1 All ER 469 at 470; see Central Queensland Cement Pty. Ltd. v.
Hardy (1989) 2 Qd R 509 at 510.
54 (1983) 1 AC at 302.
55 Crest Homes Plc. v. Marks (1987) AC 829 at 854.
56 ibid. at 860; EMI Records Ltd. v. Spillane (1986) 1 WLR 967 at 977; (1986) 2 All ER 1016 at
1023-1024.
57 Holpitt v. Varimu [1991] FCA 269; (1991) 103 ALR 684 at 686-687.
58 Springfield v. Bridgelands (1992) 110 ALR 685 at 693; see also at 691-692; Holpitt v.
Varimu (1991) 103 ALR at 686-687; Complete Technology v. Toshiba [1994] FCA 1314; (1994)
124 ALR 493 at 501-502.
59 cl.4(2) of "Business and Rules" in the Sixth Schedule. The SEC Act has now been extensively
amended by, inter alia, the Electricity Industry Act 1993 (Vic.). I assume the relevant provisions
are those in force prior to the amendment.
60 See the Gas and Fuel Corporation Act 1958 (Vic.) ("GFC Act"), s.7; SEC Act, s.4.
61 GFC Act, s.22 and Schedule to Sched.2; SEC Act, s.12A.
62 See SEC Act, s.9E(2)(b), (3).
63 Arts 66, 67, 69 of the articles of association of GFC: Sched.2 to GFC Act; SEC Act, ss.4(3),
6, 8(2), (3), 9(2).
64 GFC Act, s.23(a).
83
65 ibid., s.21(2).
66 ibid., s.101(1).
67 SEC Act, s.9D(2).
68 ibid., s.9D(3).
69 ibid., s.12(2)(a).
70 ibid., s.9E.
71 20th ed. (1982) at 260.
72 Bernstein and Wood, Handbook of Arbitration Practice, 2nd ed. (1993) at 144-145.
73 Esso Aust. v. Plowman (1994) 1 VR 1 at 9.
74 See Tillam v. Copp [1847] EngR 937; (1847) 5 CB 211 (136 ER 857); Haigh v. Haigh (1861)
3 De GF and J 157 [1861] EngR 530; (45 ER 838); Traynor v. Panan Constructions Pty. Limited
(1988) 7 Aust Construction LR 47 (N.S.W. Sup. Ct).
75 (1984) 3 All ER 835.
76 ibid. at 842.
77 (1989) QB 155 at 166-167.
78 (1992) 28 NSWLR 321. The New South Wales Court of Appeal dismissed an application for
leave to appeal. In the High Court Gaudron J declined to grant a stay pending an application for
special leave to appeal: Elspan International Ltd. v. Aerospatiale Holdings Ltd. (1992) 67 ALJR
177. The application for special leave to appeal was discontinued on 6 April 1993.
79 See the discussion at (1992) 28 NSWLR at 327.
80 ibid. at 326.
81 Commercial Arbitration Law and Practice at par.1.383.
82 Esso Aust. v. Plowman (1994) 1 VR at 13.
83 ibid. at 12.
84 See Hassneh Insurance v. Mew (1993) 2 Lloyd's Rep 243 at 246.
85 See Esso Aust. v. Plowman (1994) 1 VR at 12-13 per Brooking J.
86 Liverpool C.C. v. Irwin [1976] UKHL 1; (1977) AC 239 at 254 per Lord Wilberforce. See
also Lister v. Romford Ice and Cold Storage Co. Ltd. [1956] UKHL 6; (1957) AC 555 at 576-
577. As to implying a term to give business efficacy to a contract, see Codelfa Construction Pty.
Ltd. v. State Rail Authority of N.S.W. (1982) 149 CLR 337.
87 See Bernstein and Wood, op. cit. at 145.
88 (1990) 1 WLR 1205.
89 For example, Crimes Act 1900 (N.S.W.), s.578; Evidence Act 1910 (Tas.), s.103A.
90 For example, Evidence Act 1929 (S.A.), ss.69 and 69a; Evidence Act 1971 (A.C.T.), s.83(2);
Evidence Act (N.T.), s.57(1).
91 Reg. v. Socialist Worker Printers and Publishers Ltd.; Ex parte Attorney-General (1975) QB
637 at 652 per Lord Widgery CJ; Taylor v. Attorney-General (1975) 2 NZLR 675; Ex parte The
Queensland Law Society Incorporated (1984) 1 Qd R 166 at 170 per McPherson J.
92 John Fairfax and Sons v. Police Tribunal (1986) 5 NSWLR 465 at 481 per McHugh JA
93 ibid.
94 Attorney-General v. Leveller Magazine (1979) AC 440 at 452 per Lord Diplock, 465 per
Lord Edmund-Davies.
95 ibid. at 452-453, 456, 469.
96 (1983) 34 SASR 215 at 231.
97 Esso Aust. v. Plowman (1994) 1 VR at 14, 32.
98 The lack of attention given to confidentiality in commercial arbitrations is in contrast to the
84
significant attention given to the subject in mediation, the latter being "a topic of much interest
and debate among the dispute resolution community": New South Wales Law Reform
Commission, Training and Accreditation of Mediators, Report No.67, (1991) at par.5.32. Also
see Attorney-General's Department (Victoria), Attorney-General's Working Party on Alternative
Dispute Resolution: Report (1990) at pars 5.18-5.20; and Attorney-General's Department
(Commonwealth), Dispute Resolution in Commercial Matters: Papers, (Canberra), 6 June 1986
at 11-13.
99 Esso Aust. v. Plowman (1994) 1 VR at 15-16.
100 Clause 4(2) has now been repealed. See Electricity Industry Act 1993 (Vict.), s.113.
101 ibid. at 31.
102 ibid. at 32.
103 (1993) 2 Lloyd's Rep at 250.
104 cf. Dolling-Baker v. Merrett (1990) 1 WLR at 1213 where Parker LJ said that the obligation
of confidentiality arises "out of the nature of arbitration itself".
105 (1993) 2 Lloyd's Rep at 247.
106 Distillers Co. (Biochemicals) Ltd. v. Times Newspapers Ltd. (1975) QB 613 at 618-620;
Riddick v. Thames Board Mills (1977) QB 881 at
895-896; Home Office v. Harman (1983) 1 AC 280.
107 (1993) 2 Lloyd's Rep at 247.
108 Commercial Arbitration Act 1984 (Vict.), s.33.
109 (1993) 2 Lloyd's Rep at 247.
110 Bremer Oeltransport G.m.b.H. v. Drewry (1933) 1 KB 753.
111 (1993) 2 Lloyd's Rep at 247.
85
86
Case number: ARB(AF)/07/01
between
PIERO FORESTI, LAURA DE CARLI & OTHERS
and
THE REPUBLIC OF SOUTH AFRICA
Petitioners:
The Centre for Applied Legal Studies (CALS)

The Center for International Environmental Law (CIEL)
The International Centre for the Legal Protection of Human Rights (INTERIGHTS)
The Legal Resources Centre (LRC)
Peti by:
The Legal Resources Centre
9th Floor, Bram Fischer House
25 Rissik Street, JOHANNESBURG 2000
Republic of South Africa
Tel: +27 (11) 836-9831
Fax: +27 (11) 834-4273
Email: jasonb@lrc.org.za
Reference: Mr Jason Brickhill
87
PETITION FOR LIMITED PARTICIPATION AS NON-DISPUTING PARTIES

Case number: ARB(AF)/07/01
between
PIERO FORESTI, LAURA DE CARLI & OTHERS
and
THE REPUBLIC OF SOUTH AFRICA
CONTENTS OF PETITION
1. ORDERS SOUGHT -3-

2. OVERVIEW OF THE PETITION -3-
3. BRIEF DESCRIPTION OF THE PETITIONERS -4-
4. REASONS FOR THE PETITION -8-
5. LEAVE TO FILE A WRITTEN SUBMISSION - 20 -
6. ACCESS TO KEY ARBITRAL DOCUMENTS - 30 -
7. ACCESS TO THE ORAL HEARINGS - 44 -
8. SUMMARY OF THE PETITION AND ORDERS SOUGHT - 49 -
ANNEXURE A: DETAILED DESCRIPTION OF THE PETITIONERS - 51 -
-2-
88
1. ORDERS SOUGHT
1.1 The Petitioners are two South African non-governmenta

and two international NGOs. Acting collectively, they seek the following orders of
the Tribunal in the arbitration concerning Piero Foresti, Laura de Carli and Others
v. Republic of South Africa, ICSID Case No. ARB(AF)/07/01 currently pending
before the International Centre for Settlement of Investment Disputes:
1.1.1 Leave to file a written submission with the Tribunal regarding matters
within the scope of the dispute;
1.1.2 Access to certain key arbitration documentation, subject to the redaction

therefrom, upon the order of the Tribunal, of any commercially confidential
or otherwise privileged information that is not relevant to the concerns of
the Petitioners as non-disputing parties; and
1.1.3 Absent any objection by the Parties, permission to attend and present the
in the alternative, to attend and/or observe the oral hearings.
1.2 The above three orders are sought pursuant to articles 41(3), 27 and 35, and 39,
respectively, of Schedule C of the Additional Facility Rules of the International
Centre for Settlement of Investment Disputes as amended and effective April 10,
2006. It is common cause that the Additional Facility Rules (the AF Rules) apply
to the present arbitration per the election of ICSID arbitration by the Claimants.1
2. OVERVIEW OF THE PETITION
006
-3-
89
2.1 The Petitioners are all public interest organisations who seek to assist the
Tribunal in its resolution of the dispute by raising and discussing relevant human
rights-related issues and legal obligations arising within the scope of the dispute.
2.2 The Petition will proceed as follows. Part 3 provides a brief overview of the
Petitioners. To enable the Tribunal to make a fully informed evaluation of the
Petition, Annexure A provides detailed descriptions of the Petitioners, their
organisational structures, affiliate relationships, and funding sources. Part 4 sets
forth the major reasons for the Petition and describes the
the Piero Foresti
leave to file a written submission. In support of this request, Part 5 discusses:
pt written
submissions from non-disputing parties; the test to apply in determining the
suitability of a specific petitioner to act as a non-disputing party; the suitability of
the present Petitioners under this test; and the question of fairness to the Parties
2.3 Part 6 addresses the Tribunal s jurisdiction to grant

access to key arbitral documents. It describes the documents sought and the
reasons therefor and outlines the Pet position on the appropriate
approach to document disclosure in this case. Part 7 follows a similar outline in
respect of the uest to attend and present key submissions at the
oral hearings, or in the alternative, to attend or observe the oral hearings and to
respond to any specific questions of the Tribunal.
3. BRIEF DESCRIPTION OF THE PETITIONERS
The South African petitioners
3.1 The Centre for Applied Legal Studies (CALS) is an independent research,
advocacy and public interest litigation organisation committed to promoting
democracy, justice and equality in South Africa and to addressing and undoing
CALS works toward the realisation of human rights for all South Africans under a
-4-
90
just constitutional and legal order. CALS pursues these goals through:
undertaking rigorous research, writing, analysis and briefings; teaching and
providing public education and training; the collection and dissemination of
information and publications; participation in policy formulation, law reform,
dispute resolution and institutional development and coordination; and the
provision of legal advice and public interest litigation services.
3.2 The Legal Resources Centre (LRC) is a South African human rights
organisation that seeks to use the law as an instrument of justice for the
vulnerable and marginalised, including poor, homeless, and landless people and
communities who suffer discrimination by reason of race, class, gender, disability
or by reason of social, economic, and historical circumstances. The LRC
all facets of South African society through means that include impact litigation,
law reform, participation in partnerships and development processes, education,
and networking within South Africa, the African continent and at the international
level.
3.3 CALS and the LRC are two of the leading human rights advocacy organisations
in South Africa. Between them, they have litigated hundreds of human rights
cases in the South African courts over a 30-year period. Both organisations
have extensive experience in the protection and promotion of economic and
social rights, including non-discrimination, formal and substantive equality rights,
and the progressive realisation of rights through law. They have in-depth
knowledge of local laws and circumstances and are well-placed to assist the
Tribunal in understanding the domestic aspects of the public interest issues
raised by this dispute.2
The international petitioners
2
See Part 4 below.
-5-
91
3.4 The Center for International Environmental Law (CIEL) provides a wide
range of services to clients and partners, including legal counsel, analysis, policy
research, advocacy, education, training, and capacity building. The primary
focus of this work is with developing country governments and civil society
groups. Through its Trade and Sustainable Development Program, CIEL seeks
to reform the global framework of economic law in order to promote human
development and a healthy environment. CIEL has developed expertise in
sustainable development and the broader international law issues that arise from
investor-state arbitrations, including the relationship between international
investment agreements and national development policy, the linkages between
private agreements and international investment agreements, and the broader
implications for environmental and human rights law of the interpretation of host
state obligations under bilateral investment treaties. CIEL has been engaged in
international trade and investment law issues since the early 1990s and has
intervened previously in investor-state arbitrations, including Methanex Corp v
United State (NAFTA),3 and Suez et al v Argentina4 and Biwater v Tanzania5
(both ICSID).
3.5 The International Centre for the Legal Protection of Human Rights
(INTERIGHTS) is an independent international human rights law centre working
to promote the effective realisation of international human rights standards
through law. INTERIGHTS focuses on strategic litigation for the protection of
human rights. It assists lawyers in bringing cases to international human rights
bodies, disseminates information on international and comparative human rights
law, and undertakes capacity building activities for lawyers and judges.
INTERIGHTS maintains regional programmes in Africa and Europe as well as
thematic programmes covering equality and non-discrimination, economic and
3
See Methanex Corporation v. United States of America, Final Award of the Tribunal on
Jurisdiction and Merits, 3 August 2005 (hereinafter Methanex Final Award).
4
See Suez, Sociedad General de Aguas de Barcelona S.A. and Vivendi Universal S.A v.
Argentine Republic, Order in response to a Petition for Transparency and Participation as Amicus
Curiae, ICSID Case No. ARB/03/19 (19 May 2005). For convenience, this case will hereinafter
Aguas Argentinas
5
See Biwater (Gauff) Tanzania (Ltd) v United Republic of Tanzania, Award, ICSID Case No.
ARB/05/22 (24 July 2008) (hereinafter Biwater Final Award).
-6-
92
social rights and security and the rule of law. Over its 27-year history,
INTERIGHTS has participated in human rights-promoting litigation efforts across
a range of international, regional and domestic fora, including: the UN Human
Rights Committee, the European Court of Human Rights, the European
Committee of Social Rights, the
Rights, the Court of the Economic Community of West African States and the
Inter-American Commission and Court on Human Rights.
3.6 Working together, CIEL and INTERIGHTS bring an important international NGO
perspective on the public interest issues at stake in this dispute and the various
international legal obligations which may impact upon the dispute. Both
organisations have developed a deep understanding of the legal issues that arise
out of disputes involving governmental obligations toward private parties and the
impact of such disputes upon individual countries
development options particularly sustainable and equitable development in a
manner that is consonant with human rights obligations. CIEL and INTERIGHTS
have invested heavily in addressing systemic issues that may threaten the
achievement of human rights at the international level. Both organisations have
an in- rights obligations, the
the approaches taken by other courts and tribunals in

obligations. As such, they are well-placed to provide an international civil society
perspective on how the Tribunal may take account of the international human
rights issues raised by this dispute.
Coordination of efforts
3.7 The Petitioners herein have combined their requests in order to minimise any
potential burden on the Tribunal and the Parties and to maximise the usefulness
of their submissions. Acting collectively, the Petitioners bring the necessary
experience and perspectives to address the public concerns that surround this
case from multiple civil society angles. Should this Petition be granted, the
Petitioners will continue to work together to present their views in a single
integrated written submission that will be grounded in the relevant legal principles
-7-
93
and sources of law and will directly engage the issues before the Tribunal. To
facilitate this cooperation and further minimise any communication burden, the
LRC has agreed to act as coordinating counsel for the Petitioners collectively.
Individual and collective undertakings of the Petitioners
3.8 Individually and collectively, the Petitioners and their representatives hereby
attest and affirm that they are independent public interest organisations and that
they have no relationship, direct or indirect, with any party or any third party to
this dispute which might give rise to any conflict of interest. The Petitioners have
not received any assistance, financial or otherwise, from a party or a third party to
this dispute in the preparation of this Petition. They will not receive any such
assistance in the preparation of their non-disputing party submissions should this
Petition be accepted by the Tribunal.
4. REASONS FOR THE PETITION
4.1 This arbitration gives rise to a number of issues that are of direct concern to
South African citizens and the civil society groups that represent them, as well as
a wide range of issues of concern to the citizens of all countries. The challenged
legislation at the centre of the dispute, the Mineral and Petroleum Resources
Development Act of 2002 ( MPRDA ), was enacted in South Africa for
important public policy reasons and in furtherance of constitutionally mandated
goals. These include: human rights advancement, and in particular the pursuit
of substantive equality; sustainable development; environmental protection;
sound and prude ; and the need
to proactively redress the apartheid history of exploitative labour practices, forced
land deprivations, and discriminatory ownership policies which previously
characterised mining sector for decades. As such, the arbitration
raises important questions concerning, inter alia, the appropriate line between
legitimate, non-compensable regulatory action and compensable expropriation
under international law.
-8-
94
4.2 One particularly salient
which may have serious domestic repercussions is the scope of the post-
law, to implement legislative and policy decisions designed to redress the

devastating socio-economic legacy left by apartheid. The Claimants have
directly challenged certain social transformation aspects of the MPRDA
including certain Black Economic Empowerment policies as expropriatory acts
and/o
the bilateral investment treaties at issue in this matter.6 In doing so, they have
put the international legality of such constitutionally mandated measures squarely
in dispute.
4.3 While South Africa has made much progress toward the realisation of the right to
equality and other human rights in the 15 years since its transition from apartheid
to democratic rule, vast inequalities remain deeply entrenched in South African
society. According to the most recent country report (2003) of the United Nations
Development Programme,7 62% of black South Africans lived below the national
poverty line of ZAR 3548 per month per adult equivalent at the time of the survey.
The comparable figure among white South Africans was 1.5%.9 Similarly, only
45% of black South Africans lived in formal housing, compared to 89% of
members of other ethnic groups.10 The labour market was also rife with
inequality, with 36.1% unemployment among the black South African population
versus 12.4% among other groups.11 Education levels, health care provision,
HIV/AIDS infection rates, land ownership, and access to basic services (such as
6
1 at pp 9-10.
7
South Africa Human Development Report 2003, The Challenge of Sustainable Development in
South Africa: Unlocking Pe , United Nations Development Programme (2003)
(hereinafter Human Development Report) at ch 2, p. 41, table 2.20, available at:
http://hdr.undp.org/en/reports/nationalreports/africa/southafrica/south_africa_2003_en.pdf.
8
9
Human Development Report, above n 7 at ch. 2, p. 41, table 2.20.
10
Ibid at ch 2, p 34, table 2.16.
11
Ibid at ch 2, p 20, table 2.7. These figures utilize the expanded definition of unemployment,
which includes those job seekers who are employable and desire to work but have given up
searching due to prolonged discouragement.
-9-
95
electricity, water, and sanitation) displayed similarly shocking disparities across
racial groupings.12 In terms of income inequality, South Africa continues to rank
.13 Land ownership patterns display
similar trends. Black South Africans, comprising around 79% of the population,14
were estimated to own only 18% of all land in South Africa at the end of 2008.15
These inequities are a direct result of past systematic discrimination against
certain people groups. They can only be corrected through proactive measures.
4.4 It was precisely in recognition of such realities that the drafters of the 1996 South
African Constitution placed upon the Government concrete obligations in respect
of positive human rights fulfilment, including in the area of equality rights. The
Preamble to the Constitution states that the Constitution was adopted
and that one of its purposes is to
The very first founding provision of the Constitution, section 1(a), provides that
As the South African Constitutional Court has stated:
We live in a society in which there are great disparities in wealth.

Millions of people are living in deplorable conditions and in great
poverty. There is a high level of unemployment, inadequate social
security, and many do not have access to clean water or to
adequate health services. These conditions already existed when
the Constitution was adopted and a commitment to address them,
12
For an overview of the statistics, see ibid ch. 2. A more complete analysis of individual topics,
including education, health, land ownership, and access to basic services can be found in later
chapters of the same report.
13
Economists use the Gini coefficient to measure the extent of income inequality within countries.
A Gini coefficient of 0.0 indicates perfect income equality between the richest and poorest groups,
Gini coefficient rose
of the most Human Development Report, above n 7 at ch 2, p 43.

14
Midyear Estimates 2003, Statistics South Africa, Statistical Release P0302, p. 6, table 1,
available at: http://www.statssa.gov.za/Publications/P0302/P03022003.pdf.
15
(citing a 2008 state land audit by the Department of Land Affairs), available at:
http://www.mg.co.za/article/2009-01-23-who-owns-what-land-in-south-africa.
- 10 -
96
and to transform our society into one in which there will be human
dignity, freedom and equality, lies at the heart of our new
constitutional order. For as long as these conditions continue to
exist that aspiration will have a hollow ring.16
4.5 Section 9(2) of the Constitution authorises the state, in order to promote the
achievement of equality including the full and equal enjoyment of all rights and
freedoms in the Bill of Rights to take legislative and other measures designed
to protect or advance persons or categories of persons disadvantaged by unfair
discrimination. Section 25 of the Constitution, which protects the right to
property, envisages the need for such measures by providing in section 25(4)
that, for the purposes of the property clause,
Section 25(5) goes a step further

take reasonable legislative and other measures, within
its available resources, to foster conditions which enable citizens to gain access
to land on an equitable basis Section 25(8) clarifies that no provision of the
measures to achieve land, water and related reform, in order to redress the
results of past racial discrimination provided that any departure from the
provisions of
general limitations clause.17
16
Soobramoney v Minister of Health, KwaZulu-Natal, 1998 (1) SA 765 (CC) at para 8.
17
The limitations clause is found in section 36 of the Constitution and reads as follows:
1. The rights in the Bill of Rights may be limited only in terms of law of general
application to the extent that the limitation is reasonable and justifiable in an
open and democratic society based on human dignity, equality and freedom,
taking into account all relevant factors, including-
a. the nature of the right;
b. the importance of the purpose of the limitation;
c. the nature and extent of the limitation;
d. the relation between the limitation and its purpose; and
e. less restrictive means to achieve the purpose.
2. Except as provided in subsection (1) or in any other provision of the
Constitution, no law may limit any right entrenched in the Bill of Rights.
- 11 -
97
4.6 These provisions make clear that the Government of South Africa operates
under constitutional obligations to bring about the realisation of substantive
wealth. As is evident from its preamble, the MPRDA was enacted by the South
African Parliament in an attempt to partially fulfil these constitutional obligations.18
For this reason, the Petitioners submit that a thorough understanding of the
for a proper interpretation of the MPRDA, which is, in turn, necessary in order to
conduct a
bilateral investment treaties.
4.7 More broadly, the proper interpretation of substantive equality provisions under
international human rights law and the ability of governments to pursue
substantive equality without violating
their international investment commitments are matters that affect all nations.
promote economic and social rights,
such as the right to a healthy environment, the right to development, and other
human rights by imposing environmental, labour, and other regulations upon
mining operations. The concomitant international responsibility of investors to
contribute to human rights fulfilment, environmental protection, and the social
natural resources is also a question of international concern.19 The human rights

and sustainable development dimensions of this dispute are undeniably of public
interest to the international community at large. The impact of this arbitration will
accordingly reverberate far beyond the boundaries of this particular dispute.
18
See eg paras 5-7 of the Preamble to the MPRDA, which state:
South
BEING COMMITTED to eradicating all forms of discriminatory practices in the

mineral and petroleum industries;
and other measures

19
See eg principles 1
respect of human rights, labour rights, and environmental protection), available at:
http://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/index.html.
- 12 -
98
4.8 For these reasons, in establishing the international validity of South
contested measures under the MPRDA, the Petitioners submit that the Tribunal
must also have regard to international human rights law. Like the South African
constitution, several international treaties to which South Africa is a party impose
certain regulatory and other obligations upon the Government of South Africa in
connection with the protection and promotion of human rights.
4.9 For example, the International Convention on the Elimination of all Forms of
Racial Discrimination ( CERD ) recognise pecial measures [may be
taken] for the sole purpose of securing adequate advancement of certain racial
or ethnic groups or individuals requiring such protection as may be necessary in
order to ensure such groups or individuals equal enjoyment or exercise of human
rights and fundamental freedoms .20 The International Covenant on Civil and
Political Rights ( ICCPR )
freely dispose of their natural wealth and resources without prejudice to any
obligations arising out of international economic co-operation, based upon the
principle of mutual benefit, and international law. In no case may a people be
.21 The ICCPR also protects the right
to equality before the law and equal and effective protection against
discrimination, which has been interpreted by the Human Rights Committee as:
sometimes requir[ing] States parties to take affirmative action in

order to diminish or eliminate conditions which cause or help to
20
International Convention on the Elimination of All Forms of Racial Discrimination (G.A. Res.
th
2106, Annex, U.N. GAOR, 20 Sess., Supp. No. 14 at 47, U.N. Doc. A/6014 (1966), entered into
force Jan. 4, 1969), ratified by South Africa 10 Dec 1998
21
International Covenant on Civil and Political Rights, G.A. res. 2200A (XXI), 21 U.N. GAOR
Supp. (No. 16) at 52, U.N. Doc. A/6316 (1966), 999 U.N.T.S. 171, entered into force Mar. 23,
1976 he
International Covenant on Economic, Social and Cultural Right , which has been
signed by South Africa and which has been used by the Constitutional Court in the interpretation
of the South African Constitution, is worded in identical terms. Article 2 of the ICESCR further
provides that States Parties mus
must out discrimination of any
International Covenant on Economic, Social and Cultural Rights (G.A. Res. 2200A, U.N.
st
GAOR, 21 Sess., Supp. No. 16 at 49, U.N. Doc. A/6316 (1966), 993 U.N.T.S. 3, entered into
force Jan. 3, 1976
- 13 -
99
perpetuate discrimination prohibited by the Covenant. For
example, in a State where the general conditions of a certain part
of the population prevent or impair their enjoyment of human rights,
the State should take specific action to correct those conditions.
Such action may involve granting for a time to the part of the
population concerned certain preferential treatment in specific
matters as compared with the rest of the population
4.10 The Convention on the Elimination of All Forms of Discrimination Against

Women ( CEDAW ) obliges states to undertake affirmative action and specifies
that such measures should be aimed at addressing imbalances and past
discriminatory practices.22 The
1986 (Banjul Charter) recognises that the right to property may be encroached
23
and entrenches the
,
specifying
.24
4.11 In light of the above-described international and domestic legal obligations upon
the Government of South Africa and the Claimant
the
Tribunal will be required to determine, inter alia, the following issues of major
public concern in resolving this dispute:
4.11.1 Whether particular types of human rights-promoting measures may

infringe the fair and equitable treatment and/or expropriation provisions of
even though such measures are
22
Convention on the Elimination of All Forms of Discrimination against Women (G.A. Res.
th
34/180, U.N. GAOR 34 Sess., Supp. No. 46 at 193, U.N. Doc. A/34/46, entered into force Sept.
3, 1981), ratified by South Africa 15 Dec 1995
23
African [Banjul] Charter on Human and Peoples' Rights, adopted June 27, 1981, OAU Doc.
CAB/LEG/67/3 rev. 5, 21 I.L.M. 58 (1982), entered into force Oct. 21, 1986, ratified by South
Africa 7 Sep 1996, at art 14.
24
Ibid at art 21.
- 14 -
100
not only permissible but in certain respects obligatory under both
international human rights law and South African constitutional law.
4.11.2 If so, whether and how the history behind the human rights-promoting
measures, the proportionality of the measures taken in relation to their
stated objectives, the international and/or constitutional legality of the
measures under human rights law, and the potential impact of any financial
domestic and international human rights obligations affect the proper

interpretatio
standard under the bilateral investment treaties.
4.12 , the Tribunal must determine

the dispute in accordance with the applicable law, including the law specified by
the BITs and/or the AF Rules25 and any choice of law agreement that may have
been concluded between the Parties.26 The Petitioners recognise that the
frequently contentious. The
25
The Petitioners note the discrepancy in choice of law provisions between the two BITs at issue
in this dispute. The BIT between South Africa and the Belgo-Luxembourg Economic Union
specifies in Article 10(5) that:
national law, including the rules
relating to conflicts of law, of the Contracting Party involved in the dispute in
whose territory the investment has been made, the provisions of this Agreement,
the terms of the specific agreement which may have been entered into regarding
the investment as well as the principles of international law
(Emphasis added.) The SA-Belgolux BIT therefore makes clear that both domestic and
international law must be applied. The South Africa-Italy BIT, on the other hand, contains no
choice of law provision. Article 54 of the AF Rules therefore effectively assigns a discretion
concerning choice of law to the Tribunal, stating that in the absence of any agreement on choice
of law, the Tribunal shall apply:
and (b) such rules of international law a

Although this provision does not specifically require the Tribunal to apply domestic law, part (a)
in this section, the Petitioners submit that the Tribunal should indeed consider both international
and domestic human rights law when evaluating the consistency of the regulatory regime of the
26
The Petitioners are unaware of any specific choice of law agreement between the Parties.
Should any such agreement exist, the Petitioners have requested access to it in Part 6 below.
- 15 -
101
Petitioners are not privy to the positions of the Parties or any pronouncements of
where a
dispute requires a tribunal to characterise a particular governmental act either as
a permissible regulatory action or as a compensable expropriation and, in the
event of the latter, to determine the amount of the compensation due, the
duties and which may
affect its compensation obligations must be directly applicable. The Petitioners
constitutional and
international human rights obligations is therefore necessary for a proper
4.13 The same is true of consideration of the S

the fair and equitable treatment standard under the bilateral investment treaties
invoked here. Previous investment tribunals have found that the fair and
equitable treatment standard comprises several discrete components,27 and the
Petitioners submit that human rights law is relevant to some of them. For
example, a
rights law is directly relevant to the question of whether the regulatory scheme
promulgated by the MPRDA can be considered to have been done arbitrarily, in
bad faith, or in a discriminatory fashion. Were the Tribunal to examine these and
other components of the fair and equitable treatment standard without taking
27
These include the obligation of the host state to:
(1) ensure transparency of government regulatory processes and non-discrimination in their
application (see Metalclad Corp v. United Mexican States, ICSID (NAFTA) Case No.
ARB(AF)97/1, 16 ICSID Rev. FILJ 168 (2001) [hereinafter Metalclad], paras 76ff and
para 101);
(2) provide full protection and security to foreign investments (see Ronald S. Lauder v. The
Czech Republic, UNCITRAL Final Award of 3 September 2001, para 308);
(3) act in good faith and in a non-arbitrary manner toward foreign investors (on good faith
see GAMI Investments, Inc. v. Government of the United Mexican States, in proceedings
pursuant to NAFTA Chapter 11 and the UNCITRAL Arbitration Rules (Nov. 15, 2004); on
non-arbitrariness see Case Concerning Elettronica Sicula, S.p.A. (ELSI) (U.S. v. Italy),
ICJ Judgment of 10 July, 1989, para 128);
(4) treat foreign investments in a way that does not undermine the legitimate expectations
taken into account by foreign investors in making their investments (see Tecnicas
Medicoamientales TECMED SA v. the United Mexican States, ICSID Case No.
ARB(AF)/00/2, Award (May 29, 2003), para 154).
- 16 -
102
account of human rights law, it would risk creating an irreconcilable conflict
international legal obligations under
human rights law, on the one hand, and its bilateral investment treaties, on the
other.
4.14 An interconnected approach to international law is increasingly recognised by

international courts and bodies in various spheres as fundamental. In making
their submissions, the Petitioners would seek to assist the Tribunal in placing the
BITs and other a
interrelationship between the above-mentioned applicable bodies of law, in order
to promote a more coherent international legal framework. The Petitioners
respectfully submit that a consideration of such submissions would assist the
Tribunal in reaching a proper determination of the dispute.
4.15 The importance of avoiding any interpretive approach that would create an
irreconcilable conflict between the relevant bilateral investment treaties and the
human rights obligations described above goes well beyond this particular
dispute. The other contracting States to the BITs underlying this dispute
(Belgium, Luxembourg, and Italy) are all parties to the ICCPR, CERD, CEDAW,
and ICESCR.28 These treaties obligate them not only to respect and promote
the relevant human rights within their own territories but also to cooperate in
contributing to the promotion of those human rights extraterritorially.29 As such,
28
treaties, available at: http://treaties.un.org/Pages/Treaties.aspx?id=4&subid=A&lang=en.

29
remains a matter of some debate. That some level of obligation exists, however, is broadly
accepted. This is traced back to article 55 of the UN Charter (quoted, for example, in the
preamble to the ICESCR), which requires all of its members to promote:
conditions of economic and social progress and development; solutions of
international economic, social, health, and related problems; and . . . universal
respect for and observance of human rights and fundamen
Charter of the United Nations, 26 June 1945, 59 Stat. 1031, T.S. 993, 3 Bevans 1153, entered
into force Oct. 24, 1945. At an absolute minimum, the contracting parties to the major
international human rights conventions listed above must not enter into treaties (such as BITs)
that would undermine their ability to fulfil their own human rights obligations and must not
interfere wi
- 17 -
103
any interpretation of the relevant BITs that conflicts with the clear obligations of
states under these widely accepted human rights treaties would create a
-
the other contracting Parties to the BITs, rendering it impossible for them to
simultaneously fulfil their obligations under both sets of treaties. In view of the
similarity of the relevant BITs to many of the more than 2600 BITs now in
existence, this could also create difficulties for dozens of other states that are
contracting parties to both human rights conventions and BITs. The Petitioners
submit that it is therefore appropriate for the Tribunal to hear from leading
international human rights organisations on the potential systemic impacts of this
dispute.
4.16 The Petitioners are additionally concerned by the very real potential for two other
conflicts to arise out of this dispute. The first is the possibility of conflicting rulings
between this Tribunal and the South African courts concerning the scope of
South Africa itimate policy-making space in effectuating regulatory
measures in furtherance of its human rights and sustainable development
goals.30 The Petitioners note that at least one challenge to the characterisation
of the MPRDA as permissible regulation versus compensable expropriation is
already underway in the domestic courts of South Africa.31 In an effort to
human rights obligations. See eg EXTRATERRITORIAL APPLICATION OF HUMAN RIGHTS TREATIES,

Coomans & Kaminga (eds), Maastricht Series in Human Rights (Intersentia 2004); Meron, T.
American Journal of International Law 1995;
Sigrun I. Skogly, BEYOND NATIONAL BORDERS: STATES HUMAN RIGHTS OBLIGATIONS IN
INTERNATIONAL COOPERATION
UNIVERSAL HUMAN RIGHTS
AND EXTRATERRITORIAL OBLIGATIONS, Gibley & Skogley (eds), University of Pennsylvania Press
(2009) at section 2.1 (discussing the extraterritorial application of article 1 of the ICCPR),
available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1314201.
30
The very real likelihood of such a conflict has been publicly acknowledged by one of the
7.3 below.
31
See Agri South Africa v Minister of Minerals and Energy (case number 55896/07); Van Rooyen
v Minister of Minerals and Energy (case number 10235/08), consolidated action currently pending
before the North Gauteng High Court, South Africa. On or around 20 May 2009, the defendant
(the Minister of Minerals and Energy) published a notice in terms of Rule 16A of the High Court
Rules of South Africa, giving notice of a constitutional issue that had arisen in the proceedings.
The constitutional issues identified in the notice include whether the plaintiffs experienced, by
virtue of the provisions of the MPRDA, a deprivation of rights or an expropriation and what
compensation, if any, ought to be awarded to them in terms of the relevant provisions of the
- 18 -
104
advocate for consistent approaches under both international and domestic law,
the South African Petitioners are launching a domestic amicus application to
intervene in that case on grounds similar to those cited here. It is submitted that
a consideration of the major public interest concerns of civil society
representatives by both this Tribunal and the South African courts will help to
reduce the likelihood of directly conflicting decisions.
4.17 The second potential clash concerns the validity of the BITs themselves. The
progressive realisation of human rights including substantive equality and the

right to a healthy environment are clear. Any award by this Tribunal that
directly contradicts or effectively nullifies the South African Constitution, even if
unwittingly, could potentially lead to a domestic invalidation of the BITs,32 which
would obviously be to the detriment of all concerned.33 The two South African
Petitioners are both well-practiced at holding the South African Government
accountable to its constitutional obligations. This risk, too, can therefore be
minimised by considering submissions from the Petitioners in the present
dispute.
4.18 In short, this arbitration raises issues of obvious public importance, including
substantive equality and other human rights, environmental protection,
sustainable development, and the respective roles of governments and investors
constitutional obligations and its obligations arising out of international human

rights law, on the one hand, and international investment treaties, on the other,
MPRDA and the South African Constitution.

32
must declare
that any law or conduct that is inconsistent with the Constitution is invalid to the extent of its
inconsistency
33
In this respect, the Petitioners d
would face in attempting to enforce any award issued pursuant to a BIT that has subsequently
been declared unconstitutional by the South African courts. Such an invalidation would likewise
pose serious difficulties for the government of South Africa in attracting and retaining foreign
investment.
- 19 -
105
local, national and international levels. The interest of the Petitioners in all of
these public concerns is longstanding, genuine and supported by their well-
recognised expertise in these areas.
5. LEAVE TO FILE A WRITTEN SUBMISSION
Jurisdiction to accept written submissions from non-disputing parties
5.1 Article 41(3) of the AF Rules explicitly authorises the Tribunal to accept written
submissions from non-disputing parties as follows:
or entity that is not a party to the dispute (in this Article called
-
Tribunal regarding a matter w
5.2 The Petitioners note that although the Tribunal must obtain the views of the
P -disputing
party submission is not subject to a veto by any Party.
5.3 This view was confirmed by the ICSID tribunal in the recent matter of Biwater v
Tanzania.34 In that case, the tribunal applied article 37(2) of the revised ICSID
Rules and allowed five non-disputing party petitioners to file a joint written
submission despite the strong objections of the claimant.35 As article 37(2) of the
revised ICSID Rules is virtually identical in its wording to article 41(3) of the AF
Rules presently at issue,36 the Petitioners submit that there is no reason why the
34
Biwater (Gauff) Tanzania (Ltd) v United Republic of Tanzania, Procedural Order No. 5 (in
response to a Petition for Amicus Curiae Status), ICSID Case No. ARB/05/22 (2 February 2007)
(hereinafter Biwater Procedural Order No. 5).
35
Biwater Procedural Order No. 5, ibid, at paras 49-61.
36
The only difference between Rule 37(2) of the revised ICSID Rules (as amended and effective
April 10, 2006) and Article 41(3) of the revised AF Rules that govern this dispute is the
the difference in status between the two sets of rules. The ICSID Rules form a part of the treaty
compact that is the ICSID Convention, whereas the Additional Facility Rules are separate from
the Convention and apply only to disputes in which either the State party to the dispute or the
State whose national is a party to the dispute is not a party to the ICSID Convention.
- 20 -
106
Tribunal should reach a different conclusion concerning its jurisdiction to accept a
written submission from the Petitioners here.
5.4 Even before the ICSID Rules and AF Rules were revised in 2006 to explicitly
allow tribunals to accept written submissions from non-disputing parties,
numerous investment arbitration tribunals had already found such decisions to
be within their inherent competence.37
5.5 Indeed, the Petitioners submit that the practice has by now become so consistent
across various arbitral fora and various sets of arbitration rules as to become an
accepted feature of investor-state arbitration. The Petitioners do not wish to
burden the Tribunal with a lengthy recitation of the history of non-party
submissions to other tribunals. Instead, the Petitioners rely upon the jurisdiction
explicitly conferred upon the Tribunal by Article 41(3) of the AF Rules. To the
extent that the Tribunal considers the history behind the adoption of this article
relevant to its decision, various examples of non-party submissions arising in
investor-state disputes under both the ICSID and UNCITRAL rules have been
provided in the footnotes.38
37
The first decision to allow non-party participation was taken by the NAFTA tribunal in Methanex
Corporation v United States of America, Decision of the Tribunal on Petitions from Third Persons
to Intervene as Amici Curia Methanex
at: http://naftaclaims.com/Disputes/USA/Methanex/MethanexDecisionReAuthorityAmicus.pdf.
The tribunal reached its decision over the express objections of the claimant. The same was true
of the first two decisions on amicus submissions under the ICSID Rules. See Aguas Argentinas
above n 4 and the decision of the identically composed tribunal in Suez, Sociedad General de
Aguas de Barcelona S.A. and Interagua Servicios Integrales de Agua S.A. v. Argentine
Republic, Order in Response to a Petition for Participation as Amicus Curiae, ICSID Case No.
ARB/03/17 (17 M Aguas
Provinciales de Santa Fe
Rules, which were entirely silent as to the question of non-party submissions. Even so, the
tribunals found they had the power to accept written submissions under Article 44 of the ICSID
If any question of procedure arises which is not covered by this
Section or the Arbitration Rules or any rules agreed by the parties, the Tribunal shall decide the
See Aguas Argentinas Amicus Order, above n 4, at paras 10-16 and Aguas
Provinciales de Santa Fe Amicus Order, infra at paras 11-16.
38
See cases listed in n 37 ibid. Further examples include: United Parcel Service Inc v
Government of Canada, Decision of the Tribunal on Petitions for Intervention and Participation as
Amici Curiae, 17 October 2001 (a NAFTA claim under the UNCITRAL Rules), available at:
http://naftaclaims.com/Disputes/Canada/UPS/UPSDecisionReParticipationAmiciCuriae.pdf;
Merrill & Ring Forestry LP v Government of Canada, Tribunal Decision and Invitation Concerning
Amicus Petition, July 31, 2008 (a NAFTA claim under the UNCITRAL Rules), available at:
- 21 -
107
5.6 For present purposes, it is sufficient to note that the 2006 revisions to the ICSID
and AF Rules codified and regulated the practice, with a view to introducing
greater clarity and predictability to the proceedings and to recognising the power
of tribunals to accept written submissions from non-disputing parties. In light of
39
the principle of effective interpretation l’effet utile the Petitioners submit that
the 2006 reforms are best interpreted in ways that facilitate the ability of non-
disputing parties to make relevant and useful written submissions to ICSID
tribunals.40
The test to apply in determining the suitability of a non-disputing party

petitioner
5.7 In addition to authorising the Tribunal to accept submissions from non-disputing

parties, Article 41(3) prescribes certain factors which the Tribunal must take into
account in determining whether to accept any such submission. The relevant
portion of Article 41(3) reads as follows:
consider, among other things, the extent to which:
(a) the non-disputing party submission would assist the

Tribunal in the determination of a factual or legal issue
related to the proceeding by bringing a perspective,
http://www.naftaclaims.com/Disputes/Canada/Merrill/Merrill_Ring-Canada-AmicusDecision.pdf.
39
As explained in the statement of the Appellate Body in United States – Gasoline
interpreter is not free to adopt a reading that would result in reducing whole clauses or
paragraphs of a trea United States –
Standards for Reformulated and Conventional Gasoline (“United States – Gasoline”),
WT/DS2/AB/R, adopted 20 May 1996, DSR 1996:I, at p. 23. For a general discussion of this
principle, see Yearbook of the International Law Commission, 1966, Vol. II
A/CN.4/SER.A/1966/Add.1 at p. 219 and following. See also Corfu Channel Case (1949) I.C.J.
Reports, p. 24 (International Court of Justice); Territorial Dispute Case (Libyan Arab Jamahiriya v.
Chad)
th
International Law (9 ed., Jennings and Watts eds, 1992), Vol. 1, 1280-1281.
40
Economic
Disputes, ICSID Review: Foreign Investment Law Journal, Vol. 22 no. 2 (Fall 2007); Joachim
Procedural Tran in THE OXFORD HANDBOOK OF
INTERNATIONAL INVESTMENT LAW at 721, (Peter Muchlinski, Federico Ortino & Christoph Schreuer
eds) (Oxford University Press, 2008).
- 22 -
108
particular knowledge or insight that is different from that of
the disputing parties;
(b) the non-disputing party submission would address a

matter within the scope of the dispute;
(c) the non-disputing party has a significant interest in the

proceeding.
5.8 Sub-paragraphs (a) and (b) address the usefulness and relevance of the
intended submission to the proceeding, while sub-paragraph (c) relates to the
strength of a ar interest in the case. The Petitioners address
each of these factors in turn below.
5.9 In addition, because the AF Rules do not provide an exhaustive test for
determining the suitability of individual petitioners, the Petitioners will first address
the considerations agreed by this Tribunal and the disputing Parties in their
41
making non- The Petitioners note that this
communication adopted the considerations cited by the first two ICSID tribunals
to address the question ( .42 The communication
proposes to determine the suitability of a specific non-disputing petitioner by
reference to the following information:
a. and background of the petitioner, the nature

of its membership if it is an organization, and the nature of
its relationships, if any, to the Parties in the dispute.
b.
c. Whether the petitioner has received financial or other

material support from any of the Parties or from any
person connected with the Parties in this case.
41
Secretary.
42
See the amicus orders in Aguas Argentinas above n 4 and Aguas Provinciales de Santa Fe
above n 37. These two tribunals were identically-composed tribunals seized with certain disputes
relating to the Argentine financial crisis under the previous ICSID Rules. For convenience, these
tribunals are herein .
- 23 -
109
d. The reasons why the tribunal should accept the
written submission 43
5.10 The Argentine tribunals described these considerations as encapsulating the

usual criteria applied by many jurisdictions and arbitral fora in evaluating the
suitability of applicants to serve as amici curiae namely: expertise, experience,
and independence.44
5.11 The Petitioners submit that the elements listed in sub-paragraphs (b) and (d) of
the agreed test are essentially subsumed within the list of factors now set out in
Article 41(3) of the amended AF Rules. As such, these elements will be
addressed together with the Article 41(3) factors below. The considerations
mentioned in sub-paragraphs (a) and (c) of the agreed test are addressed
immediately below as a preliminary matter.
The suitability of the Petitioners under the agreed test
5.12 Part 3 of the Petition has already partially addressed the elements referred to in
sub-paragraphs (a) and (c) of the agreed considerations above. Annexure A to
this Petition traverses those elements in further detail. In particular, the
information provided in Annexure A below demonstrates that the Petitioners are
public interest organisations funded by independent donors and that neither they
nor their donors have any relationship to the Parties or the subject matter of the
43
Aguas Argentinas and Aguas Provinciales de Santa Fe Amicus Orders, ibid, at paras 25 and
24, respectively. The
most recently cited and discussed by five non-party petitioners in the ICSID matter of Biwater v
Tanzania. Biwater Procedural Order No. 5, above n 34. In interpreting and applying Article 37(2)
of the current ICSID Rules which is virtually identical to Article 41(3) of the AF Rules presently
at issue the Biwater tribunal appears to have implicitly accepted the relevance of the Argentine
nd current
ICSID Rules rather than the current AF Rules, the Petitioners agree that the relevant
considerations in this case are substantially similar; the same test should therefore apply.
44
Aguas Argentinas Amicus order, above n 4, at paras 17, 24. Indeed, the four above-quoted
considerations are also reflective of the test enunciated by the NAFTA Free Trade Commission in
its statement authorising submissions by non-disputing parties in NAFTA cases. See Statement
of the Free Trade Commission on non-disputing party participation, available at:
http://www.naftaclaims.com/Papers/Nondisputing-en.pdf.
- 24 -
110
dispute which might give rise to a conflict of interest. As such, the Petitioners
meet the criterion of independence.
5.13 Moreover, Part 3 and Annexure A both

expertise in all of the subject areas related to their intended submissions as well
as their vast experience in presenting meaningful non-party submissions to
various courts and tribunals. The Petitioners therefore submit that the criteria of
experience and expertise are duly satisfied.
The suitability of the Petitioners under Article 41(3) of the AF Rules
5.14 The requirements set forth by Article 41(3) were quoted above. The Petitioners
point out that they are limited in their ability to demonstrate fully their satisfaction
of each of these requirements by reason of the limited knowledge they have
been able to glean of the dispute to-date. The prejudicial effect of this
transparency deficit, and specifically the lack of access to the key arbitration
documents,
submission will be taken up in Part 6 below.
5.15 For present purposes, the Petitioners request that the Tribunal bear in mind the
difficulties faced by the Petitioners in attempting to satisfy the Article 41(3) factors
without first having sight of the arbitral documents. Should the Tribunal not be
ons concerning one or more factors,
the Petitioners request that the Tribunal afford them an opportunity to rectify any
shortcomings by disclosing to the Petitioners sufficient information to allow the
Petitioners to fully meet the requirements of Article 41(3) prior to ruling on this
Petition.
(a) The non-disputing party submission would assist the Tribunal in the
determination of a factual or legal issue related to the proceeding by
bringing a perspective, particular knowledge or insight that is different
from that of the disputing parties
5.16 The Petitioners fully appreciate the requirement that their submission must
address matters, whether factual or legal, related to the proceeding. As Part 4
- 25 -
111
above has shown, the specific public interest issues that the Petitioners intend to
take up arise as a direct consequence of the Cla BITs-based challenges
to the MPRDA and the South African
Empowerment efforts under the Mining Charter. These challenges necessarily
implicate and require a careful consideration of the international law on human
rights and sustainable development, the
rights and socio-economic transformation imperatives as effectuated through the
MPRDA, and the consistency of these bodi
obligations under international investment treaties.
interest concerns are therefore directly related to and inseparably intertwined with
the core legal and factual issues that will be addressed in the arbitration.
5.17 The
insight that differs from that of the disputing parties is also satisfied here. As
Parts 3 and 4 above have shown, the starting perspectives of the Petitioners as
wholly independent civil society organisations with specialised expertise in
human rights, the environment, and sustainable development issues clearly differ
from the starting perspectives of the Parties. This much is evident from the
countless occasions on which the Petitioners have acted to defend civil society
concerns against intrusions by both government and private actors.
5.18 Of course, it is impossible for the Petitioners to guarantee without first viewing
the P that the Pe
will differ from those of the Parties. However, one can and should anticipate that
this case. Where the differences in argument are likely to be insignificant, the
Petitioners undertake to exercise their discretion and to refrain from making
submissions on such issues.45
45
This is in accordance with the Biwater n that non-disputing parties should not
Biwater
Procedural Order No 5, above n 34 at para 64.
- 26 -
112
5.19
access to certain documents is granted. The Petitioners have intentionally
formulated that request in such a way as to enable them to ensure that they will
bring relevant and helpful submissions.
(b) The non-disputing party submission would address a matter within

the scope of the dispute
5.20 The Petitioners understand this to mean that they must limit their submissions to
matters specifically at issue in this dispute, as opposed to addressing matters
that do not fall within the scope of the arbitral mandate. Likewise, the Petitioners
understand this criterion to mean that they will not introduce new contested
issues that could expand the dispute. The Petitioners undertake to submit only
such legal and factual arguments as are relevant to the subject matter of this
dispute and which fall within the jurisdiction of the Tribunal to consider. To the
extent that other concerns may arise having lesser connection to the primary
aspects of the dispute, the Petitioners undertake to refrain from addressing any
matters not central to the proceeding.
(c) The non-disputing party has a significant interest in the proceeding
5.21 The Petitioners have relied upon their knowledge of the case to-date and the
legal issues it is likely to raise in order to demonstrate why they have a significant
interest in the proceeding. The public interest issues identified above fall directly
within the expertise and mandates of the Petitioners. The Petitioners therefore
submit that this test has been met.
Fairness to the Parties
5.22 Article 41(3) of the AF Rules protects the P

functioning of the arbitration. The final sentence of that article stipulates:
-disputing party submission

does not disrupt the proceeding or unduly burden or unfairly
prejudice either party, and that both parties are given an
- 27 -
113
opportunity to present their observations on the non-disputing party
5.23 The Petitioners are sensitive to the need to ensure that any submission to be
filed by them must comply with these parameters. Two points are noteworthy in
this regard. The first relates to the timeliness of the Petition and the second to
the question of burden and prejudice to the Parties.
(i) Timeliness of the Petition
5.24 The timeliness of this Petition is rele consideration of

whether a submission by the Petitioners would disrupt the proceedings. As the
Tribunal is aware, at least one of the Petitioners (the LRC) first obtained a copy
initial request for the registration of the arbitration directly from
However, the Petitioners
submit that they have only recently been put in a position to decide positively in
favour of submitting this Petition. It will be seen that in the above-referenced
letter th
Our clients are anxious to maintain the good relations existing

between the Government and themselves in the hope that the
differences between them may rapidly be satisfactorily resolved
independently of arbitration. It is much to be hoped that nothing
that any third parties may do will hinder this important process. 46
5.25 The Petitioners have not been privy to any direct information from either party
concerning any potential settlement negotiations. However, the above-quoted
letter strongly intimated that such negotiations were in progress, and occasional
press reports have seemed to confirm this. The Petitioners are all non-profit
organisations operating on tight budgets and with limited personnel. As such,
they did not wish to expend valuable time and resources in preparing an Article
41(3) petition too early, only to discover that the matter had been settled
46
Legal Resources Centre, dated 16 May
2007, bottom of p 2.
- 28 -
114
5.26 The joinder of two additional claimants in July of 2008 and the subsequent 8-
month-long delay before the filing of the G counter-memorial
generated new uncertainties for the Petitioners as to: whether the proceedings
were moving forward, whether an additional round of briefings would take place,
and whether a new round of settlement negotiations (encompassing the new
claimants) would commence. These uncertainties were further compounded by
the recent suspension of the proceedings and by the absence of any procedural
decisions or announcemen revised timelines on the
ICSID website.47
5.27 The Petitioners elected to move forward with preparing the Petition when they
read of the suspension of the arbitration in a press report in late March, 2009.
The Petitioners worked diligently and without undue delay to coordinate their
interests and efforts and to ready this Petition for submission to the Tribunal as
swiftly as possible. Meanwhile, by a letter of 19 June 2009, the Petitioners
requested from the Secretary of the Tribunal an updated timeline of the
proceedings. A reply received by email on 14 July 2009 indicates that the
to be filed on 15 October 2009 and
Rejoinder on 12 February 2010, and the hearing is scheduled to take place from
12 23 April 2010. The Petitioners submit that there remains ample time for the
Tribunal to rule on this Petition, for the Petitioners to file a written submission,
and for all Parties to respond to such submission prior to these deadlines. The
Petitioners therefore respectfully submit that the Petition is timely.
47
announced timeline at that juncture as follows:

The Claimants submitted a Memorial on July 31, 2008. The Respondent shall submit a
Counter-Memorial on or before February 25, 2009. The Claimants shall submit a Reply
on or before June 25, 2009. The Respondent shall submit a Rejoinder on or before
October 23, 2009.
th
It would appear from the ICSID website that the G deadline was not
met. The Petitioners were unsure as to how the timeline may have been affected by the delayed
-memorial and the subsequent suspension of the proceedings
th
on March 28 , 2009. The Petitioners therefore wrote to the Secretary on 19 June 2009 (the date
on which the suspension was reported to expire) seeking further clarification of the timeline.
- 29 -
115
(ii) Burden and prejudice to the Parties
5.28 As noted above, the Petitioners are acting collectively to bring a single written
submission in order to minimise the burden on the Parties and the Tribunal. The
coordinating counsel for all of the
Petitioners further reduces any communication costs or burdens on the Parties
and the Tribunal. It should be noted that the Petitioners and their representatives
are all highly experienced in bringing non-party submissions in domestic and
international fora. In no case has any Petitioner been sanctioned or cited with
disapproval by any court or tribunal for unduly burdening or prejudicing any party
or engaging in any otherwise unprofessional conduct. On the contrary, previous
investment tribunals that have accepted submissions from non-disputing party
petitioners have acknowledged the helpful assistance of such submissions to the
better resolution of the disputes before them.48
5.29 Finally, the Tribunal is master of its own proceeding and is fully competent to take
any necessary steps to prevent undue burden or unfair prejudice to the Parties.
Such steps might include the establishment of appropriate filing deadlines to
allow the Petitioners to make a meaningful submission while also affording the
Parties adequate time to reply to such a submission; the imposition of page
limits; or any other such procedural prescriptions. The Petitioners therefore
submit that the granting of this request to file a written submission will not unduly
burden or unfairly prejudice the Parties.
6. ACCESS TO KEY ARBITRAL DOCUMENTS
The jurisdiction of the Tribunal to grant access to arbitral documents
6.1 The AF Rules are silent as to whether, and in what circumstances, non-disputing
parties may be granted access to the arbitral filings of the parties in order to
facilitate the filing of a useful written submission. Articles 27 and 35 of the AF
48
See Methanex Final Award), above n 3, at p 13, para 27; Biwater Final Award, above n 5, at
para 392.
- 30 -
116
Rules, however, afford the Tribunal a wide discretion in determining any question
of procedure not otherwise covered by the Rules. Article 27 reads
Article 35 supplements this broad power by stating: procedure

arises which is not covered by these Rules or any rules agreed by the parties,
49
6.2 Neither of these powers is subject to the consent or veto of any party. The
Petitioners therefore submit that the resolution of this request for access to
certain documents lies entirely within the discretion of the Tribunal.50 Moreover,
for the reasons that follow, the Petitioners submit that the Tribunal should
exercise its discretion in favour of granting access to certain documents in order
to allow the Petitioners to make meaningful submissions as non-disputing
parties.
The need for a balanced approach to disclosure of documents
6.3 The Petitioners are sensitive to the difficult questions that come into play in
considering the disclosure of documents to non-parties to an arbitral proceeding.
Every arbitral tribunal is tasked with protecting the rights and legitimate
expectations of the parties to the arbitration agreement in an efficient and just
arbitral proceeding. However, the Petitioners believe that an outright refusal of
document disclosure is neither necessary nor appropriate in this case.
49
Petitioners are not aware of any prior agreement between the parties concerning the disclosure
of arbitral documents generally or of specific arbitral documents in particular. Neither are the
Petitioners aware of any order
been issued by the Tribunal to-date. The Petitioners note, however, that even if such a
procedural order has been issued, the Tribunal retains the power, pursuant to Article 46 (2) of the
AF Rules, to alter its previous orders to any extent it deems necessary. Article 46 concerns
provisional measure
measures on its own initiative or recommend measures other than those specified in a request. It
50
The decision of the Biwater
Biwater Procedural Order No 5, above n 34, at paras 66-68.
- 31 -
117
6.4 Instead, the Petitioners submit that a balanced approach to document disclosure
is called for here. Such an approach would take into account not only the rights
and interests of the Parties to this dispute, but also: the disclosure obligations
that attach to the Government of South Africa under domestic, regional and
international law; the nature of investor-state arbitration as a dispute resolution
mechanism under public international law; and the pragmatic considerations that
submissions to the Tribunal as required by Article 41(3) of the AF Rules.
Protecting the rights of the Parties while also giving effect to the State’s
disclosure obligations under domestic, regional and international law
6.5 The Petitioners submit that a proper approach to disclosure of documents must
take into account the Government o , regional and
international law obligations in respect of the access to
information held by the State. These derive from constitutional and statutory
provisions and from international human rights law on the right to access to
information.
6.6 The South African C veryone has the right of access

51
and requires any limitations of this right to
be carried out to the extent that the
52
limitation is reasonable and justifiable in an open and democratic society . The
51
1. Everyone has the right of access to

a. any information held by the state; and
b. any information that is held by another person and that is required for the
exercise or protection of any rights.
2. National legislation must be enacted to give effect to this right, and may provide
for reasonable measures to alleviate the administrative and financial burden on
the state.
52
circumstance in which any right contained in the Bill of Rights (including the right of access to
information) may be limited, as follows:
1. The rights in the Bill of Rights may be limited only in terms of law of general
- 32 -
118
South African Parliament has given effect to this right through the Promotion of
53
which requires the Government, upon
application, to disclose any information it holds subject to certain narrow
exceptions concerning information that is specifically protected from disclosure.54
The South African Constitutional Court has in turn developed an interpretive
approach which examines all government obligations in light of the principles of
openness and accountability as prescribed by the Constitution.55 It is therefore
clear that the documents submitted by the Government in this dispute are subject
to a presumption of disclosure under South African law, subject only to limited
exceptions. Indeed, the Petitioners note that other civil society organisations in
South Africa have already obtained some documents related to this proceeding
by means of a PAIA request.56
application to the extent that the limitation is reasonable and justifiable in an

open and democratic society based on human dignity, equality and freedom,
taking into account all relevant factors, including-
a. the nature of the right;
b. the importance of the purpose of the limitation;
c. the nature and extent of the limitation;
d. the relation between the limitation and its purpose; and
e. less restrictive means to achieve the purpose.
2. Except as provided in subsection (1) or in any other provision of the
Constitution, no law may limit any right entrenched in the Bill of Rights.
53
Act no 2 of 2000.
54
Exceptions include information that is legally privileged, commercially confidential, or relating to
55
See eg Rail Commuters Action Group and Others v Transnet Ltd t/a Metrorail and Others, 2005
(2) SA 359 (CC), at paras 74-78 (citing sections 1, 41(1), 195, and 36(1) of the South African
Constitution and establishing the importance of openness and accountability in all government
conduct). See also Independent Newspapers (Pty) Ltd v Minister for Intelligence Services: In re
Masetlha v President of the Republic of South Africa and Another, 2008 (5) SA 31 (CC) at para
41 (as a consequence of the right to open justice, the media had a right to gain access to,
observe and report on the administration of justice and the right to have access to papers and
written arguments which were an integral part of court proceedings, subject to such limitations as
might be warranted on a case-by-case basis in order to ensure a fair trial); Trustees, Biowatch
Trust v Registrar: Genetic Resources, and Others 2005 (4) SA 111 (T) (upholding the requests of
a trust, whose aims related to nature conservation, for information relating to matters of
environmental concern).
56
For example, English-language copies of the relevant BITs were obtained via such a request.
None of the Petitioners herein took part in the PAIA request referenced. That request was
- 33 -
119
6.7 The Governm general duty of disclosure is likewise evident under
international and regional law. The United Nations has long made clear that
57
all freedoms to which the United Nations is The right to seek and
receive information has been recognised under international law since the 1948
adoption of the Universal Declaration of Human Rights (UDHR).58 Article 19 of
Everyone has the right to freedom of opinion and expression;
this right includes freedom to hold opinions without interference and to seek,
receive and impart information and ideas through any media and regardless of
frontiers International Covenant on Civil and Political Rights , to
which South Africa is a party,
access to information into binding treaty law. Article 19 of the ICCPR guarantees
59
subject to only
60
such legal This obligation has been interpreted
as including a right of access to information held by government bodies, including
judicial bodies, in whatever form it is stored.61 Article 9.1 of the African Charter
te. The Petitioners are,

however, of the view that the
PAIA. The Petitioners hereby reserve their right to pursue PAIA disclosures related to this
arbitration should it become necessary to do so. Moreover, it should be noted that any
information disclosed by means of a PAIA request can be freely disclosed to other interested
parties.
57
UN General Assembly, (1946) Resolution 59(1), 65th Plenary Meeting, December 14.
58
Universal Declaration of Human Rights, G.A. res. 217A (III), U.N. Doc A/810 at 71 (1948).
59
ICCPR above n 21, at art 19.2.
60
Ibid at art 19.3.
61
Report of
the Special Rapporteur on the promotion and protection of the right to freedom of opinion and
expression, Mr. Abid Hussain, Economic and Social Counsel, E/CN.4/2000/63 (18 January 2000)
at paras 42-44, stating, in part (para 44):
Public bodies have an obligation to disclose information and every member of
the public
all records held by a public body, regardless of the form in which it is stored;
A refusal to disclose information may not be based on the aim to protect
Governments from embarrassment or the exposure of wrongdoing; a complete
list of the legitimate aims which may justify non-disclosure should be provided in
the law and exceptions should be narrowly drawn so as to avoid including
material which does not harm the legitimate interest
- 34 -
120
on Human and Peoples Rights62 also
information, and the African Commission on Human and
has emphasised that this right includes the right of
access to information held by public bodies clearly defined rules
63
6.8 Other regional human rights courts have taken similar pro-disclosure stances in
cases raising transparency questions. The Claude Reyes decision by the Inter-
American Court of Human Rights, which involved a pre-establishment
investment decision, expressed the "principle of maximum disclosure", whereby
the state is under a positive obligation to ensure access to information of public
interest that it holds.64 Similarly, the Társaság decision by the European Court of
Human Rights, which involved judicial disclosure, emphasised the "vital role" of
"public watchdogs" in connection with freedom of expression and access to
information in a democratic society.65
6.9 While the primary duty of disclosure under these bodies of laws attaches to the
State, the domestic, regional, and international law instruments highlighted above
also make provision for the disclosure of information held by private parties
where that information is needed in order to exercise or protect a right. For
See also the subsequent report of Special Rapporteur Ambeyi Ligabo, E/CN.4/2005/64 (17
December 2004) on the same subject, stating at para 39:
all information held by public bodies shall be publicly available unless it is
subject to a legitimate exemption, and all bodies performing public functions,
including governmental, legislative and judicial bodies, should be obliged to
respond to requests for information.
62
See above n 23.
63
Declaration of Principles on Freedom of Expression in Africa, African Commission on Human
on, Banjul, The Gambia, 17 - 23 October 2002, at Part
64
Claude Reyes et al v Chile, Judgment of September 19, 2006 (Merits, Reparations, and Costs),
Inter-American Court of Human Rights, available at:
http://www.corteidh.or.cr/docs/casos/articulos/seriec_151_ing.pdf.
65
Társaság A Szabadságjogokért v Hungary, Application no 37374/05, Judgment of 14 April
2009, European Court of Human Rights, at para 38, available at:
http://cmiskp.echr.coe.int/tkp197/view.asp?item=11&portal=hbkm&action=html&highlight=hungar
y&sessionid=25896128&skin=hudoc-en.
- 35 -
121
example, Section 32.1.b. of the South African Constitution guarantees everyone
66
Part IV.2. of the African
Declaration of Principles on Freedom of Expression in Africa
protects the right of access to information held by private parties in nearly
identical terms.67 These protections are in line with the principle laid down by
Article 28 of the UDHR, which states "[e]veryone is entitled to a social and
international order in which the rights and freedoms set forth in this Declaration
can be fully realized." The Petitioners have demonstrated in Part 4 above that
important human rights may potentially be affected by the outcome of this
dispute -state
arbitrations. There is therefore a strong argument that the obligations of
disclosure referenced here may attach not only to the State but to the Tribunal
and the Claimants as well.
6.10 Although the above-described legal instruments and decisions create a strong
presumption in favour of disclosure obligations, they also make clear that the
right of access to information is not absolute. Certain restrictions may at times be
necessary to protect the rights of states or of private parties. Examples include
information that is legally privileged, commercially proprietary, or related to
sensitive national security interests of the state.68 According to the respective
Courts and interpretive bodies, these restrictions are to be interpreted narrowly
66
See above n 51.
67
See above n 63. On the international level, the UN Committee tasked with monitoring the
implementation of the right of access to information under article 19 of the ICCPR has not yet
issued any general statements concerning the right of access to information held by non-state
parties. However, other UN Committees have asserted such a right in relation to the exercise of
other human rights. See eg General Comment 15 on the Right to Water, Committee on
Economic Social and Cultural Rights, (Twenty-ninth session, 2002), E/2003/22 (2002) 120 at para
48, stating:
The right of individuals and groups to participate in decision-making processes
that may affect their exercise of the right to water must be an integral part of any
policy, programme or strategy concerning water. Individuals and groups should
be given full and equal access to information concerning water, water services
and the environment, held by public authorities or third parties
68
See above n 52, n 54 and n 61. See also below discussion of NAFTA approach at para 6.14
and n 72.
- 36 -
122
and are themselves subject to strict requirements, including that they be
necessary in a democratic society.69 The Petitioners submit that the well-
established permissible restrictions on the right of access to information, as
promulgated under the relevant domestic, regional, and international laws, are
sufficient to accommodate any privileged or proprietary information that may be
held by the Parties here. However, they could hardly justify the refusal to
disclose key documents of dispute resolution proceedings, such as pleadings,
procedural orders, jurisdictional decisions or decisions on the merits, particularly
under the AF Rules which do not prohibit disclosure of such documents.
6.11 In short, the present state of regional and international human rights law on
access to information combined with the Constitutional and legislative
guarantees in South Africa demonstrate that transparency must be the starting
point and default position in the conduct of any proceeding involving the State.
The Petitioners submit that investment arbitration is no exception. Permissible
restrictions can only be justified in exceptional circumstances. Moreover, since
transparency is a crucial element of procedural integrity in any proceeding that
may potentially affect non-parties, a lack of transparency undermines the integrity
of investor-state arbitrations no less than court proceedings. The Petitioners
therefore submit that the above-highlighted access to information obligations
point in favour of disclosure here, where obvious issues of public concern are
raised by the dispute and certain duties of disclosure attach at least to the State
Party.70
Protecting the rights of the Parties while also acknowledging the public
international law nature of investor-state arbitration
69
Ibid.
70
The Petitioners recognise that this Tribunal is not the proper forum for the direct vindication of
appropriate for the Tribunal, in responding to this request for document disclosure, to take into
account the rights of the Petitioners and the disclosure obligations upon the Parties (and
particularly the State) which would likely be upheld by the courts and tribunals that are tasked
with adjudicative oversight of the legal instruments mentioned above. In this way, the Tribunal
can protect the procedural integrity of its own proceedings while also minimising the likelihood of
any potential conflict with the respective courts and tribunals on the question of access to
information.
- 37 -
123
6.12 A second question that arises is whether traditional notions of privacy and
confidentiality developed in the private commercial arbitration context are
applicable to investor-state arbitrations arising under public international law.
The Petitioners respect the nature of arbitration as a consent-based form of
dispute resolution frequently designated by parties to a particular arbitration
agreement. The privacy and confidentiality of traditional commercial arbitral
proceedings is often justified in view of: 1) the private (as opposed to public)
identities of the parties and the private nature of their arbitral agreement; 2) the
limited scope of the subject matter covered by the agreement and the limited
number of parties subject to it; and 3) the presumption that the legal effects of the
6.13 The case for privacy and confidentiality is much weaker, however, in respect of
investor-state arbitrations, which: 1) by definition involve a public party and arise
out of public international legal texts; 2) may concern a potentially unlimited
range of subject matters brought by a potentially unlimited number of claimants
under multiple different investment treaties; and 3) may result in outcomes
or specific consent to the arbitration.
6.14 Numerous scholars, international governing bodies and civil society

organisations have challenged the appropriateness of non-transparent
procedures in the conduct of investor-state arbitrations.71 In fact, the clear trend
71
th
speech delivered to the British Institute of International and Comparative Law, 50 Anniversary
Event Series, at pp 13ff and the references cited therein, available at: http://www.arbitration-
icca.org/media/0/12392785460140/0732_001.pdf
ncing the Legitimacy of Investor-State Arbitration through Transparency and

McGill Law Review
in the Resolution of Investor-State Disputes: Adoption, Adaption, and NAFTA Leadersh
Kansas Law Review -Party Participation in
Investor-
-organised by ICSID, OECD, and
UNCTAD (12 Dec 2005, Paris), available at: http://www.oecd.org/dataoecd/6/25/36979626.pdf;
-Party Participation in Investor-State Dispute Settle
- 38 -
124
has been towards greater transparency in such arbitrations, including with
respect to document disclosure. The
the transparency interpretation adopted by the NAFTA states, by which those
states committed to provide timely public access to all documents submitted to or
issued by a NAFTA chapter 11 (investor-state) arbitral tribunal, subject only to
necessary redactions of:
i.
ii. information which is privileged or otherwise protected from
iii. information which the Party must withhold pursuant to the relevant
72
6.15 It is important to note that the NAFTA states adopted this statement on the
grounds of an absence of any provision to the contrary in the NAFTA text. The
situation is thus comparable to the one currently facing this Tribunal: nothing in
either of the applicable BITs nor in the AF Rules prevents the Tribunal from
granting disclosure of arbitral documents in this case. In view of the strong legal
presumptions in favour of document disclosure described above, the Petitioners
approach in the present dispute.
Protecting the rights of the Parties while also giving practical effect to the
ability of non-disputing parties to make useful written submissions in terms of
Article 41(3) of the AF Rules
6.16 From a pragmatic viewpoint, the Petitioners submit that a blanket refusal
approach would be overly taxing on the Petitioners as resource-constrained civil
society organisations, which may decide, after reviewing the relevant documents,
Statement by the OECD Investment Committee (June 2005), available at:

http://www.oecd.org/dataoecd/25/3/34786913.pdf -State
nd
Arbitration Annual Forum of Developing Country Investment Negotiators,
International Institute for Sustainable Development (3-4 Nov 2008, Marrakech), available at:
http://www.iisd.org/pdf/2008/dci_advances_arbitration.pdf
arbitration and secrecy, The Economist (print edition), Apr 23, 2009, available at:
http://www.economist.com/world/international/displayStory.cfm?story_id=13527961;
72
Notes of Interpretation of Certain Chapter 11 Provisions, Statement of the NAFTA Free Trade
Commission (31 July 2001) at para A.2.b, available at:
http://www.naftaclaims.com/files/NAFTA_Comm_1105_Transparency.pdf.
- 39 -
125
that they do not wish to intervene at all or that their intended intervention can be
significantly narrowed. For example, it may become clear that some of the
Pet more
Parties to the dispute. If such is the case, a sensible document disclosure policy
would allow the Petitioners to avoid the unnecessary expenditure of resources
while also reducing the corresponding burdens upon the Tribunal and the
Parties.
6.17 Moreover, as non-disputing parties whose rights and legitimate interests are
potentially affected by matters arising within the scope of a BIT-based ICSID
dispute, the Petitioners should be placed in a position to advocate for their
interests to the best of their ability.73 Unlike submissions by parties, non-
disputing party submissions often face strict page limits. The non-disputing party
Petitioners must therefore possess a sufficient knowledge of the Parties
perspectives to focus their own submissions on the specific issues on which their
perspectives and arguments differ most.
6.18 Having access to the relevant documents, which contain and support the
contentions of the disputing Parties, delineate the issues before the Tribunal, and
describe the process which the Tribunal will follow, will also enable the
Petitioners to be of the greatest possible assistance to the Tribunal in its
determination of the dispute. Without such access, the Petitioners are compelled
to make any submissions on the basis of assumptions and speculation.
6.19 Indeed, the Petitioners believe that full transparency and full participation rights
for non-disputing parties are the only possible means by which civil society
organisations can truly be empowered to protect the public interest in investor-
state arbitrations. The Petitioners however recognise that in contrast to the
NAFTA setting the debate on this issue in the ICSID context has not yet been
resolved at the systemic level. The Petitioners therefore suggest a pragmatic
73
See above para 5.6 and n 39 on the principle of effective interpretation (“l’effet utile”).
- 40 -
126
middle ground for the purposes of this case in which appropriate considerations
for the Tribunal might include:
i) the relevance of the documents requested to the Petitioners stated

interests and concerns;74
ii) the degree of prejudice to the Petitioners interests likely to arise if
the request is denied;75 and
iii) the extent to which the disputing Parties
information and other legally privileged information may be
protected by redaction rather than outright refusal of disclosure
requests.
6.20 With these factors in mind, the Petitioners have voluntarily limited their requests
to those documents which they believe, based upon their limited knowledge of
the dispute, are likely to be of relevance to the Petitioners
in Part 4 above. The Petitioners ask that the Tribunal exercise its discretion in
views on all of the public interest issues that may arise within the scope of this
dispute. Should any of the requested documents contain any confidential or
otherwise legally protected information, the Petitioners request that the Tribunal
order the redaction of the affected documents to the extent it deems necessary.
Documents requested by the Petitioners and the reasons therefor
6.21 In view of the foregoing factors, the Petitioners request access to and provide
reasons for such access in respect of the following arbitral documentation,
subject to the appropriate redaction therefrom, upon the order of the Tribunal, of
74
In case of doubt, the Petitioners submit that it should be for the Petitioners to decide whether or
not a given document may be relevant to their concerns.
75
Relevant considerations would include: the inability of the Petitioners to make reasoned
decisions concerning whether to file a written submission; inability to make useful, well-informed
arguments in any written submission; inability to narrow the scope of the intended arguments to
perspectives not already canvassed by the Parties, and the potential for misguided submissions
due to lack of information.
- 41 -
127
any commercially confidential or otherwise privileged information that is not
relevant to the concerns of the Petitioners as non-disputing parties:
6.21.1 Request: any procedural rulings or orders of the Tribunal relating to the
time and place of the arbitration proceedings, including filing deadlines for
written submissions and dates and locations of any oral hearings that may
have been scheduled;
Reasons: to enable the Petitioners to follow the progress of the

proceedings, to conduct the preparation of their submissions accordingly,
and to know when any decisions concerning the outcome of specific steps
in the proceeding may be expected.
6.21.2 Request: Any rulings or orders of the Tribunal or any agreement between
the Parties concerning the seat of the arbitration, the choice of law to be
applied, and the conflict of laws rules to be applied;
Reasons: to inform the Petitioners as to any specific decisions or

agreements concerning the applicable law and the relevant conflict of
laws rules, so that the Petitioners may focus their submissions
accordingly.76
6.21.3 Request: Any request for joinder that has been filed by additional
claimants, along with the Tribunal orders on such requests;
Reasons: to inform the Petitioners of the bases for the claims lodged
by any additional parties, and to alert the Petitioners as to whether any
additional BITs have been brought within the terms of the dispute by
nationalities.
76
See above n 25, highlighting the discrepancy between the choice of law approach implicated
by the two applicable BITs. Since both BI
choice of law agreement as between the parties to the dispute, the Petitioners seek clarification
as to whether any particular choice of law agreement exists or whether the Tribunal has made
any pronouncements concerning the choice of law.
- 42 -
128
6.21.4 Request: The written legal submissions (memorials) filed by the Parties
with the Tribunal to-date, together with any annexes that contain legal
;
Reasons: to inform the Petitioners of the precise questions that are at

issue in the dispute and the perspectives of the Parties thereupon, so
that the Petitioners may: avoid any unnecessary duplication; focus the
scope of their intended submissions; and optimally utilise the space
allotted in their written submissions by addressing only those issues
having the greatest potential impact upon the public interest and in
Parties.77
6.21.5 Request: Any written replies filed by any Party in response to any legal
submissions of any other Party as specified in the previous sub-paragraph;
Reasons: ibid.
6.21.6 Request: Any submissions of the Parties that may be filed with the
Tribunal in response to this Petition and, if the Petitioners are granted
leave to file a written submission, any subsequent observations thereon
that may be filed by any Party;
Reasons: to inform the Petitioners of the Parties the

the Petitioners to respond
appropriately if necessary and as directed by the Tribunal.
77
The
which, according to a press report of Friday 3 April 2009, comprises some 450 pages, four
witness statements, five expert reports, and 19 volumes of documentary evidence and legal
authorities. The press report is available at:
http://www.fin24.com/articles/default/display_article.aspx?Channel=News_Home&ArticleId=1518-
1786_2494588&IsColumnistStory=Falsea. The Petitioners have no idea whether the government
s own filings. To the extent
that it has, the Petitioners have no wish to waste scarce resources in duplicating arguments.
- 43 -
129
6.21.7 Any future procedural rulings or orders of the Tribunal or filings of the
Parties that may fall within the scope of the documents requested in the
foregoing sub-paragraphs.
Reasons: as listed in the foregoing sub-paragraphs.
6.22 The Petitioners respectfully submit that the foregoing requests ought to be
granted not only to ensure that the Petitioners may meaningfully contribute as
non-disputing parties to the proceeding, but also to enable the Tribunal more
effectively to ensure, in terms of Article 41(3) of the AF Rules, that the non-
disputing party submission does not disrupt the proceeding or unduly burden or
unfairly prejudice the Parties with potentially duplicative or irrelevant information.
6.23 For the avoidance of doubt, the Petitioners do not at this time request the
disclosure of any purely evidentiary annexures of any Party relating to the
specific business operations of the Claimants or the specific actions or inactions
of the Government with respect to any application to convert mining rights under
the MPRDA. The Petitioners do however reserve their right to request such
disclosures should it become clear that specific evidentiary information is
necessary in order to enable the informed and useful written submission of the
Petitioners in relation to any of their public interest concerns.
6.24 One final point bears mentioning. The Petitioners have contacted the
representatives of the Parties and have requested their voluntary disclosure of
the above-listed documents. This request has been conveyed by means of a
letter that is being transmitted simultaneously with this Petition. The Petitioners
are hopeful that the Parties will indeed accede to such request, in which case the
above document disclosure requests may fall away entirely. The Petitioners
undertake to promptly inform the Tribunal should this be the case.
7. ACCESS TO THE ORAL HEARINGS
- 44 -
130
7.1 The Petitioners recognise sing
the participation of non-disputing parties is not unlimited. Article 39 of the AF
Rules governs the oral procedure. Under part (2) of that article, the Tribunal
-parties] ... to attend or observe all or part of the hearings, subject
to appropriate logisti
that the Tribunal may not exercise this discretion if any of the disputing parties
objects.
7.2 The Petitioners submit that it would be in the interests of justice and in the best
interests of the Parties to allow the Petitioners to attend the oral hearings. The
general transparency concerns discussed in Part 6 above are apposite here. As
stated by the Methanex
perceived as more open or transparent; or conversely be harmed if seen as
78
This is especially relevant in the present case, where public
interest concerns have been raised not only by the Petitioners but also in
numerous media reports.
7.3 A 2007 summary of the case appearing on ELawNet pointed out that while South
African mining companies have largely accepted the social transformation
aspects of the MPRDA, the Piero Foresti claimants are specifically challenging
the international legality of Black Economic Empowerment measures.79 Another
2007 report cited the comments of one of the C on the dispute
as follows:
including the Black Economic Empowerment requirements,
Mr. Leon opined that bilateral investment treaties should afford

foreign investors higher levels of financial compensation than
that by signing and ratifying a series of bilateral investment treaties,
78
Methanex Amicus Order, above n 37, at para 49.
79
The International Centre for Settlement of Investment
Disputes Piero Foresti,Laura De Carli and others v. Republic of South Africa (Case No. ARB
(AF)/07/1)
http://www.elawnet.co.za/elawnetdata/publications/public000079_publ.pdf.
- 45 -
131
80
7.4 These reports have already generated a significant backlash from civil society
groups and academics in South Africa and around the world.81 The intensity of
determine very important legal and policy questions concerning constitutional

rights and obligations in South Africa. Such media reports generate negative
publicity for the Claimants, which is also likely to increase if it is perceived that
they have sought to enforce their rights through a secretive or non-transparent
process. It is therefore important for the arbitral hearings to be conducted
openly.
7.5 The Petitioners submit that the need for a public hearing is particularly strong in
this case, given the harrowing and still recent historical backdrop against which it
takes place. Secret and non-transparent decision-making was a major hallmark
of the apartheid regime and its colonial predecessors. Through the aggressive
use of such secret means, the previous regime and its private sector
collaborators successfully oppressed the majority of the South African populace
for generations. It is therefore unsurprising that the very civil society groups
which helped to vindicate the right to formal equality of millions of marginalised,
oppressed, and disenfranchised South Africans only 15 years ago should
strongly object to any secret adjudication of issues which may now adversely
impact upon the right to substantive equality under international law and the
South African Constitution. The Petitioners submit that the Parties and the
Tribunal in this dispute may best accommodate these deep-seated sensitivities
80
Investment Treaty News, November 30, 2007 (quoting an October 1, 2007 address by Peter Leon
to Harvard Law students), available at: http://www.iisd.org/pdf/2007/itn_nov30_2007.pdf.
81
See eg the discussion and press reports cited in Daniel Aguirre, THE HUMAN RIGHT TO
DEVELOPMENT IN A GLOBALIZED W ORLD (Ashgate Publishing, Oct 2008) at pp 163-170. See also
Investment Court, Free Trade Agreements, and Bilateral Investment Treaties have Unleashed a
New Era of C -13, available at:
http://www.ips-dc.org/reports/070430-challengingcorporateinvestorrule.pdf; IIA Insig
http://www.iisd.org/pdf/2007/iia_insighter_issue_2.pdf.
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132
by conducting the present proceedings in accordance with the de jure82 and de
facto83 presumptions of openness and cooperation that have come to
characterise South African society since the fall of apartheid.
7.6 In the words of Chief Justice Langa of the Constitutional Court of South Africa:
public are able to attend all hearings. The press are also
entitled to be there, and are able to report as extensively as
Courts should in principle welcome public exposure of their

work in the courtroom, subject of course to their obligation to
ensure that proceedings are fair. The foundational constitutional
values of accountability, responsiveness and openness apply to
the functioning of the judiciary as much as to other branches of
government. The values underpin both the right to a fair trial
and the right to a public hearing (i.e. the principle of open
courtrooms). The public is entitled to know exactly how the
judiciary works and to be reassured that it always functions
within the terms of the law and according to the time-honoured
standards of independence, integrity, impartiality and
84
The Petitioners respectfully submit that the same reasoning applies to any
proceeding, including arbitral proceedings, in which the obligations of the state
and its regulatory space under public international law fall to be determined. This
is particularly so in cases such as the present one, where important human rights
and other public interests may be affected by the outcome of the proceeding.
7.7 For all of these reasons, the Petitioners request that the Tribunal grant their
request to attend and present key submissions in respect of their important public
interest concerns at the oral hearings. The Petitioners have simultaneously sent
82
On the legal requirements of openness, accountability, and democratic participation in the
South African context, see eg sections 1, 32, 39, 41, 59, 72, 81, 101, 118, 181, 184, 187, and 195
of the South African Constitution.
83
The Petitioners gratefully acknowledge the Cla
arbitration request as an example of such cooperation. See above n 1.
84
South African Broadcasting Corporation Limited v National Director of Public Prosecutions and
Others 2007 (1) SA 523 (CC) (per Langa CJ et al) at paras 31 and 32.
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133
letters to the Parties asking that they not object to this request.85 The Petitioners
emphasise that they are all recognised professionals in their fields, and
consequently no special arrangement is necessary to ensure safety or to prevent
potential disruption of the proceedings.
7.8 In the alternative, in the event that one or more Parties objects to the
presentation of submissions by the Petitioners at the hearings, the Petitioners
request that the Tribunal at least allow the Petitioners to attend the hearings as
observers86 and that it also consider opening the hearings to the public,87
potentially via a webcasting of the proceedings as was recently done in the Abyei
matter conducted before the Permanent Court of Arbitration.88 Again, the
Petitioners have, in letters to the Parties, respectfully asked that the Parties make
no objection to these requests. The Petitioners point to the above-described
experience of NAFTA investor-state tribunals as evidence that public hearings
can be conducted without disruption.89
85
Unless one of the Parties objects, the Petitioners submit that the Tribunal may grant this
request in terms of its powers under Articles 27 and 35 of the AF Rules as described in para 6.1
above.
86
In this regard, the Petitioners note that there has never been a recorded instance of non-
disputing party petitioners disrupting or otherwise hindering the efficient functioning of any arbitral
hearing conducted pursuant to the North American Free Trade Agreement, nor in any hearing
before a WTO dispute settlement body.
87
The Petitioners are mindful that they cannot claim to represent the entire spectrum of
individuals and civil society organisations which might have an interest in attending the hearings.
For this reason, the Petitioners submit that it would be appropriate for the Tribunal to open the
hearings to the public generally.
88
Government of Sudan v the Sudan People’s Liberation Movement/Army (Abyei Arbitration)
(PCA), pleadings and oral hearings av
http://www.pca-cpa.org/showpage.asp?pag_id=1318. The Petitioners submit that Articles 27 and
35 of the AF Rules empower the Tribunal to authorise public hearings and/or public broadcasts of
the hearings in such a way as to preserve the fairness and integrity of the proceedings. The
authority of courts and tribunals to allow and regulate media broadcastings of proceedings has
also been recognised under South African law. See South African Broadcasting Corp Ltd v
National Director of Public Prosecutions and Others 2007 (1) SA 523 (CC) (2007 (1) SACR 408;
2007 (2) BCLR 167) (discussing the discretion of courts to regulate their own processes
regarding the broadcasting of proceedings by the media).
89
Consider eg the publicly conducted hearings in the Methanex matter, above n 3, which were
e to Methanex
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134
7.9 Finally, in the event that one or more P -
participatory attendance at the oral hearings -participatory
observance thereof, the Petitioners ask the Tribunal to reserve its right to request
written clarification from the Petitioners concerning their written submissions
should the Tribunal deem this necessary.
7.10 The Petitioners submit that it would be appropriate for the Tribunal, in the
interests of a just and fair resolution of the dispute, and in order to facilitate the
-making in respect of the complex interplay between national
and international interests raised therein, to grant the Petitioners requests to the
maximum extent of its jurisdiction.
8. SUMMARY OF THE PETITION AND ORDERS SOUGHT
8.1 In view of the foregoing, the Petitioners respectfully request that the Tribunal
grant the Petitioners:
8.1.1 Leave to file a written submission concerning matters within the scope of
the dispute, as outlined in Parts 4 and 5 above;
8.1.2 Access to the specific arbitral documents indicated in Part 6 above, for the
purpose of enabling useful, unique, and well-informed submissions by the
Petitioners; and
8.1.3 Absent any objection by the Parties, permission to attend and present the
in the alternative, to attend and/or observe the oral hearings.
Respectfully submitted on behalf of:
THE CENTRE FOR APPLIED LEGAL STUDIES

THE CENTER FOR INTERNATIONAL ENVIRONMENTAL LAW
THE INTERNATIONAL CENTRE FOR THE LEGAL PROTECTION OF HUMAN RIGHTS
THE LEGAL RESOURCES CENTRE
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135
SIGNED and DATED at OXFORD this 17th day of JULY 2009
Original signed by Jason Brickhill

Coordinating Attorney
Legal Resources Centre
9th Floor, Bram Fischer House
25 Rissik Street
Johannesburg 2000
Republic of South Africa
Tel: +27 (11) 836-9831
Fax: +27 (11) 834-4273
Email: jasonb@lrc.org.za
Reference: Mr Jason Brickhill
ALSO SIGNED BY
Mr Marcos Orellana Dr Jackie Dugard

Director, Trade & Sustainable Senior Researcher
Development Program Centre for Applied Legal Studies
Center for International Environmental University of the Witwatersrand
Law Private Bag 3, PO Wits 2050
1350 Connecticut Ave., N.W., Suite 1100 Johannesburg
Washington, DC 20036, USA Republic of South Africa
Tel.: +001 (202) 742-5847 Tel: +27 (11) 717-8600
Fax: +001 (202) 785-8701 Fax: +27 (11) 717-1702
Email: morellana@ciel.org Email: jackie.dugard@wits.ac.za
Reference: Mr Marcos Orellana Reference: CALS / J Dugard / Piero
Foresti
Mr Iain Byrne
Senior Lawyer
International Centre for the Legal
Protection of Human Rights
Lancaster House
33 Islington High Stree
London N1 9LH
United Kingdom
Tel: +44 (20) 7278 3230
Fax: +44 (20) 7278 4334
Email: IByrne@interights.org
Reference: Mr Iain Byrne / Piero Foresti
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136
ANNEXURE A: DETAILED DESCRIPTION OF THE PETITIONERS
The Centre for Applied Legal Studies
The Centre for Applied Legal Studies (CALS) is an independent research, advocacy and
public interest litigation organisation committed to promoting democracy, justice and equality
ession and
discrimination. In all of its activities, CALS works toward the realisation of human rights for all
South Africans under a just constitutional and legal order. CALS pursues these goals
through: undertaking rigorous research, writing, analysis and briefings; teaching and
providing public education and training; the collection and dissemination of information and
publications; participation in policy formulation, law reform, dispute resolution and institutional
development and coordination; and the provision of legal advice and public interest litigation
services.
CALS was founded by Professor John Dugard in 1978 as an applied research centre within
the Faculty of Law at the University of the Witwatersrand. It started with three staff members
at a time when public interest law groups did not exist in South Africa. During the apartheid
years, CALS was a pioneer in promoting human rights through research, education, public
impact litigation and extra-curial mediation.
In the early 1990s, when the African National Congress and other prohibited political parties
the process of building and consolidating democracy in South Africa. CALS staff members
participated in the writing of the new Constitution through submissions and testimony before
the Constitutional drafting assembly. CALS also intervened as amicus curiae in many early
constitutional cases under the interim and final South African Constitutions, including
landmark cases on the death penalty and equality.
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137
Around the same time, CALS launched several targeted research programmes focusing on
key areas of human rights, including the Aids Law Project (1993);90 the Gender Research
Programme (1992); the Land Rights Research Programme (1991); and the Law and
Transformation Programme (2001).
Environmental Law Programme, Justice Programme and Local Government Programme,
have successfully built upon these earlier efforts and have greatly extended
involvement in advancing the rights and public interest concerns of South Africans.
has generated a renewed emphasis on

litigation and advocacy in the area of socio-economic rights, particularly concerning laws and
policies designed to redress past legacies of racial discrimination, including the historical
misappropriation of national resources. CALS continues to intervene regularly as amicus
curiae before the domestic courts of South Africa.
CALS is a grant-funded organisation that is part of the University of the Witwatersrand in

Johannesburg. The University is a juristic person and a tertiary education institution
registered in terms of the Higher Education Act No 101 of 1997, as amended by Section 25
of the Higher Education Amendment Act No 23 of 2001
have been approved by the Vice-Chancellor of the University in terms of its rules, policies and
procedures.91
CALS originally received seed funding from the Ford Foundation, the Carnegie Corporation
University and financial support from donor organisations around the world, including the
Ford Foundation, the Norwegian Centre for Human Rights and the Royal Netherlands
Embassy. CALS retains full control over the content of its work and projects, regardless of
funding source.
90
This Project was eventually spun out into a separate, independent organisation and is therefore
no longer part of CALS.
91
Because of its institutional affiliation with the University of the Witwatersrand, the legal
personality of CALS derives from that of the University. CALS therefore routinely obtains the
consent of the University to all of its litigation efforts. Such consent has been granted in this
case.
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138
Dr Jackie Dugard is a senior researcher at CALS, focusing on socio-economic rights,
distributional justice, and access to justice for the poor. She will act as the instructing
representative for CALS. Dr Dugard has published numerous articles and papers on issues
direct
litigation and amicus interventions.
Further information on CALS can be obtained at: http://www.law.wits.ac.za/cals.
The Center for International Environmental Law
The Center for International Environmental Law (CIEL) is a registered 501(c)(3) non-profit
organisation under the laws of the United States of America and the regulations of the US
Internal Revenue Service. It is incorporated as such in Washington, District of Columbia.
CIEL has offices in Washington, DC and Geneva working to provide legal support to persons
and civil society organisations around the world.
CIEL is not a membership-based organisation but an independent, non-governmental

organisation
the environment, human health and human rights, seeking to create a just and sustainable
world. Founded in 1989, CIEL plays a key leadership role in establishing a firm foundation of
legal analysis to strengthen progressive efforts by civil society globally.
CIEL provides a wide range of services to clients and partners, including legal counsel,
analysis, policy research, advocacy, education, training, and capacity building. The primary
focus of this work is with developing country governments and civil society groups. CIEL staff
are well-trained in international, common and civil law systems, come from five continents,
are of different cultural and religious backgrounds and have broad legal perspectives due,
inter alia, to their diverse backgrounds and training. Most have international law experience
working with their home governments as well.
and Sustainable Development Program seeks to reform the global framework

of economic law in order to promote human development and a healthy environment. CIEL
has been engaged in international trade and investment law issues since the early 1990s.
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139
For example, CIEL participated in the first investor-state arbitration in which amicus
submissions were allowed, Methanex Corp v United States,92 as well as in amicus
submissions in the ICSID matters of Suez et al v Argentina93 and Biwater v Tanzania.94
cus submissions were expressly cited with approval by the tribunals in both the
Methanex and Biwater cases.95 CIEL also prompted the World Trade Organisation's
Appellate Body to recognise its authority to consider amicus curiae briefs from civil society
groups in the landmark Shrimp/Turtle case.96
between international environmental law and human rights law and to promote a more just,
equitable and sustainable approach to development and natural resource management.
CIEL has represented indigenous peoples and other local communities before human rights
bodies in cases involving mining, extractive industries, and threats of forceful displacement.
CIEL also has experience intervening as amicus curiae before the Inter-American Court of
Human Rights.
CIEL and its staff have published a number of papers and books on international trade law
and international investment law.97 CIEL also recently co-organised a conference on human
rights issues arising out of investor-state arbitrations with the American University
Washington College of Law and has presented papers on the human rights and investment
.
including the Charles Stewart Mott Foundation, the Rockefeller Foundation and the Ford
92
Methanex Final Award, above n 3.
93
See Aguas Argentinas Amicus Order, above n 4.
94
Biwater Final Award, above n 5.
95
Methanex Final Award, above n 3, at page 13, para 27; Biwater Final Award above n 5, at para
392. Note that the tribunal in the Aguas Argentinas case has not yet issued a final award.
96
See United States – Import Prohibition of Certain Shrimp and Shrimp Products,
WT/DS58/AB/R, Report of the Appellate Body (Oct. 12, 1998).
97
Science, Risk and Uncertainty: Public Health Measures and
Investment Disciplines in New Aspects of International Investment Law (Colloquies/Workshops
of the Hague Academy 2007); Fresh Water and International Economic Law (Oxford University
Press, 2005) and Trade and Environment: A Guide to WTO Jurisprudence (Earthscan, 2005).
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140
Foundation, as well as governments and intergovernmental and non-governmental
organisations.
the Rausing Trust and the Moriah Fund. CIEL retains full control over the content of its work
and projects, regardless of funding source.
Marcos Orellana is a seni

Trade and Sustainable Development Program, and an adjunct professor at the Washington
College of Law, where he teaches courses related to investment and human rights law. He
will act as instructing attorney for CIEL. He is an experienced international lawyer and
academic and has previously been involved in amicus submissions in investment and trade
law cases.
More information on CIEL can be found at www.ciel.org.
The International Centre for the Legal Protection of Human Rights (INTERIGHTS)
INTERIGHTS is an independent international human rights law centre. It was established in

1982 and is based in London. It works to promote the effective realisation of international
human rights standards through law. To this end, INTERIGHTS provides advice on the use
of international and comparative law, assists lawyers in bringing cases to international human
rights bodies, disseminates information on international and comparative human rights law,
and undertakes capacity building activities for lawyers and judges.
In additional to regional programmes in Africa and Europe, INTERIGHTS has strategic

thematic programmes which focus specifically on the issues at stake in the present case,
namely equality and non-discrimination, economic and social rights, and security and the rule
of law. A critical aspect of I work involves conducting strategic litigation on
these issues in a broad range of international, regional and national fora. This includes the
selective filing of third party interventions before various courts and tribunals on points of law
that are of key importance to human rights protection and on which its knowledge of
international and comparat
INTERIGHTS has litigated before a range of adjudicative bodies concerning a variety of

human rights issues, including those relating to equality and non-discrimination, economic
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141
and social rights, and the relationship between human rights and other legal norms. These
bodies include the UN Human Rights Committee, the European Court of Human Rights, the
European Committee on Social Rights,
Rights, the Court of the Economic Community of West African States and the Inter-American
Court and Commission on Human Rights.
INTERIGHTS holds consultative status with the

Council, the Council of Europe, and the .
It is accredited with the Commonwealth Secretariat and is authorised to present collective
complaints under the European Social Charter.
INTERIGHTS receives funding from a variety of donors, including foundations, governmental

development agencies, and private law firms. Major funders over the past five years have
included the John D. and Catherine T. MacArthur Foundation, the Ford Foundation, the Open
Society Institute, the Swedish International Development Cooperation Agency, the UK
Foreign and Commonwealth Office, and others. A complete list of funders is available upon
request. During the last financial year for which accounts are available, no single funder
INTERIGHTS maintains full control
over the content of its work and programmes regardless of funding source.
litigation work
on economic and social rights. He has litigated widely in domestic tribunals across the
Commonwealth and has participated in litigation and advocacy efforts before the European
Committee of Social Rights, the European Court of Human Rights and the UN Human Rights
Committee. Since 2000, Mr Byrne has been a Fellow of the Human Rights Centre,
University of Essex, where he also teaches LLM and MA courses focusing on economic,
social and cultural rights. He has lectured widely in the UK and abroad and has conducted
training courses for the United Nations, Amnesty International and the British Council in
Europe, Latin America, Africa, South Asia and the Pacific. Mr Byrne has authored numerous
articles, papers and books on human rights and democracy issues.98 He will serve as
instructing attorney for INTERIGHTS.
98
These include: The Human Rights of Street Children: A Practical Manual for Advocates;
Blackstone's Human Rights Digest with Keir Starmer QC; Democracy Under Blair: A Democratic
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142
More information on INTERIGHTS is available at: www.interights.org.
The Legal Resources Centre
Established in 1979, the Legal Resources Centre (LRC) is a South African human rights
organisation that seeks to use the law as an instrument of justice for the vulnerable and
marginalised, including poor, homeless, and landless people and communities who suffer
discrimination by reason of race, class, gender, disability or by reason of social, economic,
and historical circumstances. The LRC promotes the Sout
substantive equality across all facets of South African society. It seeks to contribute to the
development of a progressive human rights jurisprudence and to the social and economic
transformation of society.
The LRC essentially functions as an independent law clinic that seeks creative and effective
solutions for its clients by employing a range of strategies, including impact litigation, law
reform, participation in partnerships and development processes, and education and
networking within and outside South Africa.
In pursuit of its organisational goals, the LRC has served as the legal representative to
marginalised persons and groups whose rights have been violated in many human rights
related cases within the South African courts. It has also represented amicus petitioners in
numerous domestic cases99 and has previously participated in regional advocacy work in the
Audit of the UK with Stuart Weir et al; and, most recently, Unequal Britain: an Economic and
Social Rights Audit of the UK with Stuart Weir et al.
99
It should be noted that the South African legal system maintains a divide between attorneys
and advocates. Attorneys provide legal counsel to clients in routine non-court-related legal
transactions and are regulated by the Law Society of South Africa. Except in limited
circumstances, attorneys are not entitled to appear before the courts. Advocates, on the other
hand, appear on behalf of parties and third-party interveners including amicus petitioners
before the South African courts and are regulated by the General Council of the Bar of South
Africa and their constituent Bars in the Provinces in which they are based. Thus, even where a
petitioning amicus organisation is itself composed primarily of lawyers, it is quite usual in the
South African context for an outside advocate to appear on behalf of the amicus petitioner. In
keeping with the South African practice, the advocates that have been briefed to assist the
Petitioners here are Geoff Budlender, SC and Max du Plessis. In addition, Julie Maupin, an
American lawyer, has been retained as an independent legal consultant in respect of international
investment law issues.
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143
status, and as a member of the Coalition for an Effective African Court.
including: land, social security, housing and planning, environment, children, women,
refugees, civil society, the Constitution and the rule of law, continental outreach, and access
to justice. The LRC currently employs more than 65 lawyers and staff who work across these
issue areas in its four regional offices in Johannesburg, Durban, Grahamstown and Cape
Town, and in its Constitutional Litigation Unit, which is based in Johannesburg.
Since 2007 the LRC has become increasingly involved in education and advocacy efforts
This
which human rights have been directly or indirectly impacted by investor-state arbitration
awards. Concerned that such awards might in future inhibit the South Africa
ability to carry out its constitutional mandate to implement key societal transformation
measures and redress the legacy of apartheid, the LRC has invested in training dedicated
staff members to work on human rights issues arising out of international investment treaties.
These LRC attorneys have participated in several conferences and workshops on human
rights and international investment law.
The LRC has been proactive in assembling the present coalition of Petitioners and
coordinating their efforts in respect of this Petition. Given its deep expertise in all areas of
public interest litigation within South Africa and its vast experience representing amicus
petitioners before various courts and tribunals, the LRC will act as coordinating counsel for
the Petitioners collectively.100
The LRC is a tax-exempt, non-profit organisation constituted in terms of Section 21 of the

South African Companies Act. It receives regular funding from the Legal Assistance Trust, a
British charitable trust, and the Southern Africa Legal Services Foundation, an American
charitable organisation. The LRC also receives financial support from individual donors via
its website and on a project-by-project basis from numerous other foundations and trusts. A
100
See ibid on the attorney/advocate divide within South African legal culture.
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144
complet
involvement in education, advocacy and litigation efforts concerning human rights issues
y
receives financial support from the Norwegian Centre for Human Rights. The LRC maintains
full control over the content of its work and projects, regardless of funding source.
Steve , and Jason
They will act as instructing attorneys for the LRC. In addition, they will take instructions from
the designated CIEL, CALS and INTERIGHTS representatives and will act as coordinating
on the realisation of socio-economic rights and constitutional transformation imperatives on

as often acted for amici curiae in cases before the
Constitutional Court of South Africa. Mr Brickhill has particular experience in constitutional
rights litigation in the South African courts, including the Constitutional Court. He has
published several articles and contributed to books and other publications in the field of South
African constitutional law.
More information on the LRC can be found at www.lrc.org.za.
Individual and collective undertakings of the Petitioners

Individually and collectively, the Petitioners and their representatives hereby attest and
affirm that they have no relationship, direct or indirect, with any party or any third party to
this dispute which might give rise to any conflict of interest. The Petitioners have not
received any assistance, financial or otherwise, from a party or a third party to this
dispute in the preparation of this Petition. They will not receive any such assistance in
the preparation of their non-disputing party submissions should this Petition be accepted
by the Tribunal.
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145
146
Chapter 19
CONFIDENTIALITY
Michael Pryles
Within the last decade confidentiality has become an important

topic in arbitration. Many articles have been written and analyses
undertaken. Common assumptions have been questioned and it is
apparent the subject is more complex, obscure and less well settled
than previously thought. Until the current flurry of activity,
confidentiality was the subject of assumptions rather than established
legal principles and rules. Moreover these assumptions were vague
and general in nature and did not adequately address the different
facets of confidentiality.
What has been the cause of the current flurry of activity on
confidentiality? The answer is simple and is predicated on two
factors. The first is the perceived existence and importance of
confidentiality to arbitration, and in particular international
arbitration. The second is a decision of the High Court of Australia
in 1995 which disturbed the status quo.
As to the first factor, it is trite to note that confidentiality is often
given as one of the reasons for choosing arbitration as a means of
dispute resolution in contrast to litigation. This is well illustrated by
the study of Dr. Christian B hring-Uhle.1 Dr. B hring-Uhle
conducted an empirical study from November 1991 to June 1992.
His survey sought to collect data from participants in international
commercial arbitration as to the advantages and disadvantages of this
method of dispute resolution. Dr. B hring-Uhle collected his data
by way of questionnaires and personal interviews. The respondents
resided in the United States, Europe, the Middle East and Australia.
1B hring-Uhle, Arbitration and Mediation in International Business, Kluwer

Law International, 1996.
415
147
416 LEADING ARBITRATORS’ GUIDE
Dr. B hring-Uhle's questionnaire listed 11 advantages of arbitration

which comprised: neutral forum, international enforcement by treaty,
confidential procedure, expertise of the tribunal, lack of appeal,
limited discovery, speed, more amicable, greater degree of voluntary
compliance, less costly procedure and more predictable results. His
survey shows that the third most important reason for choosing
arbitration is its confidential procedure. This rated very highly and
was just below “neutrality of the forum” and “international
enforcement by treaty.” Over 60% of the respondents considered
confidentiality to be either “highly relevant” or “significant.”
Likewise, Hans Bagner notes that a statistical survey of United States
and European users of international commercial arbitration
conducted in 1992 for the London Court of International Arbitration
by the London Business School listed confidentiality as the most
important perceived benefit.2
The case which did much to undermine common assumptions
and open up the whole question of confidentiality is the decision of
the High Court of Australia in Esso Australia Resources Ltd v. Plowman.3
The High Court is the most senior court in Australia and possesses
appellate jurisdiction from inferior federal courts and the State and
Territorial courts, as well as certain original jurisdiction. In Esso
Australia, the High Court, in a divided opinion, declined to recognize
a broad obligation of confidentiality applying to all documents and
information provided in and for the purposes of an arbitration. This
decision will be examined in greater detail below.
This chapter is divided into two parts. Part A examines two
different views on confidentiality espoused by the High Court of
Australia and the English Court of Appeal. Part B comprises a
broader analysis and survey of confidentiality.
2 Bagner, “Confidentiality - A Fundamental Principle in International
Commercial Arbitration?” (2001) 18 Journal of International Arbitration 243.

3 (1995) 183 CLR 10. The case is also reproduced in (1995) Arbitration
International, Volume 11, No.3 at p. 235.
148
CONFIDENTIALITY 417
I. TWO VIEWS ON CONFIDENTIALITY
A. The High Court Decision in Esso Australia
(1) The Facts
Esso Australia Resources Ltd and BHP Petroleum (North West

Shelf) Pty Ltd (“Esso/BHP”) were vendors of natural gas under
agreements to sell to two utilities in the State of Victoria, Australia,
namely the Gas & Fuel Corporation of Victoria (“GFC”) and the
State Electricity Commission of Victoria (“SEC”).4 Each of the sale
agreements contained a clause whereby the price payable for the gas
sold was to be adjusted by taking into account changes relating to
royalties and taxes attributable to the production or supply of gas.
Clause 12.8 of the GFC Sales Agreement provided:
Any such increases or decreases shall be effective upon the

imposition thereof. In the event of any such increase or decrease
Sellers shall provide Buyer with details of the increase or decrease
and the method and distribution of such royalties, taxes, rates,
duties or levies.
Clause 19.5 of the SEC Sales Agreement was in similar terms. In

November 1991 Esso/BHP sought from GFC and SEC an increase
in the price of gas supplied to them since 1 July 1990, the increase
being attributable to the imposition of a new (federal) tax, the
“Petroleum Resource Rent Tax,” which was imposed from that date
following the ambulation of a royalty previously payable by the
vendor on gas produced. GFC and SEC refused to pay. Pursuant to
arbitration clauses in the Sales Agreements, Esso/BHP referred the
disputes to arbitration.
Prior to referring the disputes to arbitration, Esso/BHP failed to
provide GFC and SEC with the information required by clauses 12.8
4It is coincidence that the writer was a member of the last board of GFC and
was also a member of the Advisory Board of SEC.
149
and 19.5 of their respective sales agreements. However, it was

anticipated that this information would be provided during the
course of the arbitration.
Mr. Plowman, the Minister for Energy and Minerals of the State
of Victoria, wished to have access to this information. He brought
an action against Esso/BHP and GFC and SEC seeking a declaration
that the information was not confidential and could be disclosed to
the Minister and third parties. It should be pointed out that SEC was
a statutory corporation, owned by the State, and GFC was a
company, largely owned by the State. Both were in effect fully or
partially state-owned utilities. For their part, Esso/BHP declined to
give details pursuant to clauses 12.8 and 19.5 unless GFC and SEC
entered into agreements that they would not disclose the information
to anyone else including the Minister, the Executive Government and
the people of Victoria. Esso/BHP asserted that the details were
commercially sensitive. However the Executive Government of the
State of Victoria wanted the details and claimed that, if GFC and
SEC obtained them, GFC and SEC were under a statutory duty to
pass them on.
The primary judge held that under clauses 12.8 and 19.5,
Esso/BHP were obliged to furnish details of the increases sought
under those provisions. The judge ordered that the details be
provided to GFC and SEC respectively and refused an application by
Esso/BHP that the furnishing of those details be stayed until the
utilities entered into a confidentiality agreement.
The primary Judge then directed his attention to questions
concerning the privacy of the arbitration and confidentiality. The
first question was whether strangers could attend the arbitration
hearings without the consent of the parties. The second question
was whether a party was at liberty to disclose information imparted to
it in the course of the arbitration. The third question was whether
GFC and SEC were at liberty to disclose information provided
pursuant to clauses 12.8 and 19.5. The primary Judge concluded that
“the mere fact that the parties to a dispute agree impliedly or
expressly to have it arbitrated in private does not import any legal or
equitable obligation not to disclose to third parties any information at
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all which may be said to have been obtained by virtue or in the

course of the arbitration.” He said that there was no general legal or
equitable obligation applicable to private arbitration which precluded
a party to arbitration from using information obtained in the course
of it except for the purposes of the arbitration. The primary Judge
therefore granted the declarations sought by the Minister. An appeal
was taken to the Appeal Division of the Supreme Court of Victoria.
It left the primary Judge’s essential declarations in place. A further
appeal was taken to the High Court of Australia. The High Court by
a majority of four Justices to one in essence upheld the views
espoused by the lower courts and held that there was no general
over-riding principle of confidentiality which attached to documents
disclosed in an arbitration. The leading judgment was given by Chief
Justice Mason with whom Justices Brennan, Dawson and McHugh
agreed in whole or in part.
(2) Privacy
The first matter Chief Justice Mason addressed was the privacy of
arbitration. He observed that it is well settled that when parties
submit their dispute to a private arbitral tribunal, in the absence of
some manifestation of a contrary intention, they confer upon that
tribunal a discretion as to the procedure to be adopted in reaching its
decision. Further there is no reason to doubt that an arbitrator, in
the exercise of power with respect to procedural matters, can decide
who shall be present at the hearing. However this power is not a
free-standing power but rather a power to decide who is entitled to
attend, having regard to the provisions of the relevant contract. He
then concluded:
Subject to any manifestation of a contrary intention arising from

the provisions or the nature of an agreement to submit a dispute to
arbitration, the arbitration held pursuant to the agreement is private
in the sense that it is not open to the public. One writer has
asserted that total privacy of the proceedings is one of the
advantages of arbitration. The arbitration will exclude strangers
151
from the hearing unless the parties consent to attendance by a

stranger. Persons whose presence is necessary for the proper
conduct of the arbitration are not strangers in the relevant sense.
Thus, persons claiming through or attending on behalf of the
parties, those assisting a party in the presentation of the case, and a
shorthand writer to take notes may appear. It does not matter
much whether this characteristic of privacy is an ordinary incident
of the arbitration, that is, an incident of the subject matter upon
which the parties have agreed, or whether it is an implied term of
the agreement. For the most part, the authorities refer to it as an
implied term. But, for my part, I prefer to describe the private
character of the hearing as something that inheres in the subject
matter of the agreement to submit disputes to arbitration rather
than attribute that character to an implied term. That view better
accords with the history of arbitrations.5
(3) Confidentiality
In his consideration of confidentiality the Chief Justice

commenced by noting that some writers had asserted that the
efficacy of a private arbitration would be damaged, even defeated, if
proceedings in the arbitration were made public by the disclosure of
documents relating to the arbitration. It was on this basis that the
English Court of Appeal, in Dolling-Baker v. Merrett,6 had restrained a
party to an arbitration from disclosing on discovery in a subsequent
action documents relating to the arbitration. However he noted that
in Australia and the United States there was no support in the
decided cases for the existence of such an obligation of confidence.
The Chief Justice then observed that complete confidentiality of
proceedings in an arbitration could not be achieved for many
reasons. First, no obligation of confidence attaches to witnesses who
are therefore at liberty to disclose to third parties what they know of
the proceedings. Secondly, there are various circumstances in which
an award made in an arbitration may come before a court involving
5 (1995) 183 CLR 10 at 26.

6 [1990] 1 WLR 1205.
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CONFIDENTIALITY 421
disclosure to the court by a party to the arbitration and publication of

the court proceedings. Thirdly, there are other circumstances in
which an arbitrating party must be entitled to disclose to a third party
the existence and details of the proceedings and the award. For
example, an arbitrating party may be bound under a policy of
insurance to disclose to the insurer matters involved in the arbitration
proceedings which are material to the risk insured against. Likewise
there may be mandatory obligations to comply with statutory
requirements relating to the provision of financial information by
corporations or with stock exchange requirements which would
require the disclosure of an arbitration.
Having concluded that there were some instances where
disclosure was proper, two questions arose. First, is there a legal
basis for holding that there is an obligation not to disclose?
Secondly, if so, how is the obligation to be defined and what are the
exceptions to it?
As to the first question, Chief Justice Mason observed that the
parties can secure the confidentiality of materials prepared for or
used in the arbitration and the transcripts and notes of evidence
given by inserting a provision to that effect in their arbitration
agreement. Such a contractual provision would bind the parties and
the arbitrator but not others, for example, witnesses. Absent any
express contractual provision on confidentiality, it is possible to argue
that it arises as an essential characteristic of a private arbitration but
the Chief Justice did not accept this. He observed:
Absent such a provision, it is difficult to resist the conclusion that,

historically, an agreement to arbitrate gave rise to an arbitration
which was private in the sense that strangers were not entitled to
attend the hearing. Privacy in that sense went some distance in
bringing about confidentiality because strangers were not in a
position to publish the proceedings or any part of them. That
confidentiality, though it was not grounded initially in any legal
right or obligation, was a consequential benefit or advantage
attaching to arbitration which made it an attractive mode of dispute
resolution. There is, accordingly, a case for saying that, in the
153
course of evolution, the private arbitration has advanced to the

stage where confidentiality is a characteristic or quality that inheres
in arbitration.
Despite the view taken in Dolling-Baker and subsequently by

Colman J in Hassneh Insurance, I do not consider that, in Australia,
having regard to the various matters to which I have referred, we
are justified in concluding that confidentiality is an essential
attribute of a private arbitration imposing an obligation on each
party not to disclose the proceedings or documents and
information provided in and for the purposes of the arbitration.7
Nor did Mason CJ consider that it was necessary to imply a term

of confidentiality into a contract as a matter of law or to give business
efficacy to a contract. Mason CJ continued by saying that if there
was an implied term of confidentiality there would need to be
exceptions to it which permitted disclosure. These were difficult to
formulate. Coleman J, in Hassneh Insurance Co. of Israel v. Mew,8 stated
an exception in the following terms:
If it is reasonably necessary for the establishment or protection of

an arbitrating party’s legal rights vis-à-vis a third party, in the sense
which I have described, that the award should be disclosed to that
third party in order to found a defence or as the basis for a cause of
action, so to disclose it would not be a breach of the duty of
confidence.
In the view of Mason CJ if there was an obligation of confidence

this statement of qualification seemed unduly narrow. It did not
recognize that there might be many circumstances in which third
parties and the public have a legitimate interest in knowing what has
transpired in an arbitration that would give rise to a “public interest”
exception. The precise scope of such an exception was unclear. Of
course these are matters which Mason CJ did not have to decide
7 Id. at 29-30.
8 [1993] 2 Lloyd’s Rep 243 at 249.
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CONFIDENTIALITY 423
because he concluded that absent any express contractual provision

in point there was no duty of confidentiality. However the “public
interest” considerations adverted to by Mason CJ take on increased
significance in the context of arbitrations involving States. This
matter is addressed by Kaj Hobér in Part III of his Chapter entitled
“Arbitration Involving States”.
Finally, Mason CJ did describe one incidence where
confidentiality attached to documents in an arbitration. He noted
that in litigation, in relation to documents produced by one party to
another in the course of discovery, there is an implied undertaking,
springing from the nature of discovery, by each party not to use any
document disclosed for any purpose otherwise then in relation to the
litigation in which it is disclosed. He thought this should also apply
to arbitrations. But the obligation is strictly limited. In the words of
Mason CJ:
But, consistently with the principle as it applies in court

proceedings, the obligation of confidentiality attaches only in
relation to documents which are produced by a party compulsorily
pursuant to a direction by the arbitrator. And the obligation is
necessarily subject to the public’s legitimate interest in obtaining
information about the affairs of public authorities. The existence
of this obligation does not provide a basis for the wide-ranging
obligation of confidentiality which the appellants seek to apply to
all documents and information provided in and for the purposes of
an arbitration. If the judgments in Dolling-Baker and Hassneh
Insurance are to be taken as expressing a contrary view, I do not
accept them.9
Two of the Justices who agreed with Mason CJ did not deliver
reasons of their own and simply concurred with the Chief Justice
(namely Dawson and McHugh JJ). However Brennan J who also
concurred with the Chief Justice, did deliver his own reasons. He
stated:
9 (1995) 183 CLR 10 at 33.
155
For the reasons which the Chief Justice gives, I agree that, when
one party produces documents or discloses information to an
opposing party in an arbitration that is to be heard in private, the
documents or information are not clothed with confidentiality
merely because of the privacy of the hearing. Nor does the use of
a document in such proceedings make the document confidential.
I agree also that absolute confidentiality of documents produced
and information disclosed in an arbitration is not a characteristic of
arbitrations in this country. Accordingly, a party who enters into
an arbitration agreement is not taken merely on that account to
have contracted to keep absolutely confidential all documents
produced and information disclosed to that party by another party
in the arbitration.10
Brennan J went on to express the view that an obligation of

confidentiality could not be implied although it may be express:
If a party to an arbitration agreement be under any obligation of

confidentiality, the obligation must be contractual in origin. A term
imposing an obligation of confidentiality could be expressed in an
arbitration agreement but such a term would be unusual. Nor is
such an obligation imposed by the Commercial Arbitration Act 1984
(Vict). A term is implied only where, inter alia, it is necessary to
give to the contract “such business efficacy as the parties must
have intended.” The intended business efficacy must be inferred
“from the very nature of the transaction.” The parties may not
have consciously adverted to the subject matter of the term which
is said to be implied, but implication is determined according to
their presumed intention. Obligations which, if proposed to the
parties when they entered into their contract, would not have been
accepted by both are not thereafter implied in the contract.11
Like the Chief Justice, Brennan J did imply an obligation of

confidentiality in one instance, namely for the purpose of production
or disclosure of documents. He reasoned that the duty to produce
10 Id. at 34.
11 Id. at 34.
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CONFIDENTIALITY 425
documents or disclose information to another is an invasion of a

party’s right to keep the documents and information confidential and
the burden of that duty would be increased beyond that contracted
for if there was no restriction on the other party’s freedom to
disseminate the documents and information. To give business
efficacy to the limited purpose of production or disclosure an
undertaking of confidentiality had to be implied. But Brennan J
emphasised that such an undertaking was not one of absolute
confidentiality. A number of exceptions arose:
Where a party is in possession of a document or information and is

under a duty at common law or under statute to communicate the
document or information to a third party, no contractual obligation
of confidentiality can prohibit the performance of that duty.
Moreover, a party may be under a duty, not necessarily a legal duty,
to communicate documents or information to a third party who
has an interest in the progress or outcome of the arbitration. To
take an example, it could not be supposed, in the absence of a clear
contrary indication, that a party which is a wholly owned subsidiary
of a holding company intended to keep confidential from its
holding company documents or information relating to the matter
in dispute in the arbitration. Nor could a party be taken to have
intended that it would keep confidential documents or information
which it wished to reveal for the protection of its own interests.
Nor could a party be taken to have intended that it would keep
confidential documents or information when the party has an
obligation, albeit not a legal obligation, to satisfy a public interest -
more than mere curiosity - in knowing what is contained in the
documents or information.12
He then went on to clarify the duty or obligation as follows:
I would hold that, in an arbitration agreement under which one

party is bound to produce documents or disclose information to
the other for the purposes of the arbitration and in which no other
provision for confidentiality is made, a term should be implied that
12 Id. at 35.
157
the other party will keep the documents produced and the
information disclosed confidential except (a) where disclosure of
the otherwise confidential material is under compulsion by law; (b)
where there is a duty, albeit not a legal duty, to the public to
disclose; (c) where disclosure of the material is fairly required for
the protection of the party’s legitimate interests; and (d) where
disclosure is made with the express or implied consent of the party
producing the material.13
Brennan J noted that in the instant case the Minister had a

statutory right under the State Electricity Commission Act 1958 to obtain
information from SEC. Any implied obligation of confidentiality
must be qualified accordingly. Although GFC was not subject to a
similar statutory provision, it was a public authority and the public
generally had a real interest in the outcome and perhaps in the
progress of each arbitration. Brennan J therefore concluded that
neither GFC nor SEC could be taken to have impliedly undertaken to
keep confidential from the Government or the Minister documents
or information relevant to the administration of the energy portfolio.
The implied obligation of confidentiality was qualified accordingly.
There was one dissent in Esso Australia, Toohey J. He stated that
parties agree to refer disputes to arbitration on the assumption that
the hearing will be conducted in private. The law has given effect to
this understanding in a number of ways, without any clear
recognition of it as an independent legal rule. In his view, privacy
should be implied as a term of the agreement to arbitrate, the implied
term is attached as a matter of law rather than to give business
efficacy to the agreement. Reasoning from the duty of privacy he
thought a duty of confidentiality necessarily followed. In Toohey J’s
view if there is no restraint on a party to an arbitration making public
what was said or done at an arbitration, including the contents of
documents tendered to the arbitrator, there would be little point in
excluding strangers from an arbitration. The fact that there are some
exceptions to the obligation of confidentiality does not mean that
13 Id. at 36.
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CONFIDENTIALITY 427
there is no obligation of confidentiality. He intimated that one

exception arose from the provisions of the State Electricity Commission
Act 1958 which empowered the Minister to obtain from SEC “all
documents papers and minutes which he requires either for
Parliament or himself.” There was no comparable provision in the
Gas and Fuel Corporation Act 1958. Toohey J concluded by saying:
That leaves for consideration whether, despite the qualifications

already mentioned, there is nevertheless some obligation of
confidentiality attaching to the documents and information
emanating from an arbitration. I would find such an obligation to
be a term implied as a matter of law in commercial arbitration
agreements. The term is implied from the entry by the parties into
a form of dispute resolution which they choose because of the
privacy they expect to result. If this is said to confuse privacy and
confidentiality, the answer is that they are not distinct
characteristics. As Colman J said in Hassneh:
The disclosure to a third party of [a note or transcript of

the evidence] would be almost equivalent to opening the
door of the arbitration room to that third party.
Any aspect of disclosure to third parties must infringe the privacy

of the arbitration. Thus, if one party is free to disclose to a
newspaper or media outlet the progress of an arbitration and the
evidence adduced in its course, the notion of privacy is
meaningless. There must be an underlying principle, significantly
qualified in accordance with these reasons, that a party to an
arbitration is under a duty not to disclose to a third party
documents and information obtained by reason of the arbitration.
Although it did not arise in this appeal, I agree with the Chief
Justice that there is a “public interest” exception to the principle.
But it is unnecessary and inappropriate to discuss the boundaries of
that exception.14
14 Id. at 47-48.
159
(B) The Court of Appeal decision in Ali Shipping
(1) The Facts
Earlier English authority had supported a duty of confidentiality.

After the decision of the High Court of Australia in Esso Australia,
the English Court of Appeal again considered confidentiality in a case
where neither party challenged its general existence. The decision of
the Court of Appeal is Ali Shipping Corp v. Shipyard Trogir.15 Shipyard
Trogir (“the yard”) undertook to build a number of vessels (described
as hulls 202 to 206) for various companies which were all owned or
acquired by Greenwich Holdings Ltd. Each of the separate ship
building contracts contained a London arbitration clause and was
governed by English law. The yard’s contract for hull 202 was with
Ali Shipping Corp (“Ali”) which became a party to the contract by
novation.
The yard failed to complete hull 202 in accordance with the hull
202 agreement, and Ali rescinded the contract and claimed substantial
damages. The dispute went to arbitration (the first arbitration) and
the sole arbitrator made an award in favour of Ali in the sum of
$21,594,391 plus interest. In the first arbitration, the yard sought to
defend Ali’s claims for substantial damages on a variety of bases
including the fact that the purchasers of hulls 204 to 206 had not paid
the first instalment of the price of their contracts. In this connection
the yard contended that its obligation to build hull 202 had become
contractually dependant on performance of the subsequent contracts.
It was further contended that the corporate veil should be pierced
and that all the Greenwich-owned companies should be treated as
one to permit the yard’s plea of justification and/or set-off in respect
of its claims under the hull 204 to 206 contracts. The arbitrator
rejected the yard’s arguments. Although he was satisfied that the
purchasers were in breach of the hull 204 to 206 contracts he held
that it was irrelevant to the issue of the defendant’s liability under the
hull 202 agreement.
15 [1998] 2 All ER 136 (Court of Appeal).
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CONFIDENTIALITY 429
The yard made no payment in respect of the award. Instead they

reactivated three arbitrations previously commenced against the
purchasers of hull 204 to 206. The yard applied for interim awards in
the hull 204 to 206 arbitrations in respect of the first instalments of
the contractual price under the respective ship building contracts.
The arbitrators in the hull 204 to 206 arbitrations ordered the yard to
serve all the evidence upon which it wished to rely in support of its
application for the interim awards. The yard, in an affidavit, set out
the documents upon which it wished to rely. These included certain
documents generated in the course of the first arbitration namely the
award, the written opening submission of Ali in the first arbitration
and transcripts of the oral evidence given by certain witnesses for Ali
in the first arbitration. Ali’s solicitors, who also acted for the
purchasers in the hull 204 to 206 arbitrations, sought and obtained an
ex parte injunction from the English court on the basis that the use
of the materials would amount to a breach of a yard’s implied
obligation of confidentiality in respect of the first arbitration.
The decision at first instance was given by Clarke J. Ali relied on
previous English decisions which established a duty of confidentiality
including Dolling-Baker v. Merrett,16 Hassneh Insurance17 and Insurance Co.
v. Lloyd’s Syndicate.18 Before Clarke J, the yard was prepared to
recognize that the material generated in the first arbitration was
covered by a duty or implied obligation of confidentiality but
reserved the right to argue before a higher court that English law
should follow the approach of the High Court of Australia in Esso
Australia. However, the yard argued that this case fell within
recognized exceptions to the duty. In the first place the yard argued
that in English law the document of confidentiality only applied in
respect of “third party strangers” to the arbitration and should not be
applicable in the case such as the present. The yard also asserted that
even if disclosure in the hull 204 to 206 arbitrations might otherwise
constitute a breach of duty of confidentiality owed to Ali, the
16 [1990] 1 WLR 1205.

17 Supra n. 8.
18 [1995] 1 Lloyd’s Rep 272.
161
circumstances of the case fell within a recognized exception to such

duty because disclosure was reasonably necessary for the protection
of the yard’s rights against a third party. Finally it was argued that the
circumstances of the case fell within a further exception to the rule of
confidentiality, namely public policy and/or that the facts were such
that the case was not an appropriate one for injunctive relief.
Clarke J considered the full circumstances of the case and noted
that at the relevant time all the parties were represented by Sea
Tankers Management Co Ltd (“Sea Tankers”) which was the owner
of Greenwich Holdings. Although each buyer was to be a separate
legal entity the negotiations were conducted at the same time and by
the same person for all the hulls, it being a matter of indifference
which particular companies should be the buyers of which hulls. It
followed, in the Judge’s opinion, that no term could be implied
preventing disclosure by the yard to arbitrators in a dispute with
those buyers.
(2) The Appeal
An appeal was taken to the Court of Appeal and was allowed.

On appeal Ali argued that the term of confidence in relation to
arbitration proceedings attaches as a matter of law rather than as a
matter of business efficacy. For its part, the yard argued as follows.
(1) It again accepted the existence of a duty of confidentiality

although it reserved the right to argue before the House
of Lords that the decision in Esso Australia should be
preferred.
(2) It sought to support the Judge’s approach to the implied
term of confidentiality on the basis of the “officious
bystander” test, i.e. as a matter of business efficacy, it
nature and extent being variable, according to the
circumstances of the particular case.
(3) Alternatively, if the approach of the Judge was wrong and
the implied term attaches as a matter of law rather than as
a matter of a business efficacy, then nonetheless the
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CONFIDENTIALITY 431
Judge’s decision is to be supported on the basis that no

breach of confidentiality is involved where the parties to
whom disclosure is contemplated are not in any real sense
“third party strangers.”
(4) In any event, disclosure was reasonably necessary for the
protection and enforcement of the yard’s rights in pursuit
of its claims against the purchasers of hulls 204 to 206.
In particular without being able to rely on the material
sought to be disclosed, the yard would be unable to
pursue its allegation of issue estoppel and abuse of
process before the arbitrators, it would be hindered in
demonstrating that the purported defences raised in the
current arbitrations are without merit and it would be
hindered in defending the application to dismiss for want
of prosecution.
(5) It would be contrary to the public interest to permit Ali to
suppress evidence given in the first arbitration by the very
persons whose evidence will be relied upon in the current
arbitrations when any material alterations in their
testimony should be before the arbitrators in their truth-
seeking exercise.
(6) Ali, as a single purpose, no-ship company in the same
beneficial ownership as the respondents, has no legitimate
interest in restraining the disclosure of the disputed
material.
Potter LJ, in the Court of Appeal, proceeded to deal with each of

the yard’s submissions in order.
(3) The Nature of the Implied Term
Potter LJ considered the yard’s submissions (1) and (2) together.

He rejected the notion that confidentiality arose from an implied
term necessary to give business efficacy to a particular contract. That
required an examination, which Clarke J had carried out, into the
163
facts and circumstances of the particular case. Rather Potter LJ

considered that the implied term arose as a matter of law. He stated:
I consider that the implied term ought properly to be regarded as

attaching as a matter of law. It seems to me that, in holding as a
matter of principle that the obligation of confidentiality (whatever
its precise limits) arises as an essential corollary of the privacy of
arbitration proceedings, the court is propounding a term which
arises “as the nature of the contract itself implicitly requires.19
Thus it was not necessary to inquire whether, in the particular

circumstances of the case, an obligation of confidentiality arose in
order to give business efficacy to a particular contract. The
obligation existed as a matter of law and it was simply a matter of
inquiring whether the case fell within any of the established
exceptions to the obligation. Potter LJ dwelt on these at some length
and it is worthwhile reproducing what he said in full. He stated:
As to those exceptions, it seems to me that, on the basis of present

decisions, English law has recognised the following exceptions to
the broad rule of confidentiality: (i) consent, ie where disclosure is
made with the express or implied consent of the party who
originally produced the material; (ii) order of the court, an obvious
example of which is an order for disclosure of documents
generated by an arbitration for the purposes of a later court action;
(iii) leave of the court. It is the practical scope of this exception, ie
the grounds on which such leave will be granted, which gives rise
to difficulty. However, on the analogy of the implied obligation of
secrecy between banker and customer, leave will be given in respect
of (iv) disclosure when, and to the extent to which, it is reasonably
necessary for the protection of the legitimate interests of an
arbitrating party. In this context, that means reasonably necessary
for the establishment or protection of an arbitrating party’s legal
rights vis-à-vis a third party in order to found a cause of action
against that third party or to defend a claim (or counterclaim)
brought by the third party (see the Hassneh case).
19 Id. at 146.
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CONFIDENTIALITY 433
In that connection, I make two particular observations.

Although to date this exception has been held applicable only to
disclosure of an award, it is clear (and indeed the parties do not
dispute) that the principle covers also pleadings, written
submissions, and the proofs of witnesses as well as transcripts and
notes of the evidence given in the arbitration (see Dolling-Baker’s
case). Second, I do not think it is helpful or desirable to seek to
confine the exception more narrowly than one of “reasonable
necessity.” While I would endorse the observations of Colman J in
the Insurance Co case [1995] 1 Lloyd’s Rep 272 at 275 that it is not
enough that an award or reasons might have a commercially
persuasive impact on the third party to whom they are disclosed,
nor that their disclosure would be “merely helpful, as distinct from
necessary, for the protection of such rights,” I would not detach
the word “reasonably” from the word “necessary,” as the passage
just quoted appears to do. When the concept of “reasonable
necessity” comes into play in relation to the enforcement or
protection of a party’s legal rights, it seems to me to require a
degree of flexibility in the court’s approach. For instance, in
reaching its decision, the court should not require the parties
seeking disclosure to prove necessity regardless of difficulty or
expense. It should approach the matter in the round, taking
account of the nature and purpose of the proceedings for which
the material is required, the powers and procedures of the tribunal
in which the proceedings are being conducted, the issues to which
the evidence or information sought is directed and the practicality
and expense of obtaining such evidence or information elsewhere.
Finally, in at least one decision, the English court has
tentatively recognised a further exception (v) where the “public
interest” requires disclosure: see London and Leeds Estates Ltd v
Paribas Ltd (No 2) [1995] 1 EGLR 102. In that case Mance J, ruling
upon the validity of a subpoena, held that a party to court
proceedings was entitled to call for the proof of an expert witness
in a previous arbitration in a situation where it appeared that the
views expressed by him in that proof were at odds with his views as
expressed in the court proceedings. Mance J observed (at 109):
If a witness were proved to have expressed himself in a

materially different sense when acting for different sides,
165
that would be a factor which should be brought out in the

interests of individual litigants involved and in the public
interest.
It seems to me clear that, in the context, Mance J was referring to

the “public interest” in the sense of “the interests of justice,”
namely the importance of a judicial decision being reached upon
the basis of the truthful or accurate evidence of the witness
concerned. Whereas the issue in the Paribas case related to a matter
of expert opinion rather than objective fact, I see no reason why
such a principle, which I would approve, should not equally apply
to witnesses of fact who may be demonstrated to have given a
materially different version of events upon a previous occasion. As
a matter of terminology, I would prefer to recognise such an
exception under the heading “the interests of justice” rather than
“the public interest,” in order to avoid the suggestion that use of
that latter phrase is to be read as extending to the wider issues of
public interest contested in the Esso Australia case. In that case,
only the dissenting judgment of Toohey J appears to me to treat
the law of privacy and confidentiality in relation to arbitration
proceedings on line similar to English law. While it may well fall to
the English court at a future time to consider some further
exception to the general rule of confidentiality based on wider
considerations of public interest, it is not necessary to do so in this
case.20
(4) Third Party Strangers
Next Potter LJ considered whether a further exception should be

created to the confidentiality rule where the parties to whom
disclosure is contemplated are in the same beneficial ownership and
management as the complaining party. He concluded that no such
exception should be created for two reasons. First, whatever the
position in the instant case, it is possible to envisage a situation
where, despite the feature of common beneficial ownership between
them, one entity may wish to keep private from another the details of
20 Id. at 147-148.
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CONFIDENTIALITY 435
materials generated in an earlier arbitration. Secondly, where the

problem arises in relation to disclosure in later proceedings, to
propound such an exception is to leave out of account that the real
interest of the objecting party is to withhold disclosure of such
materials from the subsequent decision maker. Potter LJ went on to
observe that the fact that the arbitrator in the subsequent proceedings
will in turn be bound by duties of confidentiality is no cure for the
damage which the objecting parties perceives may be cause to his
interests from an adverse decision resulting from, or influenced by,
the disclosure sought to be made.
(5) Reasonable Necessity
In order to come within the exception of “reasonable necessity,”

Potter LJ considered it necessary for the yard to show that the use of
the documents was reasonably necessary for the protection or
enforcement of the yard’s rights in relation to the hull 204 to 206
arbitrations. The yard sought to come within the exception on two
bases. The first was issue estoppel. It asserted that it wished to plead
issue estoppel in respect of certain findings made in the first
arbitration. This was rejected by Potter LJ on the basis that the
parties in the hull 204 to 206 arbitrations were not the same as those
in the first arbitration. The yard also sought to come within the
exception of “reasonable necessity” on the basis that the documents
in the first arbitration were needed to demonstrate that the defences
raised were without merit. This was also rejected on the basis that
the same witnesses who were called in the first arbitration could be
called to give evidence in the hull 204 to 206 arbitrations. Potter LJ
ventured the opinion that in the absence of agreement between the
parties, convenience and good sense were not in themselves
sufficient to satisfy the test of “reasonable necessity.” The Judge also
observed that while the yard understandably sought to obtain interim
awards in respect of payments which on the face of them were due,
an arbitrator did not, without the consent of the parties, have power
similar to the High Court under Order 14.
167
Potter LJ concluded by deciding that the yard should be subject

to a final injunction restraining it from employing in the hull 204 to
206 arbitrations the material generated in the course of the first
injunction. However the yard was given liberty to seek exemption
from its terms in certain circumstances including the situation, should
it arise, where any witness for the owners of hulls 202 to 204 was to
give evidence inconsistence in some relevant respects with evidence
which the witness gave in the first arbitration.
Brooke and Beldam LJJ agreed with the opinion of Potter LJ. In
the end result the appeal was allowed.
(6) Subsequent Citation
In Associated Electric & Gas Insurance Services Ltd v. European

Reinsurance Company of Zurich21 the Judicial Committee of the Privy
Council, on appeal from the Court of Appeal of Bermuda,
commented on the Ali Shipping case. Lord Hobhouse of
Woodborough, delivering the judgment of their lordships expressed
reservations about resting the duty of confidentiality upon an implied
term subject to exceptions and observed:
However Potter LJ, who delivered the leading judgement, having

followed Dolling-Baker v Merret (sup) affirming the privacy of
arbitration proceedings, went on to characterise a duty of
confidentiality as an implied term (p 326) and then to formulate
exceptions to which it would be subject (pp 326-7). Their
Lordships have reservations about the desirability or merit of
adopting this approach. It runs the risk of failing to distinguish
between different types of confidentiality which attach to different
types of document or to documents which have been obtained in
different ways and elides privacy and confidentiality.
However in Associated Electric the parties had expressly agreed that

the arbitration was private and confidential. Consequently it was un-
21 Privy Council Appeal No. 93 of 2001, 29 January 2003.
168
CONFIDENTIALITY 437
necessary for their Lordships to further consider any implied term.

The Privy Council held that as a matter of construction the express
confidentiality provision did not apply to the enforcement of the
award or to its reliance, in a subsequent arbitration between the two
parties, as constituting an issue estoppel.
(7) Arbitration Proceedings in the Courts
Because of the confidentiality attaching to arbitration in England, the

question has arisen as to what confidentiality exists when an
“arbitration claim” is raised in a court. Following the enactment of
the Arbitration Act 1996 court proceedings involving an arbitration
were held in camera. A significant change was made in 2002 following
amendments to the Civil Procedure Rules (“CPR”). Rule 62.10 now
provides as follows:
CPR 62.10:
(1) The Court may order that an arbitration claim be heard either in
public or in private.
(2) Rule 39.2 does not apply.
(3) Subject to any order made under paragraph (1) -
(a) the determination of -
(i) a preliminary point of law under section 45 of the 1996 Act; or
(ii) an appeal under section 69 of the 1996 Act on a question of law
arising out of an award, will be heard in public; and
(b) all other arbitration claims will be heard in private.
(4) Paragraph (3)(a) does not apply to -
(a) the preliminary question of whether the Court is satisfied of the
matters set out in section 45(2)(b); or
(b) an application for permission to appeal under section 69(2)(b).
The term “arbitration claim” is itself defined in Rule 62.2 as follows:
62.2 - (1) In this Section of this Part “arbitration claim” means -

(a) any application to the Court under the 1996 Act,
(b) a claim to determine -
(i) whether there is a valid arbitration agreement;
169
(ii) whether an arbitration tribunal is properly constituted; or

(iii) what matters have been submitted to arbitration in accordance
with an arbitration agreement;
(c) a claim to declare that an award by an arbitral tribunal is not
binding on a party; and
(d) any other application affecting -
(i) arbitration proceedings (whether started or not); or
(ii) an arbitration agreement
(2) This Section of this Part does not apply to an arbitration claim
to which Section II or III of this Part apply.
In City of Moscow v International Industrial Bank22 an arbitration was held

in England involving three sets of parties, the Department of
Economic Policy and Development of the City of Moscow and the
City of Moscow; the Bankers Trust Company and the International
Industrial Bank. An award was made which was subsequently
challenged under Section 68 of the Arbitration Act 1996. The court
dismissed the application. A copy of the judgment was obtained by
Lawtel which summarised the judgment on its website with a link to
the full text. Following an objection by one of the parties to the
arbitration, the material on Lawtel's website was deleted.
The Moscow parties sought an order that the judgment, or failing

that the Lawtel summary, should be available for general publication
or alternatively for limited publication to sub-participants who had
advanced monies to one of the parties in the arbitration.
In the Court of Appeal Mance LJ, with whom Carnwath LJ agreed,

referred to the changes to the CPR and the importance of privacy
and confidentiality in relation to arbitration proceedings in England.
He observed:
30. The rule changes in 1997 and 2002 rest clearly on the
philosophy of party autonomy in modern arbitration law,
22
[2004] 2 Lloyd's Rep 179 (Court of Appeal)
170
CONFIDENTIALITY 439
combined with the assumption that parties value English

arbitration for its privacy and confidentiality.
.....................................
32. The rule makers clearly deduced from the principles of the
Arbitration Act, 1996 that any Court hearing should take place, so
far as possible, without undermining the reasons of inter alia
privacy and confidentiality for which parties choose to arbitrate in
England. Their conclusion in this regard has not been challenged.
It may be justified on the simple basis that arbitration represents a
special case, in relation to which there has been very considerable
development during recent years. An alternative and overlapping
consideration is that parties may be deterred from arbitrating or at
any rate from invoking the Court's supervisory role in relation to
arbitration if their understanding regarding arbitral confidentiality
and privacy is ignored. I would personally doubt whether it can be
said without any positive evidence that the publication that has in
the past frequently followed applications to set aside arbitration
awards, e.g. for misconduct, has itself been likely to be detrimental
to parties' keenness or otherwise to agree to arbitrate in London.
But I find it easier to accept that, having arbitrated unsuccessfully
here, a party could well be deterred from making an arbitration
claim in Court if there was a risk that by doing so really confidential
matters might be disclosed.
Mance LJ went on to point out that the consideration that parties

have elected to arbitrate confidentially and privately cannot dictate
the position in respect of arbitration claims brought to the Court.
Court proceedings are not consensual and the possibility of pursuing
them exits in the public interest. Nonetheless in drafting the Rules,
the Rule Committee and the courts could still take into account the
parties expectations regarding privacy and confidentiality when
agreeing to arbitrate.
Mance LJ remarked that under CPR 62.10 the Rule Committee

considered that in cases where permission to appeal was appropriate,
the starting point was to treat the public interest in a public hearing as
outweighing any wish on the parties part for continuing privacy and
confidentiality. However in the case of other arbitration claims, the
171
starting point was reversed. The Court of Appeal went onto say that
even with a hearing conducted in private the court should, when
giving judgment, do so in public where this could be done without
disclosing significant confidential information. In deciding how to
exercise its discretion under CPR 62.10 the court had to weigh
together factors militating in favour of publicity together with the
confidentiality of the original arbitration.
In the case before it, the Court concluded that the trial judge's
conclusion that the judgment should remain private was justified.
However the Lawtel summary raised different considerations. It
offered a brief and factually neutral insight into the legal issues and
did not disclose any sensitive or confidential information. Further
there was no sensible means of preventing further publication by
subscribers to Lawtel of the summary and there was no reason of
arbitral sensitivity or confidentiality mitigating against its publication.
A slightly different case is that of Glidepath BV v Thompson23. There

proceedings were commenced in England between a claimant and a
defendant who were parties to a joint venture agreement. The
claimant was Glidepath BV and the allegations in the proceedings
which it had commenced involved a transaction whereby part of the
business of a company called Spherion (UK) Ltd was transferred to a
company called STA/Rel Q.
The joint venture agreement contained an arbitration clause and the

proceedings in the English court were eventually stayed under
Section 9 of the Arbitration Act 1996. However prior to the making
of the stay order, there had been applications by the claimants for
freezing injunctions and disclosure orders. These orders were made
in the course of hearings in private. There were further applications
to discharge these orders, also made in private, and they were
unsuccessful.
23
[2005] 2 Lloyd's Rep. 529
172
CONFIDENTIALITY 441
After the English proceedings were stayed the applicant, a Mr

Onwuka, who was not a party to the proceedings, but was employed
by Spherion (UK) Ltd applied under CPR 5.4(5) for copies of
documents in the court file including particulars of claim, notices of
application in respect of the freezing injunction and the disclosure
application as well as the respective orders.
Mr Onwuka, who was employed by Spherion (UK) Ltd was in

dispute with his employers concerning his exclusion from the transfer
of employment of the employees of Spherion to STA/Rel Q. He
claimed that he was unlawfully excluded from this transfer and that
he was the victim of adverse treatment on grounds of race.
The defendants to the application for copies of the documents

submitted that all the classes of documents covered by the
application were confidential to the parties to the arbitration. They
further submitted that the claimant wrongfully resorted to the courts
instead of referring the disputes to arbitration and accordingly, as
regards a non-party, the court should protect the confidentially of the
arbitral procedure by declining to permit any of the documents to be
disclosed. They further submitted that the applicants' interest in
gaining access to the documents was in reality to obtain cross-
examination material for use in the employment tribunal proceedings.
The applicant, for its part, relied on the decision of the court in The
City of Moscow v International Industrial Bank [2004] 2 Lloyd's Report
179.
Colman J distinguished the decision in the City of Moscow and

observed:
19. That case was concerned with the publication of judgments in

respect of applications for ancillary relief. The judgment does,
however, recognise that the confidentiality of the arbitral process
should in general be protected unless in the public interest it is
appropriate that a judgment should be published. However, it is
173
definitely not authority for the proposition that arbitration claims

except those covered by CPR 62.10(3)(a) should be heard in public
unless the court otherwise orders.
20. Whereas it is true that an application notice issued under

section 9 of the 1996 Act is not an arbitration claim form and that
by CPR 62.8 it has to be served on all other parties to the court
proceedings, it is certainly an arbitration claim which has to be
heard in private unless the court decides otherwise. That is at least
some indication that, even at the stage before the court has ordered a
stay, the private and confidential character of proceedings ancillary
to the arbitral process ought to be protected." (at p 4-5)
Colman J said that the relevant test was:
24. I therefore conclude that the permission of the court to a

stranger to an arbitration and to proceedings in which a section 9
stay has been applied for to inspect either an application notice
under section 9 and any evidence on the court file or arbitration
claim forms for ancillary relief under section 44 and evidence
appended on the court file should not be granted unless all the
parties to the arbitration consent or there is an overriding "interest
of justice" as envisaged in Ali Shipping Corporation v Shipyard Trogir.
Further, in a case where, as in the present case, the application
under section 9 is preceded by an application for a freezing injunction
or for a Norwich Pharmacal disclosure order in the face of a binding
arbitration agreement, the exercise of the court's discretion upon an
application by a stranger to the arbitration agreement or the
proceedings to inspect those applications or the evidence
supporting them on the court file should similarly be exercised by
reference to the principles of confidentiality attaching to arbitral
proceedings. (at p 5)
The judge concluded that on the facts of the application neither the
specific interests of the applicant in establishing his alleged rights
before the employment tribunal nor the interests of justice generally
justified the granting of access to any of the list of documents the
subject of the application.
174
CONFIDENTIALITY 443
II. AN ANALYSIS AND SURVEY
A. Other National Laws
In Esso Australia the High Court of Australia held that arbitration

is private but it declined to find a duty of confidentiality attached to
documents and information obtained during the course of an
arbitration. However the High Court did hold that a duty of
confidentiality arose in two circumstances. The first was where the
parties had made express provision for confidentiality. Secondly the
High Court held that confidentiality attached to documents which are
produced by a party compulsorily pursuant to a direction of the
arbitrator. But this limited obligation was itself subject to a number
of exceptions including the public’s legitimate interest in obtaining
information about the affairs of public authorities. In contrast the
English Court of Appeal in Ali Shipping held that an implied term of
confidentiality ought properly to be regarded as attaching as a matter
of law. The consequence is that it automatically applies and it is not
necessary to establish any need to imply the term in a particular case
to give business efficacy. However the implied term of
confidentiality is subject to a number of exceptions which the court
enunciated.
The decisions in Esso Australia and Ali Shipping provide a stark
illustration of different approaches adopted in two common law
jurisdictions. A question which might legitimately be asked is which
view is generally prevalent? In the light of the notoriety which
followed the High Court’s decision in Esso Australia, and the
trenchant criticism which it received, together with the previously
widely held assumption that arbitration is confidential, it might be
thought that the High Court’s decision was an aberration. But this
would be going much too far. In the United States there is authority,
predating Esso Australia, which suggests that arbitration is not
confidential; and, the High Court’s decision was to prove influential
in a subsequent consideration of confidentiality in a non-common
law jurisdiction, namely Sweden.
175
There do not appear to be many decided cases in the United

States on confidentiality. In United States v. Panhandle Eastern Corp,24 a
United States District Court held that confidentiality does not attach
to documents obtained in an arbitration. The case involved a civil
action brought by the United States Government against Panhandle
Eastern Corporation (“PEC”) and its affiliates and certain other
corporations. The United States Government served PEC with a
request for documents relating to a previous arbitration held in
Geneva between a subsidiary of PEC known as Panhandle Eastern
Park Line Co (“PEPL”) and Sonatrach, the Algerian national oil and
gas company (“Sonatrach Arbitration”). The documents requested
by the United States comprised:
All documents relating to the Sonatrach Arbitration, including, but

not limited to: briefs, correspondence and other papers filed with
or submitted to the arbitrators, or their delegates; communications
between any and all of the defendants, depositions or other witness
statements; transcripts of all hearings before the arbitrators, or their
delegates; proposals to settle the arbitration; and, inter-or intra-
company documents.
PEPL sought an order of protection before a Delaware Court

that the discovery not be had. PEPL rested its application on two
grounds, that disclosure would cause PEPL to suffer economic injury
and secondly that the arbitration was confidential in nature. The
court rejected the letter and said:
In light of the foregoing requirements, it is clear that PEPL has

failed to carry its burden of showing good cause. The only
foundation that PEPL has provided in support of its motion is that
affidavit of Louis Begley (“affidavit”) (D.I.76), who served as lead
counsel for PEPL and Trunkline LNG Co. (“TLC”) in the
Sonatrach Arbitration. The affidavit first presents the argument
that the applicable Rules of the Court of Arbitration of the
International Chamber of Commerce (“ICC Rules”) require the
24 118 F.R.D. 346 (D. Del.1988).
176
CONFIDENTIALITY 445
Sonatrach Arbitration documents to be kept confidential. (Id. 5-9,

at 2-5.) In support of this argument Begley cites to various rules,
including one which states that “[t]he work of the Court of
Arbitration is of a confidential character which must be respected
by everyone who participates in that work in whatever capacity.”
(Id. 7, at 3). However, this rule, as well as another which the
affidavit quotes for support, have been culled from Appendix II of
the Rules, which is entitled: “Internal Rules of the Court of
Arbitration.” (See Appendix to United States” Brief, D.I. 79A,
A16.) These rules are therefore meant to be applied internally,
governing the members of the Court of Arbitration. They do not
apply to the parties to arbitration proceedings *350 or to the
independent arbitration tribunal which conducts these proceedings.
Furthermore, even if the internal rules somehow applied to the
parties, they would govern only those proceedings which take place
within the Court of Arbitration, as opposed to those proceedings
conducted by arbitrators who were appointed by the Court of
Arbitration. As the ICC Rules themselves state: “The Court of
Arbitration does not itself settle disputes. Insofar as the parties
shall not have provided otherwise, it appoints, or confirms the
appointment of, arbitrators in accordance with the provisions of
this Article.” (Id. at A6.) Therefore, the rules governing the internal
functioning of the Court of Arbitration are not applicable here, and
provide no support for PEPL’s motion.”
The Court in Panhandle did not accept that the arbitration

documents were confidential. However there is authority in the
United States that the deliberations of the Arbitral Tribunal are
confidential. Lisk25 cites the decision of the San Antonio Court of
Appeals in Rutherfords v. Blanks26 which raised the question of whether
an arbitrator could be called upon to testify about an attorney’s fee
dispute which was arbitrated before the Fee Dispute Committee of
the San Antonia Bar Association. According to Lisk, after the
arbitration award was rendered, one of the Committee members
resigned and made some negative comments about the Committee.
25 Derek Lisk, “Confidentiality of Arbitrations” 63 Tex. B.J. 234.

26 Unreported.
177
The attorney, whose fees had been disputed, then applied to vacate
the award, alleging corruption, fraud and wilful misbehaviour on the
part of one or more of the arbitrators. The attorney tried to take
depositions of the Committee members and the Bar Association
moved to quash the depositions. When one of the Committee
members resigned the attorney sought to depose the departing
Committee member. The trial court found that the discussions and
conduct of the arbitrators during deliberations should remain
confidential. On appeal the Court of Appeals noted two conflicting
considerations. The first was that the Committee’s interest in
protecting the arbitration process was supported by the Texas
legislature's express statement that it was the policy of that State to
encourage the peaceful resolution of disputes. On the other hand the
court felt that this interest was countered by the attorney’s interest in
discovering relevant evidence. But the Court of Appeals did not
have to finally decide where the balance lay because it found that the
attorney had waived his right to complain about the trial court’s
ruling by not going forward with the depositions after the ruling and
making a record of the questions the trial court would have
precluded.
The approach of the High Court of Australia was followed in
Sweden in the Bulbank v. AIT case.27 The Swedish case concerned
arbitral proceedings conducted in Stockholm under the Arbitration
Rules of the United Nations Economic Commission for Europe.
The Claimant was an Austrian creditor and the Respondent was a
Bulgarian bank. The Respondent challenged the jurisdiction of the
arbitral tribunal. This challenge was unsuccessful and the tribunal
issued an interim award upholding its jurisdiction. The tribunal’s
decision was sent to Mealey’s International Arbitration Report by a
representative of the Claimant and it was published. Subsequently
27 The case is discussed at some length by Bagner, supra n.2 at 245-249. A
detailed case note by Romander and Pettersson, entitled “Confidentiality in

Swedish Arbitration Proceedings” can be viewed at
http://www.sccinstitute.se/_upload/shared_files/artikelarkiv/confidentiality_in_s
wedish_arbitration_proceedings.pdf.
178
CONFIDENTIALITY 447
the chairman of the tribunal at a social function, disclosed

information about the interim decision to a Justice of the Supreme
Court and the Supreme Court in its ruling made reference to the
published interim award.
Before the arbitral tribunal, the Respondent contended that the
Claimant had repudiated the arbitration agreement and that the
chairman of the tribunal had disqualified himself. The arbitral
tribunal rejected these contentions and proceeded to render its final
award.
The respondent appealed to the Stockholm City Court which
found that there was a general implied duty of confidentiality in
Swedish arbitration proceedings and that the Claimant’s disclosure of
the decision had constituted a material breach of this duty which gave
the Respondent a right to revoke the arbitration agreement. In
consequence the arbitration agreement was not valid at the time of
the tribunal’s final award. The court therefore decided to nullify the
award. An appeal was taken to the Svea Court of Appeal which set
aside the judgment of the Stockholm City Court. It would appear
that the Appeal Court did recognize a duty of confidentiality but it
drew a distinction between the different types of information. The
Appeal Court held that in many cases a reasonable sanction for a
breach of confidentiality would be the payment of damages. Only in
cases where the breach was significant would the other party be
entitled to declare the arbitration agreement void. In the instant case
the Appeal Court found that the information disclosed had been
mainly of a procedural nature and did not give rise to a right to
terminate the arbitration agreement. The Appeal Court also held that
the chairman’s action did not warrant his disqualification as he was
motivated by an interest to participate in the development of the law.
The Supreme Court recognized that arbitral proceedings were
private in character and that third parties did not have a right to
attend. However in the court’s view this did not restrict the parties'
freedom to disclose information about the arbitral proceedings. The
court recognized that generally parties might have an interest in not
disclosing information about the proceeding but that this would not
always be the case. But the general recognition by parties themselves,
179
in many cases, that arbitral proceedings should be treated as

confidential was quite different from holding that a legal duty of
confidentiality existed. The Supreme Court noted that the new
Arbitration Act 1999 of Sweden did not incorporate any rule on
confidentiality. The court also noted the position in other countries.
While some countries recognized a duty of confidentiality others did
not and the Supreme Court referred to the decision of the High
Court of Australia in Esso Australia. The Supreme Court
unanimously ruled that a party in arbitration proceedings governed by
Swedish law could not be regarded as bound by confidentiality unless
the parties had entered into a specific agreement. It followed that the
Claimant’s disclosure did not constitute a material breach of the
arbitration agreement giving the Respondent the right to revoke the
agreement.
Commenting on the Swedish Supreme Court decision, Bagner
observes:
The myth about the duty of confidentiality in arbitration, fatally

wounded in 1995 by the Australian High Court, has now been laid
to rest, at least in Sweden.”28
But of course while the United States, Australia and Sweden do

not recognize a broad and general legal obligation of confidentiality
attaching to documents and information obtained in an arbitration, a
different situation applies in some other countries. We have already
noted the position in England. It appears that French law also
recognizes such an obligation. The case usually cited is Aita v. Ojjeh.29
The case, as summarized by Paulsson and Rawding30 is as follows:
In the case of Aita v. Ojjeh, the Court of Appeal of Paris - perhaps

the most important jurisdiction in France in the context of
international arbitration given the fact that it reviews almost all
28Bagner, supra n. 2, at 248.

29Judgment of 18 February 1986, 1986 Revue de L’arbitrage 583.
30 Paulsson and Rawding, “The Trouble with Confidentiality” (1995) 11 Arbitration
International 303 at 312.
180
CONFIDENTIALITY 449
challenges to awards - rendered a judgment against a party which

rather bizarrely was seeking the annulment in France of an award
rendered in London (by Lord Wilberforce acting as umpire). The
Court of Appeal not only dismissed the challenge, but ruled that
the very bringing of the proceedings violated the principle of
confidentiality and therefore ordered the challenging party to pay a
significant penalty to the party which had won the arbitration,
noting that the action had “caused a public debate of facts which
should remain confidential,” and that it is in “the very nature of
arbitral proceedings that they ensure the highest degree of
discretion in the resolution of private disputes, as the two parties
had agreed.
Another jurisdiction which recognizes a broad obligation of

confidentiality is New Zealand. It is somewhat unique in that the
obligation is enshrined in legislation. Section 14 of the New Zealand
Arbitration Act 1996 provides:
(1) Subject to subsection (2), an arbitration agreement, unless

otherwise agreed by the parties, is deemed to provide that the
parties shall not publish, disclose, or communicate any
information relating to arbitral proceedings under the
agreement or to an award made in those proceedings.
(2) Nothing in subsection (1) prevents the publication, disclosure,
or communication of information referred to in that
subsection—
(a) If the publication, disclosure, or communication is
contemplated by this Act; or
(b) To a professional or other adviser of any of the
parties.
Leaving aside the case of New Zealand, the dearth of legislative

provisions on confidentiality includes the most important
contemporary law on international commercial arbitration, the
UNCITRAL Model Law on International Commercial Arbitration.
181
In Canada, the Supreme court of British Columbia in Hi-Seas

Marine Ltd v Boelman31 noted the contradictory positions taken by the
English court in Ali Shipping and the Australian court in Esso Australia
and observed that “it may be necessary for the courts of this province
to comprehensively address [it]” but found it unnecessary to do so in
the case before it.
B. Selection of the Application National Law
The lack of uniformity amongst national laws and the diverse

treatment of confidentiality raises a choice of law question. Which
law determines the issue of confidentiality? There is little to be said
for application of the lex causae, the law governing the substantive
rights of the parties. This will usually be the law applicable to the
contract which is the subject of the arbitration. Nor is there much to
be said for application of the law governing the arbitration
agreement. This will often be the same law as the law which governs
the substantive contract in which the arbitration agreement is usually
found.32 However an arbitration agreement is not invariably
governed by the law of the substantive contract. The law governing
an arbitration agreement determines its validity and effect. This
would not seem to encompass confidentiality of the arbitral
proceedings themselves. The choices for the law governing
confidentiality would seem to lie between the law applicable to the
arbitral proceedings (lex arbitri)33 or the law of the place where the
issue of confidentiality arises (lex fori). Thus if an arbitration were
held in Singapore and documents obtained in the course of that
arbitration were sought to be produced in court proceedings or in an
arbitration in Australia, the choice of law applicable to confidentiality
would lie between that of Singapore (as the seat of the arbitration and
31
2006 BCSC 488; (2006) 17 B.L.R (4th) 240.
32 See Sykes and Pryles, Australian Private International Law (3d edition 1991)
at 141-42; Redfern and Hunter, Law and Practice of International Commercial

Arbitration (2d edition 1991) at 75-76.
33 Sykes and Pryles at 149; Redfern and Hunter at 77.
182
CONFIDENTIALITY 451
the lex arbitri) and that of Australia (the lex fori). In this writer’s
opinion the lex arbitri should apply. Thus an Australian court or
arbitrator should test the confidentiality of the documents sought to
be produced in accordance with the law of Singapore.
183
C. Issues of Confidentiality
Confidentiality can be broken down into a number of discrete

issues. The first is that of privacy. Strictly speaking, privacy is a
separate matter to confidentiality but is generally considered
alongside confidentiality. It was so in the Australian High Court’s
decision in Esso Australia. Privacy is generally taken to refer to the
arbitral hearing and the right of persons to attend or be present.
There seems to be broad agreement that arbitral proceedings are
private in the sense that strangers have no right of admission. Only
the parties, their representatives and legal advisers and witnesses have
a right to be present. However with regard to witnesses the right is
limited and qualified. A witness may be excluded until asked to give
evidence and a witness who has given evidence in the form of a
witness statement and whose presence is not required by either party
would have no right to attend.
The private nature of arbitration proceedings was recognized by
the High Court of Australia in Esso Australia. The High Court stated
that it did not matter whether the characteristic of privacy is an
ordinary incident of the arbitration, that is, an incident of the subject
matter upon which the parties have agreed, or whether it is an
implied term of the agreement. The Court noted that earlier
authorities referred to it as an implied term but the High Court
preferred to describe the private character of the hearing as
something that inheres in the subject matter of the agreement to
submit disputes to arbitration rather than attribute that character to
an implied term.
The location of arbitration hearings is also suggestive of the
private nature of arbitrations. Hearings are usually held in conference
rooms in hotels, arbitration centres or offices which are hired for this
purpose. Whether such rooms are hired for arbitration hearings,
social purposes or business proceedings, it is a trite fact that the
public have no right of admission. Of course, the public can be
admitted to a hearing by agreement. In one arbitration I chaired in
Manila, which concerned an application for an extraordinary increase
in water rates, it was agreed that the matter was of great interest to
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CONFIDENTIALITY 453
the public and the public should have the opportunity to observe the
proceedings. Because of the physical constraints of the hearing room
itself, it was agreed that the proceedings would be televised and the
public admitted to an adjoining room where they could view the
proceedings on a television screen. In an ICC arbitration both the
parties and the arbitral tribunal must agree to the admission of
strangers. Article 21(3) of the ICC Rules of Arbitration provides:
The Arbitral Tribunal shall be in full charge of the hearings, at

which all the parties shall be entitled to be present. Save with the
approval of the Arbitral Tribunal and the parties, persons not
involved in the proceedings shall not be admitted.
While privacy is a concept which prevents strangers from

attending a hearing, confidentiality is a concept which imposes
obligations on the participants to the arbitration. Where it attaches it
applies to the parties and the arbitrators though probably not to
witnesses. Certainly if confidentiality arises from an implied term in
the arbitration agreement it cannot extend to witnesses because they
are not parties to the agreement and are not bound by it. In contrast,
the arbitrators acquire a contractual relationship with the parties and
are bound by the arbitration agreement. A witness could only acquire
an obligation of confidentiality by rule of law or, alternatively, by
entering into a confidentiality agreement.
The most common issue of confidentiality which arises, and that
which was before the High Court of Australia in Esso Australia,
concerned documents and information obtained in the course of an
arbitration. A party claiming confidentiality will assert that such
documents or other information cannot be used for any other
purpose. However other issues of confidentiality may also arise.
One issue concerns the existence of the arbitration itself. May a party
to an arbitration disclose its involvement in an arbitration with
another named party? If it cannot name the other party can it
disclose that it is involved in an arbitration with an unnamed party?
If there is a general obligation of confidentiality in these
circumstances, how does this sit with obligations which may be
185
imposed upon a party to an arbitration to provide information to its

shareholders, to the stock exchange or to banks providing finance?
If there is an obligation of confidentiality either as an implied term or
as a term of law, is that obligation subject to such obligations of
disclosure? Is a distinction to be made where disclosure is required
as a matter of law and where disclosure is required as a matter of
contractual obligation?
The answer to these questions are not entirely clear. In Australia
the decision is Esso Australia deals with confidentiality attaching to
documents and information not to the existence of the arbitration
itself. But the reasoning of the High Court would suggest that there
is no confidentiality attaching to the existence of the arbitration. The
position might be otherwise under the law of England and Wales.
A third issue of confidentiality which may arise concerns the
award itself. Is the award confidential or can it be published to third
parties? Again, the existence of an obligation on a party to satisfy an
award to pay damages is a fact which may have to be disclosed to
regulatory authorities and perhaps providers of finance. Also
enforcement of an award will require disclosure to a court. Hence any
obligation of confidentiality attaching to the existence of the
arbitration clearly gives rise to questions concerning the exceptions to
that obligation.
Finally, issues of confidentiality may arise in court proceedings to
set aside or enforce an award or with respect to court intervention in
the arbitral proceedings themselves.
It follows that these diverse issues of confidentiality may arise at
various stages during the arbitration. An issue concerning the
disclosure of the existence of an arbitration may arise at the very
commencement of the arbitral proceedings. Questions concerning
the disclosure of documents or information obtained during the
arbitration can arise during the proceedings themselves or after they
have terminated, for example in subsequent arbitral or judicial
proceedings. Following the conclusion of an arbitration an issue may
arise as to whether the award can be published.
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CONFIDENTIALITY 455
D. Arbitration Rules
Confidentiality may exist under the applicable national law. It

may also arise as a result of contractual provisions concluded
between the parties to the arbitration. A contractual provision on
confidentiality can be incorporated by reference. For example, if the
parties designate that the arbitration will be governed by a particular
set of arbitration rules, any provision in those arbitration rules on
confidentiality will apply to the arbitration. A survey of commonly
used rules in international arbitration discloses no common pattern.
International arbitration rules tend to fall into one of three
categories. The first are rules which contain no provisions on
confidentiality. An example is the UNCITRAL Arbitration Rules
These Rules contain a provision on privacy but do not deal with
confidentiality. As far as privacy is concerned, Article 25(4) of the
UNCITRAL Arbitration Rules provides:
Hearings shall be held in camera unless the parties agree

otherwise. The arbitral tribunal may require the retirement of
any witness or witnesses during the testimony of other
witnesses. The arbitral tribunal is free to determine the
manner in which witnesses are examined.
It will be noted that the UNCITRAL Arbitration Rules enable

the parties to agree that the hearing shall not be private. In contrast,
Article 21(3) of the ICC Rules of Arbitration provides that persons
not involved in the proceedings can only be admitted with the
approval of the parties and the Arbitral Tribunal.
The ICC Rules of Arbitration are also probably classified as rules
which make no provision for confidentiality. The rules deal with
privacy, as is noted above. But in relation to confidentiality the only
provision is article 20(7) which provides:
187
The Arbitral Tribunal may take measures for protecting trade

secrets and confidential information.
This rule does not on its face appear to make documents and
other information provided in an arbitration confidential. It
empowers the arbitral tribunal to take measures to protect
information which is otherwise confidential i.e. where the
confidentiality arises apart from article 20(7) of the rules.
Appendix I of the ICC Rules of Arbitration contains the statutes
of the International Court of Arbitration of the ICC. Article 6
provides as follows:
The work of the Court is of a confidential nature which must be

respected by everyone who participates in that work in whatever
capacity. The Court lays down the rules regarding the persons who
can attend the meetings of the Court and its Committees and who
are entitled to have access to the materials submitted to the Court
and its Secretariat.
This provision does not deal with confidentiality in the arbitral

proceedings themselves but simply makes the work of the Court
confidential. As the United States District Court held in the
Panhandle case,34 these provisions do not suffice to make ICC
arbitration confidential. Yves Fortier has observed that when the
ICC reviewed its previous rules and formulated the new 1998 ICC
Rules of Arbitration, much time was devoted to considering
confidentiality. He says that the working party charged with
proposing updated rules was unable to arrive at a consensus
regarding an appropriate formulation of a general duty of
confidentiality and as a result no such duty was proposed.35
A second category of arbitration rules contains limited provisions
on confidentiality. The international arbitration rules of the
Supra n. 21.
34
Fortier, “The Occasionally Unwarranted Assumption of Confidentiality”

35
(1999) 15 Arbitration International 131 at 133.
188
CONFIDENTIALITY 457
American Arbitration Association provide an example. Article 34

states:
Confidential information disclosed during the proceedings by the

parties or by witnesses shall not be divulged by an arbitrator or by
the administrator. Unless agreed by the parties, or required by
applicable law, the members of the tribunal and the administrator
shall keep confidential all matters relating to the arbitration or the
award.
This provision makes all matters relating to the arbitration or the

award confidential but only so far as the tribunal and the
administrator is concerned. It does not, of itself, impose obligations
on the parties to the arbitration.
A third category of arbitration rules contain extensive provisions
on confidentiality. An outstanding example is the WIPO Arbitration
Rules. Article 73 deals with confidentiality concerning the existence
of the arbitration, as follows:
(a) Except to the extent necessary in connection with a court

challenge to the arbitration or an action for enforcement of an
award, no information concerning the existence of an
arbitration may be unilaterally disclosed by a party to any third
party unless it is required to do so by law or by a competent
regulatory body, and then only:
(i) by disclosing no more than what is legally

required; and
(ii) by furnishing to the Tribunal and to the other party, if

the disclosure takes place during the arbitration, or to
the other party alone, if the disclosure takes place after
the termination of the arbitration, details of the
disclosure and an explanation of the reason for it.
(b) Notwithstanding paragraph (a), a party may disclose to a third

party the names of the parties to the arbitration and the relief
189
requested for the purpose of satisfying any obligation of good

faith or candor owed to that third party.
Article 74 deals with confidentiality of disclosures made during

the arbitration and provides:
(a) In addition to any specific measure that may be available under

Article 52, any documentary or other evidence given by a party
or a witness in the arbitration shall be treated as confidential
and, to the extent that such evidence describes information
that is not in the public domain, shall not be used or disclosed
to any third party by a party whose access to that information
arises exclusively as a result of its participation in the
arbitration for any purpose without the consent of the parties
or order of a court having jurisdiction.
(b) For the purposes of this Article, a witness called by a party

shall not be considered to be a third party. To the extent that a
witness is given access to evidence or other information
obtained in the arbitration in order to prepare the witness’s
testimony, the party calling such witness shall be responsible
for the maintenance by the witness of the same degree of
confidentiality as that required of the party.
Confidentiality of the award is provided in Article 75 as follows:
The award shall be treated as confidential by the parties and

may only be disclosed to a third party if and to the extent that
(i) the parties consent, or
(ii) it falls into the public domain as a result of an action

before a national court or other competent authority,
or
(iii) it must be disclosed in order to comply with a legal

requirement imposed on a party or in order to
establish or protect a party’s legal rights against a third
party.”
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CONFIDENTIALITY 459
The WIPO Rules also provide for confidentiality by the Centre

and the Arbitrator in Article 76, as follows:
(a) Unless the parties agree otherwise, the Centre and the
arbitrator shall maintain the confidentiality of the
arbitration, the award and, to the extent that they describe
information that is not in the public domain, any
documentary or other evidence disclosed during the
arbitration, except to the extent necessary in connection
with a court action relating to the award, or as otherwise
required by law.
(b) Notwithstanding paragraph (a), the Centre may include

information concerning the arbitration in any aggregate
statistical data that it publishes concerning its activities,
provided that such information does not enable the parties
or the particular circumstances of the dispute to be
identified.”
The Rules of the London Court of International Arbitration also

contain substantial provisions on confidentiality. Unlike the WIPO
Rules, those of the LCIA do not expressly provide for confidentiality
of the existence of the arbitration. Article 30 of the LCIA rules is in
the following terms:
191
Article 30 Confidentiality
30.1 Unless the parties expressly agree in writing to the

contrary, the parties undertake as a general principle to
keep confidential all awards in their arbitration, together
with all materials in the proceedings created for the
purpose of the arbitration and all other documents
produced by another party in the proceedings not
otherwise in the public domain - save and to the extent
that disclosure may be required of a party by legal duty, to
protect or pursue a legal right or to enforce or challenge an
award in bona fide legal proceedings before a state court
or other judicial authority.
30.2 The deliberations of the Arbitral Tribunal are likewise

confidential to its members, save and to the extent that
disclosure of an arbitrator’s refusal to participate in the
arbitration is required of the other members of the Arbitral
Tribunal under Articles 10, 12 and 26.
30.3 The LCIA Court does not publish any award or any part
of an award without the prior written consent of all parties
and the Arbitral Tribunal.
Another set of rules with a comprehensive confidentiality

provision is the Rules of the Australian Centre for International
Commercial Arbitration. Similarly to the WIPO Rules, the ACICA
Rules expressly provide that the existence of the arbitration is
confidential. Article 18 of the ACICA Rules provides as follows:
18.1 Unless the parties agree otherwise in writing, all hearings shall
take place in private.
18.2 The parties, the Arbitral Tribunal and ACICA shall treat as
confidential and shall not disclose to a third party without
prior written consent from the parties all matters relating to
the arbitration (including the existence of the arbitration), the
192
CONFIDENTIALITY 461
award, materials created for the purpose of the arbitration

and documents produced by another party in the proceedings
and not in the public domain except:
(a) for the purpose of making an application to any

competent court;
(b) for the purpose of making an application to the courts
of any State to enforce the award;
(c) pursuant to the order of a court of competent
jurisdiction;
(d) if required by the law of any State which is binding on
the party making the disclosure; or
(e) if required to do so by any regulatory body.
18.3 Any party planning to make disclosure under Article 18.2

must within a reasonable time prior to the intended disclosure
notify the Arbitral Tribunal, ACICA and the other parties (if
during the arbitration) or ACICA and the other parties (if the
disclosure takes place after the conclusion of the arbitration)
and furnish details of the disclosure and an explanation of the
reason for it.
18.4 To the extent that a witness is given access to evidence or

other information obtained in the arbitration, the party calling
such witness is responsible for the maintenance by the
witness of the same degree of confidentiality as that required
of the party.
Recently the Singapore International Arbitration Centre

promulgated a new set of Arbitration Rules. The SIAC Rules (3rd
Edition) came into effect on 1 July 2007, and among the changes
made in this new edition was the inclusion of a comprehensive
confidentiality provision. These Rules also include the existence of
the arbitration within the cloak of confidentiality. Rule 34 states:
193
34.1 The parties and the Tribunal shall at all times treat all matters
relating to the proceedings, and the award as confidential.
34.2 A party or any arbitrator shall not, without the prior written
consent of all the parties, disclose to a third party any such
matter except:
(a) for the purpose of making an application to any

competent court of any State under the applicable law
governing the arbitration;
(b) for the purpose of making an application to the courts
of any State to enforce or challenge the award;
(c) pursuant to the order of or a subpoena issued by a
court of competent jurisdiction;
(d) to a party’s legal or other professional advisor for the
purpose of pursuing or enforcing a legal right or claim;
(e) in compliance with the provisions of the laws of any
State which is binding on the party making the
disclosure; or
(f) in compliance with the request or requirement of any
regulatory body or other authority.
34.3 In this Rule, “matters relating to the proceedings” means the

existence of the proceedings, and the pleadings, evidence and
other materials in the arbitration proceedings created for the
purpose of the arbitration and all other documents produced
by another party in the proceedings or the award arising from
the proceedings but excludes any matter that is otherwise in
the public domain.
E. IBA Rules
The International Bar Association has promulgated rules on The

Taking of Evidence in International Commercial Arbitration (1999) and
Ethics for International Arbitrators (1987). Each of these contains a
provision on confidentiality. Neither set of rules will apply to an
arbitration unless the parties have adopted them. Article 3(12) of the
194
CONFIDENTIALITY 463
Rules of Evidence provides for the confidentiality of documents

produced as follows:
All documents produced by a Party pursuant to the IBA Rules of

Evidence (or by a non-Party pursuant to Article 3.8) shall be kept
confidential by the Arbitral Tribunal and by the other parties and
they shall be used only in connection with the arbitration. The
Arbitral Tribunal may issue orders to set forth the terms of this
confidentiality. This requirement is without prejudice to all other
obligations of confidentiality in arbitration.
This is a limited provision and does not deal with the

confidentiality of the arbitration itself nor of the Award. Article 9 of
the Rules of Ethics provides:
The deliberations of the arbitral tribunal, and the contents of the

award itself, remain confidential in perpetuity unless the parties
release the arbitrators from this obligation. An arbitrator should
not participate in, or give any information for the purpose of
assistance in, any proceedings to consider the award unless,
exceptionally, he considers it his duty to disclose any material
misconduct or fraud on the part of his fellow arbitrators.
This is also a limited provision. It is confined to the

confidentiality of the Award and appears to impose an obligation of
confidentiality only on the arbitrators.
F. Drafting Confidentiality Agreements
If parties to an arbitration wish to ensure the confidentiality of

the proceedings they may need to draft their own confidentiality
provisions. This will be necessary if the applicable national law does
not make adequate provision for confidentiality or if there is some
uncertainty as to which national law will apply. The easiest way to
incorporate confidentiality obligations in an arbitration is to select a
set of arbitration rules which contains appropriate confidentiality
provisions. However, as we have seen, many of the most widely used
195
arbitration rules say little or nothing about confidentiality. In these

circumstances the parties may have to devise their own provisions on
confidentiality.
Ad hoc confidentiality provisions drafted by the parties
themselves can be included in the arbitration agreement.
Alternatively, the parties may conclude a confidentiality agreement at
a later stage, after a dispute has arisen and an arbitration has been
commenced. Neither course may be easy. When drafting an
arbitration agreement to be inserted into a substantive contract, the
parties, or their legal advisors, may lack interest or enthusiasm to
devote time and effort to preparing a confidentiality agreement.
When a dispute has arisen, and a party has commenced an
arbitration, the relationship between the parties may have broken
down to such an extent that the conclusion of a confidentiality
agreement will be no easy task. However in practice if a party wishes
to obtain documents from the other party, the conclusion of a
confidentiality agreement may be a condition insisted upon before
disclosure of documents is made.
The UNCITRAL Notes on Organising Arbitral Proceedings
suggest that the question of confidentiality can be raised by the
arbitral tribunal at a preliminary conference. Paragraphs 31 and 32 of
the Notes provide as follows:
31. It is widely viewed that confidentiality is one of the

advantageous and helpful features of arbitration.
Nevertheless, there is no uniform answer in national laws
as to the extent to which the participants in an arbitration
are under the duty to observe the confidentiality of
information relating to the case. Moreover, parties that
have agreed on arbitration rules or other provisions that
do not expressly address the issue of confidentiality cannot
assume that all jurisdictions would recognise an implied
commitment to confidentiality. Furthermore, the
participants in an arbitration might not have the same
understanding as regards the extent of confidentiality that
is expected. Therefore, the arbitral tribunal might wish to
196
CONFIDENTIALITY 465
discuss that with the parties and, if considered appropriate,

record any agreed principles on the duty of confidentiality.
32. An agreement on confidentiality might cover, for example,

one or more of the following matters: the material or
information that is to be kept confidential (e.g. pieces of
evidence, written and oral arguments, the fact that the
arbitration is taking place, identify of the arbitrators,
content of the award); measures for maintaining
confidentiality of such information and hearings; whether
any special procedures should be employed for
maintaining the confidentiality of information transmitted
by electronic means (e.g. because communication
equipment is shared by several users, or because electronic
mail over public networks is considered not sufficiently
protected against unauthorized access); circumstances in
which confidential information may be disclosed in part or
in whole (e.g. in the context of disclosures of information
in the public domain, or if required by law or a regulatory
body).
In drafting confidentiality agreements, the parties may find that

provisions in arbitration rules furnish a useful precedent, particularly
the provisions in the WIPO Rules which are undoubtedly the most
extensive. Three matters which need to be considered are:
• which issues are to be covered in the agreement;

• the extent of the confidentiality obligation;
• the persons to be covered.
The first point raises the question of whether the confidentiality

obligations should embrace the existence of the arbitration, the
documents and other evidence produced in the arbitration and the
awards themselves or only one or two of these matters. In practice
the second is likely to be the most important but all three may be of
significance. The second matter relates to the extent of the
confidentiality obligation and in particular with the obligation and
197
exceptions to it. Paulsson and Rawding36 say that it is unrealistic and

undesirable to establish an absolute prohibition against unilateral
publication of the mere existence of the arbitration. On the other
hand, a legitimate need to divulge such information seldom arises.
They suggest a provision along the following terms:
Suggested Provision 1
No information concerning an arbitration, beyond the names of

the parties and the relief requested, may be unilaterally disclosed to
a third party by any participating party unless it is required to do so
by law or by a competent regulatory body, and then only:
- by disclosing no more than what is legally required, and

- furnishing to the arbitrator details of the disclosure and an
explanation of the reason for it.
In relation to the confidentiality of documents and other

information provided during an arbitration, Paulsson and Rawding
suggest a provision which includes documentary and other evidence
and written pleadings. Their provision also confers authority on an
arbitrator, when issuing an order for production of documents, to
order production on condition that the receiving party executes a
written undertaking not to disclose the evidence. It would seem,
however, that an arbitrator would in any event possess such power
and that its express conferral on the arbitrator in a confidentiality
agreement or elsewhere is not necessary.
In relation to the confidentiality of awards, Paulsson and
Rawding suggest the following provision:
Suggested Provision 3
Awards should be treated as confidential and not be communicated

to third parties unless
36 Supra n. 28.
198
CONFIDENTIALITY 467
- all parties [and the arbitrator] consent; or

- they fall into the public domain as a result of enforcement
actions before national courts [or other authorities]; or
- they must be disclosed in order to comply with a legal
requirement imposed on an arbitrating party or to establish or
protect such a party’s legal rights against a third party.”
The third matter concerns the persons covered by confidentiality

obligations. Of course a confidentiality agreement will only bind the
parties to the agreement and not others. If it is desired to embrace
the arbitrators then they should be included as parties to the
confidentiality agreement or should be asked to sign a separate
confidentiality agreement. The same is true of an administrating
centre unless, of course, the applicable arbitration rules make
provision for confidentiality on its part. Witnesses who give evidence
to the tribunal will not be under an obligation of confidentiality
unless it arises as a matter of law or unless the witness himself or
herself executes a confidentiality agreement.
III. CONCLUSION
1. Confidentiality in arbitration derives from:
• the applicable national law;

• arbitration rules selected by the parties;
• contractual provisions.
2. As far as the applicable national law is concerned there is no

uniformity. The common assumption of confidentiality,
albeit a somewhat vague concept, ill defined in extent and
subject to diverse exceptions, was undermined by the High
Court of Australia in Esso Australia. It is clear, now, that
this decision is not an antipodean aberration. It has been
followed in Sweden and probably represents the law in the
United States.
199
3. In these circumstances, parties desiring confidentiality in

arbitration should designate a particular set of arbitration
rules which contain appropriate confidentiality provisions
(but these are limited) or conclude a confidentiality
agreement in the arbitration clause or elsewhere. A
confidentiality agreement should deal with all or any of:
• the existence of the arbitration;

• documents and information obtained during the
arbitration;
• the award(s).
4. However there are limits to the effectiveness of

confidentiality agreements.
(a) In the first place both parties must agree to the terms
of the agreement.
(b) A confidentiality agreement only binds the parties
to it.
(c) Special provision is therefore required for:
• the arbitrators;
• an administering arbitral centre;
• witnesses.
(d) Mandatory provisions of law, providing for disclosure

of information, will override confidentiality
agreements.
200
201
UNITED NATIONS
UNCITRAL COMMISSION ON INTERNATIONAL TRADE LAW
UNCITRAL
Rules on Transparency
in Treaty-based
Investor-State Arbitration
UNITED NATIONS
202
Further information may be obtained from:
UNCITRAL secretariat, Vienna International Centre
P.O. Box 500, 1400 Vienna, Austria
Telephone: (+43-1) 26060-4060 Telefax: (+43-1) 26060-5813
Internet: www.uncitral.org E-mail: uncitral@uncitral.org
203
UNITED NATIONS COMMISSION ON INTERNATIONAL TRADE LAW
UNCITRAL
Rules on Transparency
in Treaty-based
Investor-State Arbitration
UNITED NATIONS
New York, 2014
204
© United Nations: United Nations Commission on International
Trade Law. January 2014. All rights reserved.
This publication has not been formally edited.
Publishing production: English, Publishing and Library Section.

United Nations Office at Vienna.
205
Contents
Page
General Assembly resolution 68/109 . . . . . . . . . . . . . . 1
UNCITRAL Rules on Transparency in Treaty-based

Investor-State Arbitration . . . . . . . . . . . . . . . . . . . . . . . 5
Article 1. Scope of application . . . . . . . . . . . . . . . . . . . 5

Applicability of the Rules . . . . . . . . . . . . . . . . . . . . 5
Application of the Rules . . . . . . . . . . . . . . . . . . . . . 5
Discretion and authority of the arbitral tribunal . . 6
Applicable instrument in case of conflict . . . . . . . . 6
Application in non-UNCITRAL arbitrations . . . . . 7
Article 2. Publication of information at the

commencement of arbitral proceedings . . . . . . . . . . . . 7
Article 3. Publication of documents . . . . . . . . . . . . . . 7
Article 4. Submission by a third person . . . . . . . . . . . . 8
Article 5. Submission by a non-disputing Party to

the treaty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Article 6. Hearings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Article 7. Exceptions to transparency . . . . . . . . . . . . . . 10

Confidential or protected information . . . . . . . . . . . 10
Integrity of the arbitral process . . . . . . . . . . . . . . . 12
Article 8. Repository of published information . . . . . . 12
iii
206
207
Resolution adopted by the
General Assembly on 16 December 2013
[on the report of the Sixth Committee (A/68/462)]
68/109. United Nations Commission on

International Trade Law Rules on Transparency in
Treaty-based Investor-State Arbitration and
Arbitration Rules (as revised in 2010, with new article 1,
paragraph 4, as adopted in 2013)
The General Assembly,
Recalling its resolution 2205 (XXI) of 17 December 1966,

by which it established the United Nations Commission on
International Trade Law with a mandate to further the progres-
sive harmonization and unification of the law of international
trade and in that respect to bear in mind the interests of all
peoples, in particular those of developing countries, in the
extensive development of international trade,
Recognizing the value of arbitration as a method of settling

disputes that may arise in the context of international relations
and the wide use of arbitration for the settlement of treaty-based
investor-State disputes,
Recalling its resolutions 31/98 of 15 December 1976 and

65/22 of 6 December 2010, in which it recommended the use
of the Arbitration Rules of the United Nations Commission on
International Trade Law,1
Bearing in mind that the Arbitration Rules are widely used

for the settlement of treaty-based investor-State disputes,
Recognizing the need for provisions on transparency in the

settlement of such treaty-based investor-State disputes to take
account of the public interest involved in such arbitrations,
Believing that rules on transparency in treaty-based investor-

State arbitration would contribute significantly to the establish-
ment of a harmonized legal framework for a fair and efficient
1
Official Records of the General Assembly, Thirty-first Session,
Supplement No. 17 (A/31/17), chap. V, sect. C; and ibid., Sixty-fifth
Session, Supplement No. 17 (A/65/17), chap. III and annex I.
1
208
settlement of international investment disputes, increase trans-
parency and accountability and promote good governance,
Noting that the Commission, at its forty-sixth session,

adopted the Rules on Transparency in Treaty-based Investor-
State Arbitration2 and amended the Arbitration Rules as revised
in 2010 to include, in a new article 1, paragraph 4, a reference
to the Rules on Transparency,3
Noting also that the Rules on Transparency are available

for use in investor-State arbitrations initiated under rules other
than the Arbitration Rules or in ad hoc proceedings,
Noting further that the preparation of the Rules on

Transparency was the subject of due deliberation in the

Commission and that they benefited from consultations with
Governments and interested intergovernmental and international
non-governmental organizations,
1. Expresses its appreciation to the United Nations

Commission on International Trade Law for having prepared
and adopted the Rules on Transparency in Treaty-based
Investor-State Arbitration2 and the Arbitration Rules (as revised
in 2010, with new article 1, paragraph 4, as adopted in 2013),3
as annexed to the report of the Commission on the work of its
forty-sixth session;4
2. Requests the Secretary-General to publish, including

electronically, and disseminate broadly the text of the Rules on
Transparency, both together with the Arbitration Rules (as
revised in 2010, with new article 1, paragraph 4, as adopted in
2013) and as a stand-alone text, and to transmit them to
Governments and organizations interested in the field of dispute
settlement;
3. Recommends the use of the Rules on Transparency in

relation to the settlement of investment disputes within the
scope of their application as defined in article 1 of the Rules,
and invites Member States that have chosen to include the Rules
in their treaties to inform the Commission accordingly;
4. Also recommends that, subject to any provision in rele

vant treaties that may require a higher degree of transparency
2
Ibid., Sixty-eighth Session, Supplement No. 17 (A/68/17),
chap. III and annex I.
3
Ibid., chap. III and annex II.
4
Official Records of the General Assembly, Sixty-eighth Ses-
sion, Supplement No. 17 (A/68/17).
2
209
than that provided in the Rules on Transparency, the Rules be
applied through appropriate mechanisms to investor-State arbi-
tration initiated pursuant to treaties providing for the protection
of investors or investments concluded before the date of coming
into effect of the Rules, to the extent that such application is
consistent with those treaties.
68th plenary meeting

16 December 2013
3
210
211
UNCITRAL Rules on Transparency in
Treaty-based Investor-State Arbitration
Article 1. Scope of application
Applicability of the Rules
1. The UNCITRAL Rules on Transparency in Treaty-based

Investor-State Arbitration (“Rules on Transparency”) shall apply
to investor-State arbitration initiated under the UNCITRAL
Arbitration Rules pursuant to a treaty providing for the pro
tection of investments or investors (“treaty”)* concluded on or
after 1 April 2014 unless the Parties to the treaty** have agreed
otherwise.
2. In investor-State arbitrations initiated under the U

NCITRAL
Arbitration Rules pursuant to a treaty concluded before 1 April
2014, these Rules shall apply only when:
(a) The parties to an arbitration (the “disputing parties”)
agree to their application in respect of that arbitration; or
(b) The Parties to the treaty or, in the case of a multi
lateral treaty, the State of the claimant and the respondent State,
have agreed after 1 April 2014 to their application.
Application of the Rules
3. In any arbitration in which the Rules on Transparency

apply pursuant to a treaty or to an agreement by the Parties to
that treaty:
(a) The disputing parties may not derogate from these
Rules, by agreement or otherwise, unless permitted to do so by
the treaty;
*For the purposes of the Rules on Transparency, a “treaty” shall be under-

stood broadly as encompassing any bilateral or multilateral treaty that contains
provisions on the protection of investments or investors and a right for investors
to resort to arbitration against Parties to the treaty, including any treaty commonly
referred to as a free trade agreement, economic integration agreement, trade and
investment framework or cooperation agreement, or bilateral investment treaty.
**For the purposes of the Rules on Transparency, any reference to a “Party
to the treaty” or a “State” includes, for example, a regional economic integration
organization where it is a Party to the treaty.
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(b) The arbitral tribunal shall have the power, besides its
discretionary authority under certain provisions of these Rules,
to adapt the requirements of any specific provision of these
Rules to the particular circumstances of the case, after consulta-
tion with the disputing parties, if such adaptation is necessary
to conduct the arbitration in a practical manner and is consistent
with the transparency objective of these Rules.
Discretion and authority of the arbitral tribunal
4. Where the Rules on Transparency provide for the arbitral

tribunal to exercise discretion, the arbitral tribunal in exercising
such discretion shall take into account:
(a) The public interest in transparency in treaty-based
investor-State arbitration and in the particular arbitral proceed-
ings; and
(b) The disputing parties’ interest in a fair and efficient
resolution of their dispute.
5. These Rules shall not affect any authority that the arbitral
tribunal may otherwise have under the UNCITRAL Arbitration
Rules to conduct the arbitration in such a manner as to promote
transparency, for example by accepting submissions from third
persons.
6. In the presence of any conduct, measure or other action

having the effect of wholly undermining the transparency objec-
tives of these Rules, the arbitral tribunal shall ensure that those
objectives prevail.
Applicable instrument in case of conflict
7. Where the Rules on Transparency apply, they shall sup-

plement any applicable arbitration rules. Where there is a con-
flict between the Rules on Transparency and the applicable
arbitration rules, the Rules on Transparency shall prevail. Not-
withstanding any provision in these Rules, where there is a
conflict between the Rules on Transparency and the treaty, the
provisions of the treaty shall prevail.
8. Where any of these Rules is in conflict with a provision

of the law applicable to the arbitration from which the disputing
parties cannot derogate, that provision shall prevail.
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Application in non-UNCITRAL arbitrations
9. These Rules are available for use in investor-State arbi

trations initiated under rules other than the UNCITRAL
Arbitration Rules or in ad hoc proceedings.
Article 2. Publication of information at the

commencement of arbitral proceedings
Once the notice of arbitration has been received by the respond-

ent, each of the disputing parties shall promptly communicate
a copy of the notice of arbitration to the repository referred to
under article 8. Upon receipt of the notice of arbitration from
the respondent, or upon receipt of the notice of arbitration and
a record of its transmission to the respondent, the repository
shall promptly make available to the public information
regarding the name of the disputing parties, the economic

sector involved and the treaty under which the claim is

being made.
Article 3. Publication of documents
1. Subject to article 7, the following documents shall be made

available to the public: the notice of arbitration, the response
to the notice of arbitration, the statement of claim, the statement
of defence and any further written statements or written sub
missions by any disputing party; a table listing all exhibits to
the aforesaid documents and to expert reports and witness
statements, if such table has been prepared for the proceedings,
but not the exhibits themselves; any written submissions by the
non-disputing Party (or Parties) to the treaty and by third
persons, transcripts of hearings, where available; and orders,
decisions and awards of the arbitral tribunal.
2. Subject to article 7, expert reports and witness statements,

exclusive of the exhibits thereto, shall be made available to the
public, upon request by any person to the arbitral tribunal.
3. Subject to article 7, the arbitral tribunal may decide, on

its own initiative or upon request from any person, and after
consultation with the disputing parties, whether and how to
make available exhibits and any other documents provided to,
or issued by, the arbitral tribunal not falling within paragraphs 1
or 2 above. This may include, for example, making such docu-
ments available at a specified site.
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4. The documents to be made available to the public pursuant
to paragraphs 1 and 2 shall be communicated by the arbitral
tribunal to the repository referred to under article 8 as soon as
possible, subject to any relevant arrangements or time limits for
the protection of confidential or protected information pre-
scribed under article 7. The documents to be made available
pursuant to paragraph 3 may be communicated by the arbitral
tribunal to the repository referred to under article 8 as they
become available and, if applicable, in a redacted form in
accordance with article 7. The repository shall make all docu-
ments available in a timely manner, in the form and in the
language in which it receives them.
5. A person granted access to documents under paragraph 3

shall bear any administrative costs of making those documents
available to that person, such as the costs of photocopying or
shipping documents to that person, but not the costs of making
those documents available to the public through the
repository.
Article 4. Submission by a third person
1. After consultation with the disputing parties, the arbi-

tral tribunal may allow a person that is not a disputing party,
and not a non-disputing Party to the treaty (“third person(s)”),
to file a written submission with the arbitral tribunal regarding
a matter within the scope of the dispute.
2. A third person wishing to make a submission shall

apply to the arbitral tribunal, and shall, in a concise written
statement, which is in a language of the arbitration and complies
with any page limits set by the arbitral tribunal:
(a) Describe the third person, including, where relevant,
its membership and legal status (e.g., trade association or other
non-governmental organization), its general objectives, the
nature of its activities and any parent organization (including
any organization that directly or indirectly controls the third
person);
(b) Disclose any connection, direct or indirect, which the
third person has with any disputing party;
(c) Provide information on any government, person or
organization that has provided to the third person (i) any finan-
cial or other assistance in preparing the submission; or (ii)
substantial assistance in either of the two years preceding the
application by the third person under this article (e.g. funding
around 20 per cent of its overall operations annually);
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(d) Describe the nature of the interest that the third person
has in the arbitration; and
(e) Identify the specific issues of fact or law in the arbi-
tration that the third person wishes to address in its written
submission.
3. In determining whether to allow such a submission, the

arbitral tribunal shall take into consideration, among other
factors it determines to be relevant:
(a) Whether the third person has a significant interest in
the arbitral proceedings; and
(b) The extent to which the submission would assist the
arbitral tribunal in the determination of a factual or legal issue
related to the arbitral proceedings by bringing a perspective,
particular knowledge or insight that is different from that of the
disputing parties.
4. The submission filed by the third person shall:

(a) Be dated and signed by the person filing the submis-
sion on behalf of the third person;
(b) Be concise, and in no case longer than as authorized
by the arbitral tribunal;
(c) Set out a precise statement of the third person’s posi-
tion on issues; and
(d) Address only matters within the scope of the dispute.
5. The arbitral tribunal shall ensure that any submission does

not disrupt or unduly burden the arbitral proceedings, or unfairly
prejudice any disputing party.
6. The arbitral tribunal shall ensure that the disputing parties

are given a reasonable opportunity to present their observations
on any submission by the third person.
Article 5. Submission by a non-disputing Party

to the treaty
1. The arbitral tribunal shall, subject to paragraph 4, allow,

or, after consultation with the disputing parties, may invite,
submissions on issues of treaty interpretation from a non-
disputing Party to the treaty.
2. The arbitral tribunal, after consultation with the disputing

parties, may allow submissions on further matters within the
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scope of the dispute from a non-disputing Party to the treaty.
In determining whether to allow such submissions, the arbitral
tribunal shall take into consideration, among other factors it
determines to be relevant, the factors referred to in article 4,
paragraph 3, and, for greater certainty, the need to avoid sub-
missions which would support the claim of the investor in a
manner tantamount to diplomatic protection.
3. The arbitral tribunal shall not draw any inference from the
absence of any submission or response to any invitation p ursuant
to paragraphs 1 or 2.
4. The arbitral tribunal shall ensure that any submission does

not disrupt or unduly burden the arbitral proceedings, or unfairly
prejudice any disputing party.
5. The arbitral tribunal shall ensure that the disputing parties

are given a reasonable opportunity to present their observations
on any submission by a non-disputing Party to the treaty.
Article 6. Hearings
1. Subject to article 6, paragraphs 2 and 3, hearings for the

presentation of evidence or for oral argument (“hearings”) shall
be public.
2. Where there is a need to protect confidential information

or the integrity of the arbitral process pursuant to article 7, the
arbitral tribunal shall make arrangements to hold in private that
part of the hearing requiring such protection.
3. The arbitral tribunal shall make logistical arrangements to

facilitate the public access to hearings (including where appro-
priate by organizing attendance through video links or such
other means as it deems appropriate). However, the arbitral
tribunal may, after consultation with the disputing parties,
decide to hold all or part of the hearings in private where this
becomes necessary for logistical reasons, such as when the cir-
cumstances render any original arrangement for public access
to a hearing infeasible.
Article 7. Exceptions to transparency
Confidential or protected information
1. Confidential or protected information, as defined in para-

graph 2 and as identified pursuant to the arrangements referred
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to in paragraphs 3 and 4, shall not be made available to the
public pursuant to articles 2 to 6.
2. Confidential or protected information consists of:

(a) Confidential business information;
(b) Information that is protected against being made
available to the public under the treaty;
(c) Information that is protected against being made
available to the public, in the case of the information of the
respondent State, under the law of the respondent State, and in
the case of other information, under any law or rules determined
by the arbitral tribunal to be applicable to the disclosure of such
information; or
(d) Information the disclosure of which would impede
law enforcement.
3. The arbitral tribunal, after consultation with the disputing

parties, shall make arrangements to prevent any confidential or
protected information from being made available to the public,
including by putting in place, as appropriate:
(a) Time limits in which a disputing party, non-disputing
Party to the treaty or third person shall give notice that it seeks
protection for such information in documents;
(b) Procedures for the prompt designation and redaction
of the particular confidential or protected information in such
documents; and
(c) Procedures for holding hearings in private to the
extent required by article 6, paragraph 2.
Any determination as to whether information is confidential or

protected shall be made by the arbitral tribunal after consulta-
tion with the disputing parties.
4. Where the arbitral tribunal determines that information

should not be redacted from a document, or that a document
should not be prevented from being made available to the
public, any disputing party, non-disputing Party to the treaty or
third person that voluntarily introduced the document into the
record shall be permitted to withdraw all or part of the docu-
ment from the record of the arbitral proceedings.
5. Nothing in these Rules requires a respondent State to make

available to the public information the disclosure of which it
considers to be contrary to its essential security interests.
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Integrity of the arbitral process
6. Information shall not be made available to the public pur-

suant to articles 2 to 6 where the information, if made available
to the public, would jeopardize the integrity of the arbitral
process as determined pursuant to paragraph 7.
7. The arbitral tribunal may, on its own initiative or upon the

application of a disputing party, after consultation with the
disputing parties where practicable, take appropriate measures
to restrain or delay the publication of information where such
publication would jeopardize the integrity of the arbitral process
because it could hamper the collection or production of evi-
dence, lead to the intimidation of witnesses, lawyers acting for
disputing parties or members of the arbitral tribunal, or in
comparably exceptional circumstances.
Article 8. Repository of published information
The repository of published information under the Rules on

Transparency shall be the Secretary-General of the United
Nations or an institution named by UNCITRAL.
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Printed in Austria
*1400030*
V.14-00030—January 2014—750
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WEEK 8: MULTI-PARTY AND CLASS ARBITRATION
March 7, 2023
Relevant Rules
1. HKIAC, Administered Arbitration Rules, arts. 27-28 (2013)
2. ICC, Rules of Arbitration, arts. 7-10 (2012)
3. LCIA, Arbitration Rules, art. 22.1(h) (1998)
4. UNCITRAL, Arbitration Rules, art. 17(5) (2010)
Required Readings
1. ICDR, AAA Supplementary Rules for Class Arbitrations (2003)
2. Charter Institute of Arbitrators, “Practice Guideline 15: Guidelines for Arbitrators on how
to approach issues relating to Multi-Party Arbitrations.” Available at:
https://www.ciarb.org/media/1278/2011multipartyarbitrations.pdf
3. Am. Express Co. v. Italian Colors Rest., No. 12-133 (U.S. June 20, 2013)
Abaclat v. Rep. of Arg., ICSID No. ARB/07/5, Decision on Jurisdiction and Admissibility,
4. ¶¶ 506-55 (Aug. 4, 2011)
Parker v. Dimension Service Corp., 2018-Ohio-5248 (2018)
5.
Proposals for Amendment of the ICSID Rules – Working Paper, Schedule 7: Multiparty Claims
6.
and Consolidation, pgs. 833-54 – Available at:
https://icsid.worldbank.org/en/Documents/Amendments_Vol_3_Schedule%207.pdf
Supplementary Rules for Class Arbitrations
Rules Effective October 8, 2003
Fees Effective January 1, 2010
Table of Contents
1. Applicability 1
2. Class Arbitration Roster and Number of Arbitrators 2
3. Construction of the Arbitration Clause 2
4. Class Certification 2
5. Class Determination Award 3
6. Notice of Class Determination 4
7. Final Award 4
8. Settlement, Voluntary Dismissal, or Compromise 5
9. Confidentiality; Class Arbitration Docket 5
10. Form and Publication of Awards 5
11. Administrative Fees and Suspension for Nonpayment 6
12. Applications to Court and Exclusion of Liability 6
1. Applicability
(a) These Supplementary Rules for Class Arbitrations ("Supplementary Rules") shall apply to any dispute
arising out of an agreement that provides for arbitration pursuant to any of the rules of the
American Arbitration Association ("AAA") where a party submits a dispute to arbitration on
behalf of or against a class or purported class, and shall supplement any other applicable AAA
rules. These Supplementary Rules shall also apply whenever a court refers a matter pleaded as a
class action to the AAA for administration, or when a party to a pending AAA arbitration asserts
new claims on behalf of or against a class or purported class.
(b) Where inconsistencies exist between these Supplementary Rules and other AAA rules that apply to
the dispute, these Supplementary Rules will govern. The arbitrator shall have the authority to
resolve any inconsistency between any agreement of the parties and these Supplementary Rules,
and in doing so shall endeavor to avoid any prejudice to the interests of absent members of a class
or purported class.
(c) Whenever a court has, by order, addressed and resolved any matter that would otherwise be decided
by an arbitrator under these Supplementary Rules, the arbitrator shall follow the order of the
court.
2. Class Arbitration Roster and Number of Arbitrators
225
(a) In any arbitration conducted pursuant to these Supplementary Rules, at least one of the arbitrators
shall be appointed from the AAA's national roster of class arbitration arbitrators.
(b) If the parties cannot agree upon the number of arbitrators to be appointed, the dispute shall be heard
by a sole arbitrator unless the AAA, in its discretion, directs that three arbitrators be appointed.
As used in these Supplementary Rules, the term "arbitrator" includes both one and three
arbitrators.
3. Construction of the Arbitration Clause

Upon appointment, the arbitrator shall determine as a threshold matter, in a reasoned, partial final award
on the construction of the arbitration clause, whether the applicable arbitration clause permits the
arbitration to proceed on behalf of or against a class (the "Clause Construction Award"). The arbitrator
shall stay all proceedings following the issuance of the Clause Construction Award for a period of at least
30 days to permit any party to move a court of competent jurisdiction to confirm or to vacate the Clause
Construction Award. Once all parties inform the arbitrator in writing during the period of the stay that
they do not intend to seek judicial review of the Clause Construction Award, or once the requisite time
period expires without any party having informed the arbitrator that it has done so, the arbitrator may
proceed with the arbitration on the basis stated in the Clause Construction Award. If any party informs the
arbitrator within the period provided that it has sought judicial review, the arbitrator may stay further
proceedings, or some part of them, until the arbitrator is informed of the ruling of the court.
In construing the applicable arbitration clause, the arbitrator shall not consider the existence of these
Supplementary Rules, or any other AAA rules, to be a factor either in favor of or against permitting the
arbitration to proceed on a class basis.
4. Class Certification
(a) Prerequisites to a Class Arbitration
If the arbitrator is satisfied that the arbitration clause permits the arbitration to proceed as a class
arbitration, as provided in Rule 3, or where a court has ordered that an arbitrator determine
whether a class arbitration may be maintained, the arbitrator shall determine whether the
arbitration should proceed as a class arbitration. For that purpose, the arbitrator shall consider the
criteria enumerated in this Rule 4 and any law or agreement of the parties the arbitrator
determines applies to the arbitration. In doing so, the arbitrator shall determine whether one or
more members of a class may act in the arbitration as representative parties on behalf of all
members of the class described. The arbitrator shall permit a representative to do so only if each
of the following conditions is met:
(1) the class is so numerous that joinder of separate arbitrations on behalf of all members is impracticable;
(2) there are questions of law or fact common to the class;
(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class;
(4) the representative parties will fairly and adequately protect the interests of the class;
(5) counsel selected to represent the class will fairly and adequately protect the interests of the class; and
(6) each class member has entered into an agreement containing an arbitration clause which is
substantially similar to that signed by the class representative(s) and each of the other class
226
members.
(b) Class Arbitrations Maintainable
An arbitration may be maintained as a class arbitration if the prerequisites of subdivision (a) are
satisfied, and in addition, the arbitrator finds that the questions of law or fact common to the
members of the class predominate over any questions affecting only individual members, and that
a class arbitration is superior to other available methods for the fair and efficient adjudication of
the controversy. The matters pertinent to the findings include:
(1) the interest of members of the class in individually controlling the prosecution or defense of separate
arbitrations;
(2) the extent and nature of any other proceedings concerning the controversy already commenced by or
against members of the class;
(3) the desirability or undesirability of concentrating the determination of the claims in a single arbitral
forum; and
(4) the difficulties likely to be encountered in the management of a class arbitration.
5. Class Determination Award

(a) The arbitrator's determination concerning whether an arbitration should proceed as a class arbitration
shall be set forth in a reasoned, partial final award (the "Class Determination Award"), which
shall address each of the matters set forth in Rule 4.
(b) A Class Determination Award certifying a class arbitration shall define the class, identify the class
representative(s) and counsel, and shall set forth the class claims, issues, or defenses. A copy of
the proposed Notice of Class Determination (see Rule 6), specifying the intended mode of
delivery of the Notice to the class members, shall be attached to the award.
(c) The Class Determination Award shall state when and how members of the class may be excluded from
the class arbitration. If an arbitrator concludes that some exceptional circumstance, such as the
need to resolve claims seeking injunctive relief or claims to a limited fund, makes it inappropriate
to allow class members to request exclusion, the Class Determination Award shall explain the
reasons for that conclusion.
(d) The arbitrator shall stay all proceedings following the issuance of the Class Determination Award for
a period of at least 30 days to permit any party to move a court of competent jurisdiction to
confirm or to vacate the Class Determination Award. Once all parties inform the arbitrator in
writing during the period of the stay that they do not intend to seek judicial review of the Class
Determination Award, or once the requisite time period expires without any party having
informed the arbitrator that it has done so, the arbitrator may proceed with the arbitration on the
basis stated in the Class Determination Award. If any party informs the arbitrator within the
period provided that it has sought judicial review, the arbitrator may stay further proceedings, or
some part of them, until the arbitrator is informed of the ruling of the court.
(e) A Class Determination Award may be altered or amended by the arbitrator before a final award is
rendered.
6. Notice of Class Determination
227
(a) In any arbitration administered under these Supplementary Rules, the arbitrator shall, after expiration
of the stay following the Class Determination Award, direct that class members be provided the
best notice practicable under the circumstances (the "Notice of Class Determination"). The Notice
of Class Determination shall be given to all members who can be identified through reasonable
effort.
(b) The Notice of Class Determination must concisely and clearly state in plain, easily understood
language:
(1) the nature of the action;
(2) the definition of the class certified;
(3) the class claims, issues, or defenses;
(4) that a class member may enter an appearance through counsel if the member so desires, and
that any class member may attend the hearings;
(5) that the arbitrator will exclude from the class any member who requests exclusion, stating
when and how members may elect to be excluded;
(6) the binding effect of a class judgment on class members;
(7) the identity and biographical information about the arbitrator, the class representative(s) and
class counsel that have been approved by the arbitrator to represent the class; and
(8) how and to whom a class member may communicate about the class arbitration, including
information about the AAA Class Arbitration Docket (see Rule 9).
7. Final Award
The final award on the merits in a class arbitration, whether or not favorable to the class, shall be
reasoned and shall define the class with specificity. The final award shall also specify or describe those to
whom the notice provided in Rule 6 was directed, those the arbitrator finds to be members of the class,
and those who have elected to opt out of the class.
8. Settlement, Voluntary Dismissal, or Compromise

(a) (1) Any settlement, voluntary dismissal, or compromise of the claims, issues, or defenses of an
arbitration filed as a class arbitration shall not be effective unless approved by the arbitrator.
(2) The arbitrator must direct that notice be provided in a reasonable manner to all class members
who would be bound by a proposed settlement, voluntary dismissal, or compromise.
(3) The arbitrator may approve a settlement, voluntary dismissal, or compromise that would bind
class members only after a hearing and on finding that the settlement, voluntary dismissal, or
compromise is fair, reasonable, and adequate.
(b) The parties seeking approval of a settlement, voluntary dismissal, or compromise under this Rule must
submit to the arbitrator any agreement made in connection with the proposed settlement,
voluntary dismissal, or compromise.
(c) The arbitrator may refuse to approve a settlement unless it affords a new opportunity to request
228
exclusion to individual class members who had an earlier opportunity to request exclusion but did
not do so.
(d) Any class member may object to a proposed settlement, voluntary dismissal, or compromise that
requires approval under this Rule. Such an objection may be withdrawn only with the approval of
the arbitrator.
9. Confidentiality; Class Arbitration Docket

(a) The presumption of privacy and confidentiality in arbitration proceedings shall not apply in class
arbitrations. All class arbitration hearings and filings may be made public, subject to the authority
of the arbitrator to provide otherwise in special circumstances. However, in no event shall class
members, or their individual counsel, if any, be excluded from the arbitration hearings.
(b) The AAA shall maintain on its Web site a Class Arbitration Docket of arbitrations filed as class
arbitrations. The Class Arbitration Docket will provide certain information about the arbitration
to the extent known to the AAA, including:
(1) a copy of the demand for arbitration;
(2) the identities of the parties;
(3) the names and contact information of counsel for each party;
(4) a list of awards made in the arbitration by the arbitrator; and
(5) the date, time and place of any scheduled hearings.
10. Form and Publication of Awards

(a) Any award rendered under these Supplementary Rules shall be in writing, shall be signed by the
arbitrator or a majority of the arbitrators, and shall provide reasons for the award.
(b) All awards rendered under these Supplementary Rules shall be publicly available, on a cost basis.
11. Administrative Fees and Suspension for Nonpayment

(a) A preliminary filing fee of $3,350 is payable in full by a party making a demand for treatment of a
claim, counterclaim, or additional claim as a class arbitration. The preliminary filing fee shall
cover all AAA administrative fees through the rendering of the Clause Construction Award. If the
arbitrator determines that the arbitration shall proceed beyond the Clause Construction Award, a
supplemental filing fee shall be paid by the requesting party. The supplemental filing fee shall be
calculated based on the amount claimed in the class arbitration and in accordance with the fee
schedule contained in the AAA's Commercial Arbitration Rules.
(b) Disputes regarding the parties' obligation to pay administrative fees or arbitrator's compensation
pursuant to applicable law or the parties' agreement may be determined by the arbitrator. Upon
the joint application of the parties, however, an arbitrator other than the arbitrator appointed to
decide the merits of the arbitration, shall be appointed by the AAA to render a partial final award
solely related to any disputes regarding the parties' obligations to pay administrative fees or
arbitrator's compensation.
(c) If an invoice for arbitrator compensation or administrative charges has not been paid in full, the AAA
229
may so inform the parties in order that one of them may advance the required deposit. If such
payments are not made, the arbitrator may order the suspension or termination of the proceedings.
If no arbitrator has yet been appointed, the AAA may suspend the proceedings.
(d) If an arbitration conducted pursuant to these Supplementary Rules is suspended for nonpayment, a
notice that the case has been suspended shall be published on the AAA's Class Arbitration
Docket.
12. Applications to Court and Exclusion of Liability

(a) No judicial proceeding initiated by a party relating to a class arbitration shall be deemed a waiver of
the party's right to arbitrate.
(b) Neither the AAA nor any arbitrator in a class arbitration or potential class arbitration under these
Supplementary Rules is a necessary or proper party in or to judicial proceedings relating to the
arbitration. It is the policy of the AAA to comply with any order of a court directed to the parties
to an arbitration or with respect to the conduct of an arbitration, whether or not the AAA is named
as a party to the judicial proceeding in which the order is issued.
(c) Parties to a class arbitration under these Supplementary Rules shall be deemed to have consented that
judgment upon each of the awards rendered in the arbitration may be entered in any federal or
state court having jurisdiction thereof.
(d) Parties to an arbitration under these Supplementary Rules shall be deemed to have consented that
neither the AAA nor any arbitrator shall be liable to any party in any action seeking damages or
injunctive relief for any act or omission in connection with any arbitration under these
Supplementary Rules.
© 2011 American Arbitration Association, Inc. All rights reserved. These Rules are the copyrighted property of the American
Arbitration Association (AAA) and are intended to be used in conjunction with the AAA's administrative services. Any
unauthorized use or modification of these Rules may violate copyright laws and other applicable laws. Please contact
800.778.7879 or websitemail@adr.org for additional information.
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Practice Guideline 15: Guidelines for Arbitrators on how to approach issues relating to Multi-Party
Arbitrations
1. Introduction
1.1 From time to time arbitrators will encounter problems in dealing with multi-party
situations. Such problems can arise in any type of arbitration but they are particularly
common in maritime, construction and sale of goods cases where it is normal that if a
dispute arises it will affect more than one contract. In a chain contract (for example in the
sale and re-sale of goods or the chartering and sub-chartering of a ship), if one party in the
chain makes a claim against its contractual partner, the latter will seek to pass on liability to
a third, who could be its supplier in a sale of goods case or the head charterer in a
charterparty case. Similarly a dispute between the building owner and main contractor could
result in either party seeking to bring a sub-contractor or the architect or structural engineer
into the dispute so as to pass on liability or so as to pursue an alternative remedy.
1.2 Arbitration is not well-adapted to deal with such situations. If separate arbitrations
are conducted under each of the related contracts, there is a risk that different tribunals
may be appointed under each contract or that the evidence or arguments may differ in each
with the result that separate tribunals may reach different conclusions on common
questions of fact or law. But in a multi-party situation the parties normally need a single
ruling on common issues which can then be applied so as to produce consistent results in all
the related contracts. In this way liability can be passed “up or down the line” and the risk
can be avoided of an intermediate party bearing the whole loss where it has contracted
under two “back-to-back” contracts. Similarly, consistent results can be achieved where a
claimant has a choice of two alternative remedies against different respondents or where for
some other reason there are related transactions.
1.3 Neither English law nor the law in force in most other jurisdictions provides an
arbitral tribunal or the Court with a general power to ensure that, in a multi-party situation,
two or more arbitrations will be considered by the same tribunal either at the same hearing
or at immediately succeeding hearings to avoid the danger of inconsistent awards. The main
reason for this is the principle of party autonomy. Arbitration is a consensual method of
resolving commercial disputes. There is in general no justification for any intervention by the
232
Court to require the dispute to be determined otherwise than in accordance with the
parties’ agreement. The second reason for this is the principle of the confidentiality, or
privacy, of arbitration proceedings. By ordering the consolidation of two or more
arbitrations or allowing a third party to one arbitration to be present at the arbitration at the
same time as the parties to that arbitration, the principle of confidentiality, applying as
between the parties to the arbitration, may be said to be infringed; on a practical level
parties who do not wish to share sensitive information about a commercial situation may be
forced to do so with companies with whom they have not contracted.
1.4 In the discussions which led to the passing of the Arbitration Act 1996 the
Departmental Advisory Committee (DAC) was pressed with the need to find a pragmatic
solution. It was urged that there should be a discretion vested in the Court to order the
concurrent hearings of two or more arbitrations where necessary to avoid inconsistent
conclusions of fact or law. Other similar solutions were advanced. The view was taken
however that the existence of any legislative power to order concurrent hearings would be
seen as an unattractive element of intervention by the Court in the arbitration process,
would constitute a risk to the confidentiality of that process, would depart from the
UNCITRAL Model Law and could even endanger the enforceability of the award under the
New York Convention. The DAC saw no objection to an arbitral tribunal ordering two or
more arbitrations to be consolidated or heard concurrently provided that the parties had so
agreed. It was not in favour of allowing an arbitral tribunal to do this where there was no
such agreement.
2. Arbitration Act 1996, Section 35
2.1 Section 35 provides:
“(1) The parties are free to agree—
(a) that the arbitral proceedings shall be consolidated with other arbitral
proceedings, or
(b) that concurrent hearings shall be held, on such terms as may be agreed.
(2) Unless the parties agree to confer such power on the tribunal, the tribunal has no
power to order consolidation of proceedings or concurrent hearings.”
As the wording of the section makes clear, Section 35 is not a mandatory provision.
233
2.2 The concepts of “consolidation” and “concurrent hearings” are not defined in the
Act. Consolidation involves turning or combining all the related disputes into a single
arbitration. It may result in the arbitral tribunal having the right to issue a single award
determining all the issues which have arisen between the different parties involved. The
holding of concurrent hearings involves hearing the evidence and legal submissions arising in
one arbitration at the same time as hearing the evidence and legal submissions in a different
arbitration. Otherwise the two arbitrations proceed separately and the tribunal issues
separate awards.
2.3 An arbitration may be held partially concurrently with another arbitration. Where
common issues of fact or law arise, it may be appropriate, where the parties have so agreed,
that the tribunal should hear the evidence and submissions on that issue concurrently and
that on other issues the two arbitrations should continue separately. This is sometimes
called partial joinder and may be useful.
3. The Position in Other Jurisdictions
3.1 It is comparatively rare that a Court in any jurisdiction has the power to order
consolidation or concurrent hearings in the absence of agreement by the parties. Courts in
the Netherlands, in Hong Kong (in domestic cases) and in some United States jurisdictions
have the power to do so. Where this exceptional power exists, the parties may be able to
exclude the power by agreement.
4. Agreement to Consolidation or Concurrent Hearings
4.1 Section 35 does not limit the circumstances in which the parties are free to agree
that the arbitral proceedings shall be consolidated or that concurrent hearings shall be held.
There are however two main types of agreement. The first is where the terms of the
contract or of the arbitration clause specifically empower the arbitral tribunal to order
consolidation or concurrent hearings. The second arises where, in the course of a current
reference, the parties reach an ad hoc procedural agreement that the proceedings shall be
consolidated with another arbitration or that the hearings of both arbitrations shall proceed
concurrently whether wholly or in part.
4.2 Contractual Terms And Rules
4.2.1 Arbitrators need to be aware of the relevant provisions of the rules that they are
operating under. Some arbitration institutions have no provision allowing the tribunal or the
234
organisation to consolidate or hold concurrent hearings in the absence of the parties’
agreement. The ICC is an example of this. At the other extreme, Rule 7 of GAFTA Form 125’s
Arbitration Rules and Rule 6(c) of FOSFA Rules of Arbitration and Appeal provide that, in a
dispute about quality or condition of goods sold under a string of contracts where the
agreements are materially identical except as to price or delivery date, the arbitration can
take place between the first seller and the last buyer in the string as if the contract had
taken place between them. The resulting award binds all the parties in the string. This
essentially entitles the parties to ignore the lack of a contractual relationship between the
end-buyer and the original vendor of the goods.
4.2.2 Clause 18(10)(b) of the CECA form of Sub-Contract, usually known as the Blue
Form, allows the Contractor to serve a notice on the sub-contractor requiring any
subcontract dispute to be resolved along with a matter raised in an arbitration under the
main Contract so long as it is of the opinion that the two disputes have a connection with
each other. The new Swiss International Rules give the Chamber of Commerce handling the
case the power to consolidate cases covered by an agreement submitting the relevant
disputes to the same rules. If a third party wants to participate in a case otherwise, the
tribunal has a discretion in the matter.
4.2.3 LCIA Rule 22.1(h) allows a party, in the absence of any agreement to the contrary, to
ask the tribunal for an order joining a third party to the arbitration if the third party has
agreed to this. The respondent’s wishes can effectively be overruled by the tribunal. It will,
though, have the right to make representations on the subject. The effect of the tribunal’s
decision can either be to consolidate the two disputes into one arbitration or to hold
hearings concurrently. The Chartered Institute of Arbitrators Rules, the Construction
Industry Model Arbitration Rules (CIMAR) and the ICE rules all enable a tribunal appointed in
the same case to order concurrent hearings with the Chartered Institute, but not the other
two, giving the tribunal the power to consolidate.
4.2.4 Article 7.3 of the Chartered Institute of Arbitrators Rules provides that where the
same tribunal is appointed under the rules in two or more cases that appear to raise
common issues, regardless of whether they involve the same parties, the tribunal can direct
either the consolidation or concurrent hearing of the arbitrations as a whole or any specific
claims or issues. Under Article 7.7, the tribunal can subsequently revoke such an order. The
CIMAR insist that anyone required to appoint an arbitrator where two or more related
235
proceedings on the same project fall under separate arbitral agreements give due
consideration to whether they should not appoint the same arbitrator for both (Rule 2.6).
The fact that someone has already been appointed is a factor that must be considered (Rule
2.7). After this, Rule 3.7 entitles an arbitrator appointed in two or more related proceedings
on the same project each of which involves a common issue to order the concurrent hearing
of any two cases or issues. In contrast to the Chartered Institute rules, the arbitrator has no
power to impose consolidation on the parties (Rule 3.9). Where that agreement is
forthcoming, the arbitrator still retains a discretion in the matter. As with the Chartered
Institute Rules, the order can be revoked at any time.
4.2.5 Rule 9 of the Institute of Civil Engineers Arbitration Procedure enables an arbitrator
who has been appointed to determine more than one dispute concerned wholly or mainly
with the same subject matter, to order concurrent hearings if one of the parties, being a
party to all the contracts concerned, asks for it or the parties agree. As with CIMAR, separate
awards, though, must be rendered. In a similar way, Article 14(b) of the LMAA Terms gives
the arbitral tribunal the power to order concurrent hearings where two or more cases
appear to raise common issues. This provision makes it clear that the tribunal can issue
directions about documents disclosed in one case being made available to the parties in the
other cases. Equally, the panel can order that the evidence given in one case can be heard in
the others subject to everyone having a reasonable opportunity to comment on it. Article
1.11 of Scottish Arbitration Code (1999), says: “Where the same arbitral tribunal is
appointed in two or more arbitral proceedings relating to the same project, each of which
involves some common issue whether or not involving the same parties, the arbitral tribunal
may if it considers it appropriate order the concurrent hearing of any such proceedings, or of
any claim or issue arising in such proceedings upon such term or terms as it considers
appropriate in all the circumstances.” Under the proposed Arbitration (Scotland) Bill, which
will cover domestic cases, the parties are assumed, in the absence of agreement to the
contrary, to have agreed to the Code’s application.
5. Practice Guidance
5.1 Problems with multiparty arbitrations are always best resolved by agreement
between the parties. While arbitrators may make suggestions as to how to deal with the
type of questions discussed in this guideline, it is vital that they do not make orders for
consolidation or concurrent hearings unless the arbitration agreement (including any rules
236
incorporated in it) permits this. Arbitrators should be very wary of making any order in this
area that the parties have not expressly requested. If an issue of this kind arises, arbitrators
should first explore the possibility of agreement before going further.
5.2 There are some cases where any order for consolidation or concurrent hearings is
precluded by factors outside the tribunal’s control, such as that different tribunals have
already been appointed under separate and independent contracts by the time that the
issue arises or even that the seat of the arbitration is different under each contract. Some
international bodies have rules which provide for the replacement of the party-appointed
arbitrators with a panel selected by the institution. The English Court has no power, in the
absence of agreement, to replace arbitrators appointed by the parties with a single tribunal
empowered to determine common issues of fact or law. In general, arbitrators should not
attempt to overcome problems of this nature but where the party-appointed arbitrators are
the same in two related contracts (for example, in two sale contracts in a “string” or in a
head charter and a sub-charter) it can be sensible that they should appoint the same third
arbitrator or umpire in each case so that, if it should later seem appropriate to order
consolidation or concurrent hearings, this can be done without the tribunal becoming
unwieldy.
5.3 If there is an issue as to whether the tribunal should consolidate two arbitrations or
hold concurrent hearings, it should follow a two-stage process. First, it needs to consider
whether it has the power to make the order, unless of course this is conceded. Second, it
must decide whether, as a matter of discretion, it would assist the progress of the two
arbitrations and be fair to the parties’ legitimate interests to order consolidation or to hold
concurrent hearings.
5.4 On the first point (the power to make the order) it should be borne in mind that if an
order of this kind is made which is not authorised by the arbitration agreement or the rules
incorporated in it, this can imperil the enforceability of any eventual award on the ground
that the tribunal has exceeded its powers (Sections 67(1)(b) and 68(2)(b)) or that the
procedure adopted did not follow the parties’ agreement (Article V(1)(d) of the New York
Convention). In some disputed cases it can be sensible to take the issue of the tribunal’s
powers as a preliminary point, to hear argument on it and subsequently to make a
preliminary award on that issue. However, ordinarily it is preferable in the interests of saving
time and expense to determine at the same time both whether the tribunal has the power
237
to order consolidation or concurrent hearings and also, as a matter of discretion, whether
any such order (and, if so, what order) should be made.
5.5 When considering as a matter of discretion what order to make, a tribunal should
normally give considerable weight to the desirability of ensuring that disputes involving
common issues are resolved consistently either through consolidation or by means of
concurrent hearings. However the tribunal should also give weight to any disadvantages that
are likely to arise from joinder. These can include any or all of the following; that, if
arbitrations are consolidated or heard together, the proceedings may become unwieldy or
unduly prolonged; that it may become difficult to select hearing dates convenient to all
affected parties and their legal representatives; that a claimant may suffer greater delay in
enforcing its legal rights than if the dispute is decided on its own without considering related
contracts; that one or more parties may incur higher legal costs than if no joinder takes
place and these may not be recoverable; that a party who does not wish to share
confidential information with a third-party to its contract may be forced to do so. The
tribunal should attempt to balance the advantage of joinder against the disadvantages likely
to result from it.
5.6 If there is to be any form of joinder, the tribunal should consider whether to hive off
those parts of the dispute that do not concern all parties. This can save time and reduce the
need for parties to attend hearings which are not relevant to them.
5.7 As far as possible arbitrators should attempt to resolve the key procedural questions
at the start of the case. If any form of consolidation or combined hearing is to be ordered,
they should decide what consequential orders should be made as regards pleadings, the
disclosure of documents and other procedural issues.
5.8 In most multi-party situations it makes more sense to order concurrent hearings of
separate arbitrations (whether of the whole arbitration or of common issues) rather than to
order a full consolidation. An order for concurrent hearings introduces as a rule less
interference with the procedure agreed by the parties than does consolidation and achieves
the same purpose. It requires that separate awards be issued in each arbitration but where
appropriate these can incorporate a common set of reasons.
5.9 Where there is any form of joinder, whether by consolidation or by means of

concurrent hearings, the tribunal has to be careful to view each transaction separately since
the existence of common issues of fact or law does not preclude the possibility that the
238
surrounding circumstances may differ in each context; that a breach of contract may have
occurred on a different date in one contract from another; or that the loss suffered by a
particular party in one arbitration may be entirely different from that sustained by the
corresponding party in another arbitration.
5.10 Where concurrent hearings are ordered, each arbitration has to be viewed
separately when allocating the recoverable costs of the proceeding. Normally the successful
party in each arbitration will recover its costs of that arbitration from the losing party unless
there are special circumstances which require the tribunal to depart from the principle that
“costs follow the event.” The question may then arise, if an order is made in one arbitration
that the successful party A should recover its costs from B, whether B in another arbitration
can pass on its liability for those costs to C. This can only be done if those costs are
recoverable as damages for a breach of contract committed by C. But if C has committed no
breach of contract this is not possible. Thus, if C made the initial claim against B which has
failed and, as a precautionary measure B attempted to pass on that claim to A, there is no
basis for any order that C must bear the costs incurred by A which have been ordered to be
reimbursed by B in the B v A arbitration
239
240
(Slip Opinion) OCTOBER TERM, 2012 1
Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is

being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
Syllabus
AMERICAN EXPRESS CO. ET AL. v. ITALIAN COLORS

RESTAURANT ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR

THE SECOND CIRCUIT
No. 12–133. Argued February 27, 2013—Decided June 20, 2013

An agreement between petitioners, American Express and a subsidiary,
and respondents, merchants who accept American Express cards, re-
quires all of their disputes to be resolved by arbitration and provides
that there “shall be no right or authority for any Claims to be arbi-
trated on a class action basis.” Respondents nonetheless filed a class
action, claiming that petitioners violated §1 of the Sherman Act and
seeking treble damages for the class under §4 of the Clayton Act. Pe-
titioners moved to compel individual arbitration under the Federal
Arbitration Act (FAA), but respondents countered that the cost of ex-
pert analysis necessary to prove the antitrust claims would greatly
exceed the maximum recovery for an individual plaintiff. The Dis-
trict Court granted the motion and dismissed the lawsuits. The Se-
cond Circuit reversed and remanded, holding that because of the pro-
hibitive costs respondents would face if they had to arbitrate, the
class-action waiver was unenforceable and arbitration could not pro-
ceed. The Circuit stood by its reversal when this Court remanded in
light of Stolt-Nielsen S. A. v. AnimalFeeds International Corp., 559
U. S. 662, which held that a party may not be compelled to submit to
class arbitration absent an agreement to do so.
Held: The FAA does not permit courts to invalidate a contractual waiv-
er of class arbitration on the ground that the plaintiff’s cost of indi-
vidually arbitrating a federal statutory claim exceeds the potential
recovery. Pp. 3–10.
(a) The FAA reflects the overarching principle that arbitration is a
matter of contract. See Rent-A-Center, West, Inc. v. Jackson, 561
U. S. ___, ___. Courts must “rigorously enforce” arbitration agree-
ments according to their terms, Dean Witter Reynolds, Inc. v. Byrd,
241
2 AMERICAN EXPRESS CO. v. ITALIAN COLORS
RESTAURANT
Syllabus
470 U. S. 213, 221, even for claims alleging a violation of a federal

statute, unless the FAA’s mandate has been “ ‘overridden by a contra-
ry congressional command,’ ” CompuCredit Corp. v. Greenwood, 565
U. S. ___, ___. Pp. 3–4.
(b) No contrary congressional command requires rejection of the
class-arbitration waiver here. The antitrust laws do not guarantee
an affordable procedural path to the vindication of every claim, see
Rodriguez v. United States, 480 U. S. 522, 525–526, or “evince an in-
tention to preclude a waiver” of class-action procedure, Mitsubishi
Motors Corp. v. Soler-Chrysler-Plymouth, Inc., 473 U. S. 614, 628.
Nor does congressional approval of Federal Rule of Civil Procedure 23
establish an entitlement to class proceedings for the vindication of
statutory rights. The Rule imposes stringent requirements for certi-
fication that exclude most claims, and this Court has rejected the as-
sertion that the class-notice requirement must be dispensed with be-
cause the “prohibitively high cost” of compliance would “frustrate
[plaintiff’s] attempt to vindicate the policies underlying the antitrust”
laws, Eisen v. Carlisle & Jacquelin, 417 U. S. 156, 167–168, 175–176.
Pp. 4–5.
(c) The “effective vindication” exception that originated as dictum
in Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U. S.
614, also does not invalidate the instant arbitration agreement. The
exception comes from a desire to prevent “prospective waiver of a
party’s right to pursue statutory remedies,” id., at 637, n. 19; but the
fact that it is not worth the expense involved in proving a statutory
remedy does not constitute the elimination of the right to pursue that
remedy. Cf. Gilmer v. Interstate/Johnson Lane Corp., 500 U. S. 20,
32; Vimar Seguros y Reaseguros, S. A. v. M/V Sky Reefer, 515 U. S.
528, 530, 534. AT&T Mobility LLC v. Concepcion, 563 U. S. ___, all
but resolves this case. There, in finding that a law that conditioned
enforcement of arbitration on the availability of class procedure inter-
fered with fundamental arbitration attributes, id., at ___, the Court
specifically rejected the argument that class arbitration was neces-
sary to prosecute claims “that might otherwise slip through the legal
system,” id., at ___. Pp. 5–9.
667 F. 3d 204, reversed.
SCALIA, J., delivered the opinion of the Court, in which ROBERTS, C. J.,
and KENNEDY, THOMAS, and ALITO, JJ., joined. THOMAS, J., filed a con-
curring opinion. KAGAN, J., filed a dissenting opinion, in which GINS-
BURG and BREYER, JJ., joined. SOTOMAYOR, J., took no part in the con-
sideration or decision of the case.
242
Cite as: 570 U. S. ____ (2013) 1
NOTICE: This opinion is subject to formal revision before publication in the

preliminary print of the United States Reports. Readers are requested to
notify the Reporter of Decisions, Supreme Court of the United States, Wash-
ington, D. C. 20543, of any typographical or other formal errors, in order
that corrections may be made before the preliminary print goes to press.

_________________
No. 12–133
_________________
AMERICAN EXPRESS COMPANY, ET AL., PETITIONERS

v. ITALIAN COLORS RESTAURANT ET AL.
APPEALS FOR THE SECOND CIRCUIT
[June 20, 2013]
JUSTICE SCALIA delivered the opinion of the Court.

We consider whether a contractual waiver of class arbi-
tration is enforceable under the Federal Arbitration Act
when the plaintiff ’s cost of individually arbitrating a
federal statutory claim exceeds the potential recovery.
I
Respondents are merchants who accept American Ex-
press cards. Their agreement with petitioners—American
Express and a wholly owned subsidiary—contains a clause
that requires all disputes between the parties to be re-
solved by arbitration. The agreement also provides that
“[t]here shall be no right or authority for any Claims to be
arbitrated on a class action basis.” In re American Express
Merchants’ Litigation, 667 F. 3d 204, 209 (CA2 2012).
Respondents brought a class action against petitioners
for violations of the federal antitrust laws. According to
respondents, American Express used its monopoly power
in the market for charge cards to force merchants to ac-
cept credit cards at rates approximately 30% higher than
243
RESTAURANT
the fees for competing credit cards.1 This tying arrange-

ment, respondents said, violated §1 of the Sherman Act.
They sought treble damages for the class under §4 of the
Clayton Act.
Petitioners moved to compel individual arbitration
under the Federal Arbitration Act (FAA), 9 U. S. C. §1
et seq. In resisting the motion, respondents submitted a
declaration from an economist who estimated that the cost
of an expert analysis necessary to prove the antitrust
claims would be “at least several hundred thousand dol-
lars, and might exceed $1 million,” while the maximum
recovery for an individual plaintiff would be $12,850, or
$38,549 when trebled. App. 93. The District Court granted
the motion and dismissed the lawsuits. The Court of
Appeals reversed and remanded for further proceedings.
It held that because respondents had established that
“they would incur prohibitive costs if compelled to arbi-
trate under the class action waiver,” the waiver was un-
enforceable and the arbitration could not proceed. In re
American Express Merchants’ Litigation, 554 F. 3d 300,
315–316 (CA2 2009).
We granted certiorari, vacated the judgment, and re-
manded for further consideration in light of Stolt-Nielsen
S. A. v. AnimalFeeds Int’l Corp., 559 U. S. 662 (2010),
which held that a party may not be compelled to submit to
class arbitration absent an agreement to do so. American
Express Co. v. Italian Colors Restaurant, 559 U. S. 1103
(2010). The Court of Appeals stood by its reversal, stating
that its earlier ruling did not compel class arbitration.
In re American Express Merchants’ Litigation, 634 F. 3d
187, 200 (CA2 2011). It then sua sponte reconsidered its
ruling in light of AT&T Mobility LLC v. Concepcion, 563
——————
1Acharge card requires its holder to pay the full outstanding balance
at the end of a billing cycle; a credit card requires payment of only a
portion, with the balance subject to interest.
244
Cite as: 570 U. S. ____ (2013) 3
U. S. ___ (2011), which held that the FAA pre-empted a

state law barring enforcement of a class-arbitration waiver.
Finding AT&T Mobility inapplicable because it addressed
pre-emption, the Court of Appeals reversed for the third
time. 667 F. 3d, at 213. It then denied rehearing en
banc with five judges dissenting. In re American Express
Merchants’ Litigation, 681 F. 3d 139 (CA2 2012). We
granted certiorari, 568 U. S. ___ (2012), to consider the
question “[w]hether the Federal Arbitration Act permits
courts . . . to invalidate arbitration agreements on the
ground that they do not permit class arbitration of a
federal-law claim,” Pet. for Cert. i.
II
Congress enacted the FAA in response to widespread
judicial hostility to arbitration. See AT&T Mobility,
supra, at ___ (slip op., at 4). As relevant here, the Act
provides:
“A written provision in any maritime transaction or
contract evidencing a transaction involving commerce
to settle by arbitration a controversy thereafter aris-
ing out of such contract or transaction . . . shall be valid,
irrevocable, and enforceable, save upon such grounds
as exist at law or in equity for the revocation of any
contract.” 9 U. S. C. §2.
This text reflects the overarching principle that arbitra-
tion is a matter of contract. See Rent-A-Center, West, Inc.
v. Jackson, 561 U. S. ___, ___ (2010) (slip op., at 3). And
consistent with that text, courts must “rigorously enforce”
arbitration agreements according to their terms, Dean
Witter Reynolds Inc. v. Byrd, 470 U. S. 213, 221 (1985),
including terms that “specify with whom [the parties]
choose to arbitrate their disputes,” Stolt-Nielsen, supra, at
683, and “the rules under which that arbitration will be
conducted,” Volt Information Sciences, Inc. v. Board of
245
RESTAURANT
Trustees of Leland Stanford Junior Univ., 489 U. S. 468,

479 (1989). That holds true for claims that allege a viola-
tion of a federal statute, unless the FAA’s mandate has
been “ ‘overridden by a contrary congressional command.’ ”
CompuCredit Corp. v. Greenwood, 565 U. S. ___, ___
(2012) (slip op., at 2–3) (quoting Shearson/American
Express Inc. v. McMahon, 482 U. S. 220, 226 (1987)).
III
No contrary congressional command requires us to
reject the waiver of class arbitration here. Respondents argue
that requiring them to litigate their claims individually—
as they contracted to do—would contravene the policies
of the antitrust laws. But the antitrust laws do not
guarantee an affordable procedural path to the vindi-
cation of every claim. Congress has taken some measures
to facilitate the litigation of antitrust claims—for example,
it enacted a multiplied-damages remedy. See 15 U. S. C.
§15 (treble damages). In enacting such measures, Con-
gress has told us that it is willing to go, in certain re-
spects, beyond the normal limits of law in advancing its
goals of deterring and remedying unlawful trade practice.
But to say that Congress must have intended whatever
departures from those normal limits advance antitrust
goals is simply irrational. “[N]o legislation pursues its
purposes at all costs.” Rodriguez v. United States, 480
U. S. 522, 525–526 (1987) (per curiam).
The antitrust laws do not “evinc[e] an intention to pre-
clude a waiver” of class-action procedure. Mitsubishi
Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U. S.
614, 628 (1985). The Sherman and Clayton Acts make no
mention of class actions. In fact, they were enacted dec-
ades before the advent of Federal Rule of Civil Procedure
23, which was “designed to allow an exception to the usual
rule that litigation is conducted by and on behalf of the
individual named parties only.” Califano v. Yamasaki,
246
Cite as: 570 U. S. ____ (2013) 5
442 U. S. 682, 700–701 (1979). The parties here agreed to

arbitrate pursuant to that “usual rule,” and it would be
remarkable for a court to erase that expectation.
Nor does congressional approval of Rule 23 establish an
entitlement to class proceedings for the vindication of
statutory rights. To begin with, it is likely that such an
entitlement, invalidating private arbitration agreements
denying class adjudication, would be an “abridg[ment]” or
modif[ication]” of a “substantive right” forbidden to the
Rules, see 28 U. S. C. §2072(b). But there is no evidence of
such an entitlement in any event. The Rule imposes
stringent requirements for certification that in practice
exclude most claims. And we have specifically rejected the
assertion that one of those requirements (the class-notice
requirement) must be dispensed with because the “prohib-
itively high cost” of compliance would “frustrate [plain-
tiff ’s] attempt to vindicate the policies underlying the
antitrust” laws. Eisen v. Carlisle & Jacquelin, 417 U. S.
156, 166–168, 175–176 (1974). One might respond, per-
haps, that federal law secures a nonwaivable opportunity
to vindicate federal policies by satisfying the procedural
strictures of Rule 23 or invoking some other informal class
mechanism in arbitration. But we have already rejected
that proposition in AT&T Mobility, 563 U. S., at ___ (slip
op., at 9).
IV
Our finding of no “contrary congressional command”
does not end the case. Respondents invoke a judge-made
exception to the FAA which, they say, serves to harmonize
competing federal policies by allowing courts to invalidate
agreements that prevent the “effective vindication” of a
federal statutory right. Enforcing the waiver of class
arbitration bars effective vindication, respondents con-
tend, because they have no economic incentive to pursue
their antitrust claims individually in arbitration.
247
RESTAURANT
The “effective vindication” exception to which respond-

ents allude originated as dictum in Mitsubishi Motors,
where we expressed a willingness to invalidate, on “public
policy” grounds, arbitration agreements that “operat[e] . . .
as a prospective waiver of a party’s right to pursue statu-
tory remedies.” 473 U. S., at 637, n. 19 (emphasis added).
Dismissing concerns that the arbitral forum was inade-
quate, we said that “so long as the prospective litigant
effectively may vindicate its statutory cause of action in
the arbitral forum, the statute will continue to serve both
its remedial and deterrent function.” Id., at 637. Subse-
quent cases have similarly asserted the existence of an
“effective vindication” exception, see, e.g., 14 Penn Plaza
LLC v. Pyett, 556 U. S. 247, 273–274 (2009); Gilmer v.
Interstate/Johnson Lane Corp., 500 U. S. 20, 28 (1991),
but have similarly declined to apply it to invalidate the
arbitration agreement at issue.2
And we do so again here. As we have described, the
exception finds its origin in the desire to prevent “prospec-
tive waiver of a party’s right to pursue statutory reme-
dies,” Mitsubishi Motors, supra, at 637, n. 19 (emphasis
added). That would certainly cover a provision in an
arbitration agreement forbidding the assertion of certain
statutory rights. And it would perhaps cover filing and
administrative fees attached to arbitration that are so
high as to make access to the forum impracticable. See
——————
2 Contrary to the dissent’s claim, post, at 8–9, and n. 3 (opinion of
KAGAN, J.), the Court in Mitsubishi Motors did not hold that federal
statutory claims are subject to arbitration so long as the claimant may
effectively vindicate his rights in the arbitral forum. The Court ex-
pressly stated that, “at this stage in the proceedings,” it had “no occa-
sion to speculate” on whether the arbitration agreement’s potential
deprivation of a claimant’s right to pursue federal remedies may render
that agreement unenforceable. 473 U. S., at 637, n. 19. Even the Court
of Appeals in this case recognized the relevant language in Mitsubishi
Motors as dicta. In re American Express Merchants’ Litigation, 667
F. 3d 204, 214 (CA2 2012).
248
Cite as: 570 U. S. ____ (2013) 7
Green Tree Financial Corp.-Ala. v. Randolph, 531 U. S. 79,

90 (2000) (“It may well be that the existence of large arbi-
tration costs could preclude a litigant . . . from effectively
vindicating her federal statutory rights”). But the fact
that it is not worth the expense involved in proving a
statutory remedy does not constitute the elimination of
the right to pursue that remedy. See 681 F. 3d, at 147
(Jacobs, C. J., dissenting from denial of rehearing en
banc).3 The class-action waiver merely limits arbitration
to the two contracting parties. It no more eliminates those
parties’ right to pursue their statutory remedy than did
federal law before its adoption of the class action for legal
relief in 1938, see Fed. Rule Civ. Proc. 23, 28 U. S. C.,
p. 864 (1938 ed., Supp V); 7A C. Wright, A. Miller, & M.
Kane, Federal Practice and Procedure §1752, p. 18 (3d ed.
2005). Or, to put it differently, the individual suit that
was considered adequate to assure “effective vindication”
of a federal right before adoption of class-action proce-
dures did not suddenly become “ineffective vindication”
upon their adoption.4
——————
3 The dissent contends that a class-action waiver may deny a party’s
right to pursue statutory remedies in the same way as a clause that

bars a party from presenting economic testimony. See post, at 3, 9.
That is a false comparison for several reasons: To begin with, it is not a
given that such a clause would constitute an impermissible waiver; we
have never considered the point. But more importantly, such a clause,
assuming it makes vindication of the claim impossible, makes it impos-
sible not just as a class action but even as an individual claim.
4 Who can disagree with the dissent’s assertion that “the effective-
vindication rule asks about the world today, not the world as it might
have looked when Congress passed a given statute”? Post, at 12. But
time does not change the meaning of effectiveness, making ineffective
vindication today what was effective vindication in the past. The
dissent also says that the agreement bars other forms of cost sharing—
existing before the Sherman Act—that could provide effective vindica-
tion. See post, at 11–12, and n. 5. Petitioners denied that, and that is
not what the Court of Appeals decision under review here held. It held
that, because other forms of cost sharing were not economically feasible
249
RESTAURANT
A pair of our cases brings home the point. In Gilmer,

supra, we had no qualms in enforcing a class waiver in an
arbitration agreement even though the federal statute at
issue, the Age Discrimination in Employment Act, ex-
pressly permitted collective actions. We said that statutory
permission did “ ‘not mean that individual attempts at
conciliation were intended to be barred.’ ” Id., at 32. And
in Vimar Seguros y Reaseguros, S. A. v. M/V Sky Reefer,
515 U. S. 528 (1995), we held that requiring arbitration in
a foreign country was compatible with the federal Car-
riage of Goods by Sea Act. That legislation prohibited any
agreement “ ‘relieving’ ” or “ ‘lessening’ ” the liability of a
carrier for damaged goods, id., at 530, 534 (quoting 46
U. S. C. App. §1303(8) (1988 ed.))—which is close to codifi-
cation of an “effective vindication” exception. The Court
rejected the argument that the “inconvenience and costs of
proceeding” abroad “lessen[ed]” the defendants’ liability,
stating that “[i]t would be unwieldy and unsupported by
the terms or policy of the statute to require courts to pro-
ceed case by case to tally the costs and burdens to particu-
lar plaintiffs in light of their means, the size of their
claims, and the relative burden on the carrier.” 515 U. S.,
at 532, 536. Such a “tally[ing] [of] the costs and burdens”
is precisely what the dissent would impose upon federal
courts here.
Truth to tell, our decision in AT&T Mobility all but
resolves this case. There we invalidated a law condition-
ing enforcement of arbitration on the availability of class
procedure because that law “interfere[d] with fundamental
——————
(“the only economically feasible means for . . . enforcing [respondents’]
statutory rights is via a class action”), the class-action waiver was
unenforceable. 667 F. 3d, at 218 (emphasis added). (The dissent’s
assertion to the contrary cites not the opinion on appeal here, but an
earlier opinion that was vacated. See In re American Express Mer-

chants’ Litigation, 554 F. 3d 300 (CA2 2009), vacated and remanded,
559 U. S. 1103 (2010).) That is the conclusion we reject.
250
Cite as: 570 U. S. ____ (2013) 9
attributes of arbitration.” 563 U. S., at ___ (slip op., at 9).

“[T]he switch from bilateral to class arbitration,” we said,
“sacrifices the principal advantage of arbitration—its
informality—and makes the process slower, more costly,
and more likely to generate procedural morass than final
judgment.” Id., at ___ (slip op., at 14). We specifically
rejected the argument that class arbitration was necessary
to prosecute claims “that might otherwise slip through the
legal system.” Id., at ___ (slip op., at 17).5
* * *
The regime established by the Court of Appeals’ decision
would require—before a plaintiff can be held to contractu-
ally agreed bilateral arbitration—that a federal court
determine (and the parties litigate) the legal requirements
for success on the merits claim-by-claim and theory-by-
theory, the evidence necessary to meet those requirements,
the cost of developing that evidence, and the damages
that would be recovered in the event of success. Such a
preliminary litigating hurdle would undoubtedly destroy
the prospect of speedy resolution that arbitration in gen-
eral and bilateral arbitration in particular was meant to
secure. The FAA does not sanction such a judicially created
superstructure.
The judgment of the Court of Appeals is reversed.
——————
5 In dismissing AT&T Mobility as a case involving pre-emption and
not the effective-vindication exception, the dissent ignores what that

case established—that the FAA’s command to enforce arbitration
agreements trumps any interest in ensuring the prosecution of low-
value claims. The latter interest, we said, is “unrelated” to the FAA.
563 U. S., at ___ (slip op., at 17). Accordingly, the FAA does, contrary
to the dissent’s assertion, see post, at 5, favor the absence of litigation
when that is the consequence of a class-action waiver, since its “ ‘princi-
pal purpose’ ” is the enforcement of arbitration agreements according to
their terms. 563 U. S., at ___ (slip op., at 9–10) (quoting Volt Infor-
mation Sciences, Inc. v. Board of Trustees of Leland Stanford Junior
Univ., 489 U. S. 468, 487 (1989)).
251
RESTAURANT
It is so ordered.
JUSTICE SOTOMAYOR took no part in the consideration

or decision of this case.
252
Cite as: 570 U. S. ____ (2013) 1
THOMAS, J., concurring

_________________
No. 12–133
_________________

[June 20, 2013]
JUSTICE THOMAS, concurring.

I join the Court’s opinion in full. I write separately to
note that the result here is also required by the plain
meaning of the Federal Arbitration Act. In AT&T Mobil-
ity LLC v. Concepcion, 563 U. S. ___ (2011), I explained
that “the FAA requires that an agreement to arbitrate be
enforced unless a party successfully challenges the forma-
tion of the arbitration agreement, such as by proving fraud
or duress.” Id., at ___ (concurring opinion) (slip op.,
at 1–2). In this case, Italian Colors makes two arguments
to support its conclusion that the arbitration agreement
should not be enforced. First, it contends that enforcing
the arbitration agreement “would contravene the policies
of the antitrust laws.” Ante, at 4. Second, it contends that
a court may “invalidate agreements that prevent the ‘ef-
fective vindication’ of a federal statutory right.” Ante, at 6.
Neither argument “concern[s] whether the contract was
properly made,” Concepcion, supra, at ___ (THOMAS, J.,
concurring) (slip op., at 5–6). Because Italian Colors
has not furnished “grounds . . . for the revocation of any
contract,” 9 U. S. C. §2, the arbitration agreement must
be enforced. Italian Colors voluntarily entered into a con-
tract containing a bilateral arbitration provision. It can-
not now escape its obligations merely because the claim it
wishes to bring might be economically infeasible.
253
Cite as: 570 U. S. ____ (2013) 1
KAGAN, J., dissenting

_________________
No. 12–133
_________________

[June 20, 2013]
JUSTICE KAGAN, with whom JUSTICE GINSBURG and

JUSTICE BREYER join, dissenting.
Here is the nutshell version of this case, unfortunately
obscured in the Court’s decision. The owner of a small
restaurant (Italian Colors) thinks that American Express
(Amex) has used its monopoly power to force merchants to
accept a form contract violating the antitrust laws. The
restaurateur wants to challenge the allegedly unlawful
provision (imposing a tying arrangement), but the same
contract’s arbitration clause prevents him from doing so.
That term imposes a variety of procedural bars that would
make pursuit of the antitrust claim a fool’s errand. So if
the arbitration clause is enforceable, Amex has insulated
itself from antitrust liability—even if it has in fact violated
the law. The monopolist gets to use its monopoly power to
insist on a contract effectively depriving its victims of all
legal recourse.
And here is the nutshell version of today’s opinion,
admirably flaunted rather than camouflaged: Too darn
bad.
That answer is a betrayal of our precedents, and of
federal statutes like the antitrust laws. Our decisions
have developed a mechanism—called the effective-
vindication rule—to prevent arbitration clauses from
choking off a plaintiff ’s ability to enforce congressionally
254
RESTAURANT
created rights. That doctrine bars applying such a clause

when (but only when) it operates to confer immunity from
potentially meritorious federal claims. In so doing, the
rule reconciles the Federal Arbitration Act (FAA) with all
the rest of federal law—and indeed, promotes the most
fundamental purposes of the FAA itself. As applied here,
the rule would ensure that Amex’s arbitration clause does
not foreclose Italian Colors from vindicating its right to
redress antitrust harm.
The majority barely tries to explain why it reaches a
contrary result. It notes that we have not decided this
exact case before—neglecting that the principle we have
established fits this case hand in glove. And it concocts a
special exemption for class-arbitration waivers—ignoring
that this case concerns much more than that. Through-
out, the majority disregards our decisions’ central tenet:
An arbitration clause may not thwart federal law, ir-
respective of exactly how it does so. Because the Court
today prevents the effective vindication of federal statutory
rights, I respectfully dissent.
I
Start with an uncontroversial proposition: We would
refuse to enforce an exculpatory clause insulating a com-
pany from antitrust liability—say, “Merchants may bring
no Sherman Act claims”—even if that clause were con-
tained in an arbitration agreement. See ante, at 6. Con-
gress created the Sherman Act’s private cause of action
not solely to compensate individuals, but to promote “the
public interest in vigilant enforcement of the antitrust
laws.” Lawlor v. National Screen Service Corp., 349 U. S.
322, 329 (1955). Accordingly, courts will not enforce a
prospective waiver of the right to gain redress for an
antitrust injury, whether in an arbitration agreement or
any other contract. See Mitsubishi Motors Corp. v. Soler
Chrysler-Plymouth, Inc., 473 U. S. 614, 637, and n. 19
255
Cite as: 570 U. S. ____ (2013) 3
(1985). The same rule applies to other important federal

statutory rights. See 14 Penn Plaza LLC v. Pyett, 556
U. S. 247, 273 (2009) (Age Discrimination in Employment
Act); Brooklyn Savings Bank v. O’Neil, 324 U. S. 697, 704
(1945) (Fair Labor Standards Act). But its necessity is
nowhere more evident than in the antitrust context.
Without the rule, a company could use its monopoly power
to protect its monopoly power, by coercing agreement to
contractual terms eliminating its antitrust liability.
If the rule were limited to baldly exculpatory provi-
sions, however, a monopolist could devise numerous ways
around it. Consider several alternatives that a party
drafting an arbitration agreement could adopt to avoid
antitrust liability, each of which would have the identical
effect. On the front end: The agreement might set out-
landish filing fees or establish an absurd (e.g., one-day)
statute of limitations, thus preventing a claimant from
gaining access to the arbitral forum. On the back end: The
agreement might remove the arbitrator’s authority to
grant meaningful relief, so that a judgment gets the
claimant nothing worthwhile. And in the middle: The
agreement might block the claimant from presenting the
kind of proof that is necessary to establish the defendant’s
liability—say, by prohibiting any economic testimony
(good luck proving an antitrust claim without that!). Or
else the agreement might appoint as an arbitrator an
obviously biased person—say, the CEO of Amex. The
possibilities are endless—all less direct than an express
exculpatory clause, but no less fatal. So the rule against
prospective waivers of federal rights can work only if it
applies not just to a contract clause explicitly barring a
claim, but to others that operate to do so.
And sure enough, our cases establish this proposition:
An arbitration clause will not be enforced if it prevents the
effective vindication of federal statutory rights, however it
achieves that result. The rule originated in Mitsubishi,
256
RESTAURANT
where we held that claims brought under the Sherman Act

and other federal laws are generally subject to arbitration.
473 U. S., at 628. By agreeing to arbitrate such a claim,
we explained, “a party does not forgo the substantive
rights afforded by the statute; it only submits to their
resolution in an arbitral, rather than a judicial, forum.”
Ibid. But crucial to our decision was a limiting principle,
designed to safeguard federal rights: An arbitration clause
will be enforced only “so long as the prospective litigant
effectively may vindicate its statutory cause of action in
the arbitral forum.” Id., at 637. If an arbitration provi-
sion “operated . . . as a prospective waiver of a party’s
right to pursue statutory remedies,” we emphasized, we
would “condemn[ ]” it. Id., at 637, n. 19. Similarly, we
stated that such a clause should be “set[] aside” if “pro-
ceedings in the contractual forum will be so gravely diffi-
cult” that the claimant “will for all practical purposes be
deprived of his day in court.” Id., at 632 (internal quota-
tion marks omitted). And in the decades since Mitsubishi,
we have repeated its admonition time and again, instruct-
ing courts not to enforce an arbitration agreement that
effectively (even if not explicitly) forecloses a plaintiff from
remedying the violation of a federal statutory right. See
Gilmer v. Interstate/Johnson Lane Corp., 500 U. S. 20, 28
(1991); Vimar Seguros y Reaseguros, S. A. v. M/V Sky
Reefer, 515 U. S. 528, 540 (1995); 14 Penn Plaza, 556 U. S.,
at 266, 273–274.
Our decision in Green Tree Financial Corp.-Ala. v. Ran-
dolph, 531 U. S. 79 (2000), confirmed that this principle
applies when an agreement thwarts federal law by making
arbitration prohibitively expensive. The plaintiff there
(seeking relief under the Truth in Lending Act) argued
that an arbitration agreement was unenforceable be-
cause it “create[d] a risk” that she would have to “bear
prohibitive arbitration costs” in the form of high filing and
administrative fees. Id., at 90 (internal quotation marks
257
Cite as: 570 U. S. ____ (2013) 5
omitted). We rejected that contention, but not because we

doubted that such fees could prevent the effective vindica-
tion of statutory rights. To the contrary, we invoked our
rule from Mitsubishi, making clear that it applied to the
case before us. See 538 U. S., at 90. Indeed, we added a
burden of proof: “[W]here, as here,” we held, a party as-
serting a federal right “seeks to invalidate an arbitration
agreement on the ground that arbitration would be prohib-
itively expensive, that party bears the burden of showing
the likelihood of incurring such costs.” Id., at 92. Ran-
dolph, we found, had failed to meet that burden: The
evidence she offered was “too speculative.” Id., at 91. But
even as we dismissed Randolph’s suit, we reminded courts
to protect against arbitration agreements that make fed-
eral claims too costly to bring.
Applied as our precedents direct, the effective-
vindication rule furthers the purposes not just of laws like
the Sherman Act, but of the FAA itself. That statute
reflects a federal policy favoring actual arbitration—that
is, arbitration as a streamlined “method of resolving dis-
putes,” not as a foolproof way of killing off valid claims.
Rodriguez de Quijas v. Shearson/American Express, Inc.,
490 U. S. 477, 481 (1989). Put otherwise: What the FAA
prefers to litigation is arbitration, not de facto immunity.
The effective-vindication rule furthers the statute’s goals
by ensuring that arbitration remains a real, not faux,
method of dispute resolution. With the rule, companies
have good reason to adopt arbitral procedures that facili-
tate efficient and accurate handling of complaints. With-
out it, companies have every incentive to draft their
agreements to extract backdoor waivers of statutory
rights, making arbitration unavailable or pointless. So
down one road: More arbitration, better enforcement of
federal statutes. And down the other: Less arbitration,
poorer enforcement of federal statutes. Which would you
prefer? Or still more aptly: Which do you think Congress
258
RESTAURANT
would?
The answer becomes all the more obvious given the
limits we have placed on the rule, which ensure that it
does not diminish arbitration’s benefits. The rule comes
into play only when an agreement “operate[s] . . . as a
prospective waiver”—that is, forecloses (not diminishes) a
plaintiff ’s opportunity to gain relief for a statutory viola-
tion. Mitsubishi, 473 U. S., at 637, n. 19. So, for example,
Randolph assessed whether fees in arbitration would be
“prohibitive” (not high, excessive, or extravagant). 531
U. S., at 90. Moreover, the plaintiff must make that show-
ing through concrete proof: “[S]peculative” risks, “un-
founded assumptions,” and “unsupported statements” will
not suffice. Id., at 90–91, and n. 6. With the inquiry that
confined and the evidentiary requirements that high,
courts have had no trouble assessing the matters the rule
makes relevant. And for almost three decades, courts
have followed our edict that arbitration clauses must
usually prevail, declining to enforce them in only rare
cases. See Brief for United States as Amicus Curiae 26–
27. The effective-vindication rule has thus operated year
in and year out without undermining, much less “de-
stroy[ing],” the prospect of speedy dispute resolution that
arbitration secures. Ante, at 9.
And this is just the kind of case the rule was meant to
address. Italian Colors, as I have noted, alleges that
Amex used its market power to impose a tying arrange-
ment in violation of the Sherman Act. The antitrust laws,
all parties agree, provide the restaurant with a cause of
action and give it the chance to recover treble damages.
Here, that would mean Italian Colors could take home up
to $38,549. But a problem looms. As this case comes to
us, the evidence shows that Italian Colors cannot prevail
in arbitration without an economic analysis defining the
relevant markets, establishing Amex’s monopoly power,
showing anticompetitive effects, and measuring damages.
259
Cite as: 570 U. S. ____ (2013) 7
And that expert report would cost between several hun-

dred thousand and one million dollars.1 So the expense
involved in proving the claim in arbitration is ten times
what Italian Colors could hope to gain, even in a best-case
scenario. That counts as a “prohibitive” cost, in Ran-
dolph’s terminology, if anything does. No rational actor
would bring a claim worth tens of thousands of dollars
if doing so meant incurring costs in the hundreds of
thousands.
An arbitration agreement could manage such a mis-
match in many ways, but Amex’s disdains them all. As
the Court makes clear, the contract expressly prohibits
class arbitration. But that is only part of the problem.2
The agreement also disallows any kind of joinder or con-
solidation of claims or parties. And more: Its confidential-
ity provision prevents Italian Colors from informally
arranging with other merchants to produce a common
expert report. And still more: The agreement precludes
any shifting of costs to Amex, even if Italian Colors pre-
vails. And beyond all that: Amex refused to enter into any
stipulations that would obviate or mitigate the need for
——————
1 The evidence relating to these costs comes from an affidavit submit-
ted by an economist experienced in proving similar antitrust claims.
The Second Circuit found that Amex “ha[d] brought no serious chal-
lenge” to that factual showing. See, e.g., 667 F. 3d 204, 210 (2012).
And in this Court, Amex conceded that Italian Colors would need an
expert economic report to prevail in arbitration. See Tr. of Oral Arg.
15. Perhaps that is not really true. A hallmark of arbitration is its use
of procedures tailored to the type of dispute and amount in controversy;
so arbitrators might properly decline to demand such a rigorous eviden-
tiary showing in small antitrust cases. But that possibility cannot
disturb the factual premise on which this case comes to us, and which
the majority accepts: that Italian Colors’s tying claim is an ordinary
kind of antitrust claim; and that it is worth about a tenth the cost of
arbitration.
2 The majority contends that the class-action waiver is the only part
we should consider. See ante, at 7–8, n. 4. I explain below why that

assertion is wrong. See infra, at 11–12.
260
RESTAURANT
the economic analysis. In short, the agreement as applied

in this case cuts off not just class arbitration, but any
avenue for sharing, shifting, or shrinking necessary costs.
Amex has put Italian Colors to this choice: Spend way,
way, way more money than your claim is worth, or relin-
quish your Sherman Act rights.
So contra the majority, the court below got this case
right. Italian Colors proved what the plaintiff in Ran-
dolph could not—that a standard-form agreement, taken
as a whole, renders arbitration of a claim “prohibitively
expensive.” 531 U. S., at 92. The restaurant thus estab-
lished that the contract “operate[s] . . . as a prospective
waiver,” and prevents the “effective[ ] . . . vindicat[ion]” of
Sherman Act rights. Mitsubishi, 473 U. S., at 637, and
n. 19. I would follow our precedents and decline to compel
arbitration.
II
The majority is quite sure that the effective-vindication
rule does not apply here, but has precious little to say
about why. It starts by disparaging the rule as having
“originated as dictum.” Ante, at 6. But it does not rest on
that swipe, and for good reason. As I have explained, see
supra, at 3–4, the rule began as a core part of Mitsubishi:
We held there that federal statutory claims are subject to
arbitration “so long as” the claimant “effectively may
vindicate its [rights] in the arbitral forum.” 473 U. S., at
637 (emphasis added). The rule thus served as an essen-
tial condition of the decision’s holding.3 And in Randolph,
——————
3 Themajority is dead wrong when it says that Mitsubishi reserved
judgment on “whether the arbitration agreement’s potential depriva-
tion of a claimant’s right to pursue federal remedies may render that
agreement unenforceable.” Ante, at 6, n. 2. What the Mitsubishi Court
had “no occasion to speculate on” was whether a particular agreement
in fact eliminated the claimant’s federal rights. 473 U. S., at 673, n. 19.
But we stated expressly that if the agreement did so (as Amex’s does),
261
Cite as: 570 U. S. ____ (2013) 9
we provided a standard for applying the rule when a

claimant alleges “prohibitive costs” (“Where, as here,” etc.,
see supra, at 5), and we then applied that standard to the
parties before us. So whatever else the majority might
think of the effective-vindication rule, it is not dictum.
The next paragraph of the Court’s decision (the third of
Part IV) is the key: It contains almost the whole of the
majority’s effort to explain why the effective-vindication
rule does not stop Amex from compelling arbitration. The
majority’s first move is to describe Mitsubishi and Ran-
dolph as covering only discrete situations: The rule, the
majority asserts, applies to arbitration agreements that
eliminate the “right to pursue statutory remedies” by
“forbidding the assertion” of the right (as addressed in
Mitsubishi) or imposing filing and administrative fees “so
high as to make access to the forum impracticable” (as
addressed in Randolph). Ante, at 6 (emphasis deleted;
internal quotation marks omitted). Those cases are not
this case, the majority says: Here, the agreement’s provi-
sions went to the possibility of “proving a statutory rem-
edy.” Ante, at 7.
But the distinction the majority proffers, which excludes
problems of proof, is one Mitsubishi and Randolph (and
our decisions reaffirming them) foreclose. Those decisions
establish what in some quarters is known as a principle:
When an arbitration agreement prevents the effective
vindication of federal rights, a party may go to court.
That principle, by its nature, operates in diverse circum-
stances—not just the ones that happened to come before the
Court. See supra, at 3–4. It doubtless covers the baldly
exculpatory clause and prohibitive fees that the majority
acknowledges would preclude an arbitration agreement’s
enforcement. But so too it covers the world of other provi-
sions a clever drafter might devise to scuttle even the most
——————
we would invalidate it. Ibid.; see supra, at 4.
262
RESTAURANT
meritorious federal claims. Those provisions might deny

entry to the forum in the first instance. Or they might
deprive the claimant of any remedy. Or they might pre-
vent the claimant from offering the necessary proof to
prevail, as in my “no economic testimony” hypothetical—
and in the actual circumstances of this case. See supra, at
3. The variations matter not at all. Whatever the precise
mechanism, each “operate[s] . . . as a prospective waiver of
a party’s [federal] right[s]”—and so confers immunity on a
wrongdoer. Mitsubishi, 473 U. S., at 637, n. 19. And that
is what counts under our decisions.4
Nor can the majority escape the principle we have estab-
lished by observing, as it does at one point, that Amex’s
agreement merely made arbitration “not worth the ex-
pense.” Ante, at 7. That suggestion, after all, runs smack
into Randolph, which likewise involved an allegation that
arbitration, as specified in a contract, “would be prohibi-
tively expensive.” 531 U. S., at 92. Our decision there
made clear that a provision raising a plaintiff ’s costs could
foreclose consideration of federal claims, and so run afoul
of the effective-vindication rule. The expense at issue in
Randolph came from a filing fee combined with a per-diem
payment for the arbitrator. But nothing about those
particular costs is distinctive; and indeed, a rule confined
to them would be weirdly idiosyncratic. Not surprisingly,
then, Randolph gave no hint of distinguishing among the
different ways an arbitration agreement can make a claim
——————
4 Gilmer and Vimar Seguros, which the majority relies on, see ante, at
8, fail to advance its argument. The plaintiffs there did not claim, as
Italian Colors does, that an arbitration clause altogether precluded
them from vindicating their federal rights. They averred only that
arbitration would be less convenient or effective than a proceeding in
court. See Gilmer v. Interstate/Johnson Lane Corp., 500 U. S. 20, 31–
32 (1991); Vimar Seguros y Reaseguros, S. A. v. M/V Sky Reefer, 515
U. S. 528, 533 (1995). As I have explained, that kind of showing does
not meet the effective-vindication rule’s high bar. See supra, at 6.
263
Cite as: 570 U. S. ____ (2013) 11
too costly to bring. Its rationale applies whenever an

agreement makes the vindication of federal claims impos-
sibly expensive—whether by imposing fees or proscribing
cost-sharing or adopting some other device.
That leaves the three last sentences in the majority’s
core paragraph. Here, the majority conjures a special
reason to exclude “class-action waiver[s]” from the effective-
vindication rule’s compass. Ante, at 7–8, and n. 4.
Rule 23, the majority notes, became law only in 1938—
decades after the Sherman Act. The majority’s conclusion:
If federal law in the interim decades did not eliminate a
plaintiff ’s rights under that Act, then neither does this
agreement.
But that notion, first of all, rests on a false premise: that
this case is only about a class-action waiver. See ante, at
7, n. 4 (confining the case to that issue). It is not, and
indeed could not sensibly be. The effective-vindication
rule asks whether an arbitration agreement as a whole
precludes a claimant from enforcing federal statutory
rights. No single provision is properly viewed in isolation,
because an agreement can close off one avenue to pursue a
claim while leaving others open. In this case, for example,
the agreement could have prohibited class arbitration
without offending the effective-vindication rule if it had
provided an alternative mechanism to share, shift, or
reduce the necessary costs. The agreement’s problem is
that it bars not just class actions, but also all mecha-
nisms—many existing long before the Sherman Act, if that
matters—for joinder or consolidation of claims, informal
coordination among individual claimants, or amelioration
of arbitral expenses. See supra, at 7. And contrary to the
majority’s assertion, the Second Circuit well understood
that point: It considered, for example, whether Italian
Colors could shift expert expenses to Amex if its claim
prevailed (no) or could join with merchants bringing simi-
lar claims to produce a common expert report (no again).
264
RESTAURANT
See 554 F. 3d 300, 318 (2009). It is only in this Court that

the case has become strangely narrow, as the majority
stares at a single provision rather than considering, in the
way the effective-vindication rule demands, how the entire
contract operates.5
In any event, the age of the relevant procedural mecha-
nisms (whether class actions or any other) does not mat-
ter, because the effective-vindication rule asks about the
world today, not the world as it might have looked when
Congress passed a given statute. Whether a particular
procedural device preceded or post-dated a particular
statute, the question remains the same: Does the arbi-
tration agreement foreclose a party—right now—from
effectively vindicating the substantive rights the statute
provides? This case exhibits a whole raft of changes since
Congress passed the Sherman Act, affecting both parties
to the dispute—not just new procedural rules (like Rule
23), but also new evidentiary requirements (like the
demand here for an expert report) and new contract provi-
sions affecting arbitration (like this agreement’s confiden-
tiality clause). But what has stayed the same is this:
Congress’s intent that antitrust plaintiffs should be able to
enforce their rights free of any prior waiver. See supra, at
2–3; Mitsubishi, 473 U. S., at 637, n. 19. The effective-
vindication rule carries out that purpose by ensuring that
——————
5 In defense of this focus, the majority quotes the Second Circuit as
concluding that “the only economically feasible means” for Italian

Colors to enforce its statutory rights “is via a class action.” Ante, at 7–
8, n. 4 (quoting 667 F. 3d, at 218; internal quotation marks omitted;
emphasis added by the Court). But the Court of Appeals reached that
conclusion only after finding that the agreement prohibited all other
forms of cost-sharing and cost-shifting. See 554 F. 3d 300, 318 (2009).
(That opinion was vacated on other grounds, but its analysis continued
to inform—indeed, was essential to—the Second Circuit’s final decision
in the case. See 667 F. 3d, at 218.) The Second Circuit therefore did
exactly what the majority refuses to do—look to the agreement as a
whole to determine whether it permits the vindication of federal rights.
265
Cite as: 570 U. S. ____ (2013) 13
any arbitration agreement operating as such a waiver is

unenforceable. And that requires courts to determine in
the here and now—rather than in ye olde glory days—
whether an agreement’s provisions foreclose even merito-
rious antitrust claims.
Still, the majority takes one last stab: “Truth to tell,” it
claims, AT&T Mobility LLC v. Concepcion, 563 U. S. ___
(2011), “all but resolves this case.” Ante, at 8. In that
decision, the majority recounts, this Court held that the
FAA preempted a state “law conditioning enforcement of
arbitration on the availability of class procedure.” Ibid.;
see 563 U. S., at ___ (slip op., at 9). According to the ma-
jority, that decision controls here because “[w]e specifically
rejected the argument that class arbitration was neces-
sary.” Ante, at 9.
Where to begin? Well, maybe where I just left off:
Italian Colors is not claiming that a class action is
necessary—only that it have some means of vindicating a
meritorious claim. And as I have shown, non-class options
abound. See supra, at 11. The idea that AT&T Mobility
controls here depends entirely on the majority’s view that
this case is “class action or bust.” Were the majority to
drop that pretense, it could make no claim for AT&T
Mobility’s relevance.
And just as this case is not about class actions, AT&T
Mobility was not—and could not have been—about the
effective-vindication rule. Here is a tip-off: AT&T Mobility
nowhere cited our effective-vindication precedents. That
was so for two reasons. To begin with, the state law in
question made class-action waivers unenforceable even
when a party could feasibly vindicate her claim in an
individual arbitration. The state rule was designed to
preserve the broad-scale “deterrent effects of class ac-
tions,” not merely to protect a particular plaintiff ’s right
to assert her own claim. 563 U. S., at ___ (slip op., at 3).
Indeed, the Court emphasized that the complaint in that
266
RESTAURANT
case was “most unlikely to go unresolved” because AT&T’s

agreement contained a host of features ensuring that
“aggrieved customers who filed claims would be essentially
guaranteed to be made whole.” Id., at ___ (slip op., at
17–18) (internal quotation marks and brackets omitted).
So the Court professed that AT&T Mobility did not impli-
cate the only thing (a party’s ability to vindicate a merito-
rious claim) this case involves.
And if that is not enough, AT&T Mobility involved a
state law, and therefore could not possibly implicate the
effective-vindication rule. When a state rule allegedly
conflicts with the FAA, we apply standard preemption
principles, asking whether the state law frustrates the
FAA’s purposes and objectives. If the state rule does so—
as the Court found in AT&T Mobility—the Supremacy
Clause requires its invalidation. We have no earthly
interest (quite the contrary) in vindicating that law. Our
effective-vindication rule comes into play only when the
FAA is alleged to conflict with another federal law, like
the Sherman Act here. In that all-federal context, one law
does not automatically bow to the other, and the effective-
vindication rule serves as a way to reconcile any tension
between them. Again, then, AT&T Mobility had no occa-
sion to address the issue in this case. The relevant deci-
sions are instead Mitsubishi and Randolph.
* * *
The Court today mistakes what this case is about. To a
hammer, everything looks like a nail. And to a Court bent
on diminishing the usefulness of Rule 23, everything looks
like a class action, ready to be dismantled. So the Court
does not consider that Amex’s agreement bars not just
class actions, but “other forms of cost-sharing . . . that
could provide effective vindication.” Ante, at 7, n. 4. In
short, the Court does not consider—and does not decide—
Italian Colors’s (and similarly situated litigants’) actual
267
Cite as: 570 U. S. ____ (2013) 15
argument about why the effective-vindication rule pre-

cludes this agreement’s enforcement.
As a result, Amex’s contract will succeed in depriving
Italian Colors of any effective opportunity to challenge
monopolistic conduct allegedly in violation of the Sherman
Act. The FAA, the majority says, so requires. Do not be
fooled. Only the Court so requires; the FAA was never
meant to produce this outcome. The FAA conceived of
arbitration as a “method of resolving disputes”—a way of
using tailored and streamlined procedures to facilitate
redress of injuries. Rodriguez de Quijas, 490 U. S., at 481
(emphasis added). In the hands of today’s majority, arbi-
tration threatens to become more nearly the opposite—a
mechanism easily made to block the vindication of merito-
rious federal claims and insulate wrongdoers from liabil-
ity. The Court thus undermines the FAA no less than it
does the Sherman Act and other federal statutes providing
rights of action. I respectfully dissent.
268
269
ICSID CASE NO. ARB/07/5
INTERNATIONAL CENTRE FOR SETTLEMENT

OF INVESTMENT DISPUTES
WASHINGTON, D.C.
ABACLAT AND OTHERS

(Case formerly known as GIOVANNA A BECCARA AND OTHERS*)
(CLAIMANTS)
and
THE ARGENTINE REPUBLIC

(RESPONDENT)
__________________________________
DECISION ON JURISDICTION AND ADMISSIBILITY

__________________________________
ARBITRAL TRIBUNAL
Professor Pierre Tercier, President
Professor Georges Abi-Saab, Arbitrator
Professor Albert Jan van den Berg, Arbitrator
Secretary to the Tribunal:

Mr. Gonzalo Flores
Date of dispatch to the Parties: 4 August 2011
270
Representing Giovanna a Beccara and Representing The Argentine Republic

others Dra. Angélina María Esther Abbona
Ms. Carolyn B. Lamm Procuradora del Tesoro de la Nación Argentina
Mr. Jonathan C. Hamilton Procuración del Tesoro de la Nación Argentina
Ms. Abby Cohen Smutny Posadas 1641
Ms. Andrea J. Menaker Buenos Aires (C.P. 1112)
Mr. Francis A. Vasquez, Jr. Argentina
WHITE & CASE LLP
701 Thirteen Street, N.W. and
Washington, D.C. 20005
U.S.A. Mr. Jonathan I. Blackman
Mr. Matthew D. Slater
and Mr. Carmine D. Boccuzzi
Ms. Inna Rozenberg
Avv. Vittorio Grimaldi Mr. Ezequiel Sánchez Herrera
Avv. Paolo Marzano CLEARY GOTTLIEB STEEN & HAMILTON LLP
GRIMALDI E ASSOCIATI One Liberty Plaza
Via Pinciana, 25 New York, NY 10006
00198 Rome U.S.A.
Italy
and
Dr. José Martínez de Hoz, Jr.

Dra. Valeria Macchia
PEREZ ALATI, GRONDONA, BENITZ, ARNTSEN
& MARTINES DE HOZ (JR.)
Suipacha 1111 – Piso 18
C1008AAW Buenos Aires
Argentina
* For the change of name, see § 641 below.
271
Table of Contents
I. PARTIES ........................................................................................................................................ 10
A. CLAIMANTS .......................................................................................................................... 10
B. RESPONDENT ........................................................................................................................ 11
II. FACTS ............................................................................................................................................ 12
A. INTRODUCTION ..................................................................................................................... 12
(1) General Concepts relating to Financial Market and Bonds ...................................... 12
(2) General Overview on Sovereign Debt Restructuring ............................................... 17
(3) Argentina‘s Restructuring of Its Economy and Its Debt in relation to Bonds .......... 22
(a) Argentina‘s Restructuring of Its Economy in the 1990s ................................ 22
(b) Argentina‘s Financial Crisis and Default of 2001 ......................................... 26
(c) The Events following Argentina‘s Default of 2001....................................... 28
(d) Argentina‘s Restructuring of Its Debt in relation to Bonds and Relevant
Creditors‘ Reactions ...................................................................................... 28
(4) Evolution of the Dispute following Argentina‘s Exchange Offer 2005 .................... 39
(5) New Exchange Offer 2010 ....................................................................................... 50
B. PROCEDURAL HISTORY......................................................................................................... 51
(1) Request for Arbitration and its Registration by ICSID ............................................. 51
(2) Constitution of the Arbitral Tribunal ........................................................................ 53
(3) Arbitral Procedure .................................................................................................... 55
III. LAW................................................................................................................................................ 77
A. INTRODUCTORY REMARKS ................................................................................................... 77

(1) The Arbitral Procedure ............................................................................................. 77
(2) Object of the Present Decision .................................................................................. 78
(3) Summary of the Parties‘ Positions and Relief Sought .............................................. 79
(a) Respondent‘s Position and Requests for Relief ............................................. 80
(b) Claimants‘ Position and Requests for Relief ................................................. 84
(4) Structure of the Present Decision .............................................................................. 87
B. LEGAL BASIS FOR THE TRIBUNAL‘S JURISDICTION ............................................................... 90

(1) Article 25 ICSID Convention ................................................................................... 91
(2) Argentina-Italy BIT .................................................................................................. 93
2
107
272
(a) General Scope and Aim of the Argentina-Italy BIT ...................................... 94

(b) Article 8 BIT ................................................................................................. 96
(3) Relationship between Article 25 ICSID Convention and Article 8 BIT ................. 102
(a) In General .................................................................................................... 102
(b) With regard to the Subject Matter of the Dispute ........................................ 102
(c) With regard to the Parties ............................................................................ 104
(d) With regard to the Procedure to Be Followed ............................................. 106
(4) Other Relevant Legal Provisions and Principles ..................................................... 107
(5) ICSID, BIT and Mass Claims ................................................................................. 107
C. THE ARBITRAL TRIBUNAL‘S JURISDICTION ........................................................................ 109

(1) Introductory Remarks ............................................................................................. 109
(2) Legal Dispute Arising out of the BIT – Issues 7 & 6.............................................. 109
(a) Issues at Stake and Relevant Legal Provisions ............................................ 109
(b) Parties‘ Positions ......................................................................................... 112
(c) Tribunal‘s Findings ..................................................................................... 115
(i) Alleged Breaches of the BIT .........................................................................115
(ii) Contract Claims v. Treaty Claims ................................................................118
(iii) Potential Contract Claims against the Italian Banks....................................121
(d) Conclusion ................................................................................................... 122
(3) Legal Dispute relating to an Investment – Issues 9 & 8 ......................................... 123
(a) Issues and Relevant Legal Provisions.......................................................... 123
(i) Definition and Role of an Investment – In General.......................................133
(ii) Investment under Article 1(1) BIT ................................................................137
(iii) Investment under Article 25 ICSID Convention ............................................141
(iv) Two Alternative Views on “Investment” Lead to the Same Result ................142
(v) Made in Argentina ........................................................................................144
(vi) In Compliance with the Law .........................................................................147
(d) Conclusion ................................................................................................... 149
(4) Between Argentina and Italian Investors - Issues 10 & 11 ..................................... 150
(i) Jurisdiction Rationae Personae – In General ...............................................158
(ii) With regard to Natural Persons ....................................................................159
(iii) With regard to Juridical Persons ..................................................................161
(d) Conclusion ................................................................................................... 165
(5) Subject to the Claimants‘ Written Consent – Issue 2 .............................................. 166
273

(i) Law Applicable to the Question of Consent ..................................................170
(ii) Scope of Examination of the Tribunal...........................................................170
(iii) Relevant Substantive Validity Requirements .................................................171
(iv) Argentina’s Standing to Challenge Claimants’ Consent...............................173
(v) Existence and Validity of Claimants’ Consent ..............................................174
(vi) Existence of a Clear Consent to ICSID Arbitration ......................................177
(vii) Validity of Claimants’ Consent to ICSID Arbitration ...................................178
(d) Conclusion ................................................................................................... 183
(6) Subject to Argentina‘s Written Consent – Issues 1(a), 4 & 8 ................................. 183
(i) In General .....................................................................................................187
(ii) Regarding Foreign Debt Restructuring ........................................................187
(iii) Regarding “Mass Claims” ...........................................................................188
(iv) Regarding the Negotiation and 18 Months Litigation Requirement .............193
(v) Regarding the Forum Selection Clauses .......................................................194
(d) Conclusion ................................................................................................... 195
(7) Conclusion on Jurisdiction ..................................................................................... 195
D. ADMISSIBILITY OF THE CLAIM ............................................................................................ 201

(1) Introductory Remarks ............................................................................................. 201
(2) Mass Action – Issue 1(b) ........................................................................................ 201
(i) Interpretation of the Silence of the ICSID Framework .................................206
(ii) Powers of the Arbitral Tribunal under Article 44 ICSID Convention and
Rule 19 ICSID Arbitration Rules ..................................................................207
(iii) Nature of the Necessary Adaptations to the ICSID Standard Procedure ......210
(iv) Admissibility of the Necessary Adaptations ..................................................211
(v) Policy Considerations ...................................................................................215
(d) Conclusion ................................................................................................... 216
(3) Consultation Requirement – Issue 4 ....................................................................... 217
(a) Issues and Relevant Legal Provision ........................................................... 217
(i) Existence of Consultations ............................................................................219
(ii) TFA’s Role in the Consultations ...................................................................220
(iii) Consultations Requirement as Expression of Good Will ..............................221
(d) Conclusion ................................................................................................... 222
274
(4) 18 Months Litigation Requirement – Issues 4 & 5 ................................................. 222

(i) The System Put in Place by Article 8 BIT .....................................................226
(ii) General Consequences of a Disregard of the System ...................................227
(iii) Consequences of Claimants’ Disregard of the 18 Months Litigation
Requirement ..................................................................................................229
(d) Conclusion ................................................................................................... 231
(5) Withdrawal and Addition of Claimants - Issues 3(a) and 3(b) ............................... 232
(a) Relevant Facts ............................................................................................. 232
(b) Issues and Relevant Legal Provisions.......................................................... 234
(c) Parties‘ Positions ......................................................................................... 238
(d) Tribunal‘s Findings ..................................................................................... 240
(i) Addition of Claimants ...................................................................................240
(ii) Withdrawal of Claimants ..............................................................................243
(a) Withdrawal, Discontinuance and Default .........................................243
(b) Conditions for Discontinuance .........................................................245
(c) Terms of Discontinuance..................................................................247
(d) Consequences of the Discontinuance ...............................................249
(e) Conclusion ................................................................................................... 250
(6) Abuse of Rights – Issue 2(b)................................................................................... 252
(a) Issues ........................................................................................................... 252
(i) Good Faith in the Context of Treaty Claims .................................................253
(ii) Qualification of the Alleged Abuse of Rights ................................................255
(iii) Lack of Relevant Abuse of Rights..................................................................256
(d) Conclusion ................................................................................................... 258
(7) Conclusion on Admissibility .................................................................................. 258
E. OTHER PROCEDURAL ISSUES .............................................................................................. 263

(1) In General: Managing the Procedure ...................................................................... 263
(a) Introduction ................................................................................................. 263
(b) Splitting of the Merits Phase ....................................................................... 264
(c) Conclusion ................................................................................................... 265
(2) Specific Procedural Aspects ................................................................................... 265
(a) Admissibility of Substitute Annexes – Issue 3(a) ........................................ 265
(b) Other Procedural Aspects ............................................................................ 268
IV. COSTS .......................................................................................................................................... 269
275
V. THE 11 ISSUES SERIATIM - ANSWERS AND REFERENCES .............................................. 273
VI. DECISIONS .................................................................................................................................. 279
276
Abbreviations
In this Decision, the Tribunal adopts the following abbreviations:
- ―RfA‖ refers to Claimants‘ Request for Arbitration of 14 September 2006.
- ―R-MJ‖ refers to Respondent‘s First Memorial on Jurisdiction and

Admissibility filed on 8 August 2008.
- ―C-MJ‖ refers to Claimants‘ Counter-Memorial on Jurisdiction filed on 7

November 2008.
- ―R-R-MJ‖ refers to Respondent‘s Reply Memorial on Jurisdiction and

Admissibility filed on 23 February 2009.
- ―C-R-MJ‖ refers to Claimants‘ Rejoinder Memorial on Jurisdiction filed on 6

May 2009.
- ―First Session Tr.‖ refers to the transcript made of the First Session of 10
April 2008 (Tr. p. 1/1 means Transcript on page 1 on line 1).
- ―First Session Minutes‖ refers to the Minutes of the First Session of 10 April
2008.
- ―Exh. C[letter]-[N°]‖ refers to Claimants‘ exhibits.
- ―Exh. R[letter]-[N°]‖ refers to Respondent‘s exhibits.
- ―Hearing Tr.‖ Refers to the transcript made of the Hearing on Jurisdiction

held from 7 to 13 April 2010 (Hearing Tr. Day 1 p. 1/1 means Transcript of
the Hearing Day 1, page 1 on line 1).
- ―C-PHB‖ refers to Claimants‘ Post-Hearing Brief of 22 June 2010.
- ―R-PHB‖ refers to Respondent‘s Post-Hearing Brief of 22 June 2010.
277
With regard to the witness and expert statements,:
- ―BIANCHI I‖ refers to Legal Opinion of Dr. Alberto B. Bianchi of 5

November 2008;
- ―BIANCHI II‖ refers to the Supplementary Legal Opinion of

Dr. Alberto B. Bianchi of 6 May 2009;
- ―BRIGUGLIO‖ refers to the Opinion of Prof. Avv. Antonio Briguglio of 13

February 2009;
- ―CERNIGLIA‖ refers to the Declaration of Avv. Massimo Cerniglia of 4 May

2009;
- ―COTTANI I‖ refers to the Expert Report by Joaquín A. Cottani of 7 November

2008;
- ―CREMIEUX‖ refers to the Expert Report of Pierre-Yves Cremieux (Analysis

Group, Inc.) of 18 February 2009;
- ―HARDIE I‖ refers to the Expert Report of Iain Hardie of 6 November 2008;
- ―ILLUMINATO‖ refers to the Declaration of Dott. Sergio Mario Illuminato of

10 February 2009;
- ―MAIRAL I‖ refers to the Legal Opinion of Héctor A. Mairal of 6 November

2008;
- ―NAGAREDA‖ refers to the Expert Opinion of Richard A. Nagareda of 19

February 2009;
- ―NAVIGANT I‖ refers to the Expert Report of Brent C. Kaczmarek, CFA

(Navigant Consulting, Inc.) of 7 November 2008;
278
- ―PICARDI‖ refers to the Independent Legal Opinion of Prof. Nicola Picardi of

24 April 2009;
- ―PINGLE I‖ refers to the Expert Report of Mr. Rex E. Pingle of 7 November

2008;
- ―SLAUGHTER & BURKE-WHITE I‖ refers to the Expert Witness Statement of

Anne-Marie Slaughter and William Burke-White of 8 August 2008;
- ―SUSMEL‖ refers to the Legal Opinion of Francisco G. Susmel of 5 November

2008.
279
I. PARTIES
A. CLAIMANTS
1. Claimants, as presented by Claimants, are those described in the Annexes A, B and

C to the Request for Arbitration, as substituted, the total number of whom at the
time of initiation of the arbitration exceeded 180,000 1 (hereinafter referred to as
―Claimants‖). Annexes A and B to the Request for Arbitration contain a list of
natural persons; Annex C to the Request for Arbitration contains a list of juridical
entities.
2. Annex D to the Request for Arbitration contains a power of attorney and delegation
of authority for each Claimant being a natural person to White & Case LLP (see
page 1 above). Annex E to the Request for Arbitration contains a power of attorney
and delegation of authority for each Claimant being a juridical person to White &
Case LLP (see page 1 above).
3. According to Claimants, Claimants are mostly natural persons of Italian nationality

or juridical persons incorporated and existing under the laws of Italy.
4. Claimants are represented in these proceedings by ―l’Associazione per la Tutela

degli Investitori in Titoli Argentini‖ (hereinafter ―Task Force Argentina‖ or
―TFA‖). The nature of TFA‘s representation, its specific role and position in, and
its impact on the present proceedings are disputed between the Parties and will be
dealt with by the Tribunal in the relevant part of this Decision.
1
See C-MJ § 164, stating that the total number of Claimants at the time of filing the C-MJ is
180,285. See also Navigant I § 27 and Cremieux § 22.
10
280
B. RESPONDENT
5. Respondent is the Argentine Republic (hereinafter referred to as ―Respondent‖ or

―Argentina‖).
6. Respondent is represented in this arbitration by its duly authorised attorneys

mentioned at page 2 above.
7. Claimants and Respondent are hereinafter collectively referred to as the ―Parties.‖
11
281
(viii) Issue 10: The Tribunal has jurisdiction rationae personae over each Claimant
who is a natural person to the extent set forth above in § (7) (iii);
(ix) Issue 11: The Tribunal has jurisdiction rationae personae over each Claimant
who is a juridical person to the extent set forth above in § (7) (iii).
503. The remaining Issues 1(b), 2(b), 3(a), 3(b), 4 and 5 are issues of admissibility and
will be dealt with in the section below.
D. ADMISSIBILITY OF THE CLAIM
(1) Introductory Remarks
504. In section C above, the Tribunal has established that it has – as a matter of principle
and without making a determination with respect to any individual Claimants –
jurisdiction over the present dispute. However, in order for the Tribunal to hear the
present case, it is further necessary that the claims raised by Claimants be
admissible.
505. As mentioned above (see §§ 245 et seq.), the difference between jurisdictional and
admissibility issues is not always clear. Consequently, some of the issues addressed
in this section may have been invoked by the Parties within the context of the
Tribunal‘s jurisdiction. However, the Tribunal considers that these issues are not
matters of jurisdiction but of admissibility. Where this applies, any argument raised
by the Parties with regard to these issues and aiming to establish a lack of
jurisdiction is addressed below as an argument of lack of admissibility.
(2) Mass Action – Issue 1(b)
(a) Issues and Relevant Legal Provisions
506. Although the Tribunal considers that the ―mass‖ aspect is not a hurdle to its
jurisdiction, it must further examine whether this ―mass‖ aspect is – as it is a point
of dispute between the Parties – admissible under the current ICSID framework.
201
282
507. Thus, the specific issues to be determined by the Tribunal here are the following:
- Is a ―mass action‖ like the present one compatible with the current ICSID
framework and spirit, also giving due regard to the existing framework for
sovereign debt restructuring?
- If so, what are the procedural adaptations that the Tribunal would need to
implement in order to make such a ―mass action‖ workable in an ICSID
arbitration. In particular:
(i) With regard to admissibility requirements, should the Tribunal refer to

principles applicable to ―class actions‖ and other aggregate litigations
as known under certain legal regimes?
(ii) With regard to modalities of the procedure, may the Tribunal limit
procedural rights of one Party where such limitation is necessary to
ensure the other Party‘s procedural rights?
- Are such adaptations covered by the Tribunal‘s power to decide on

procedural issues?
508. The key legal provisions in dealing with the above issues are the following: Article
44 ICSID Convention and Rule 19 ICSID Arbitration Rules.
509. Article 44 ICSID Convention provides as follows:
―Any arbitration proceeding shall be conducted in accordance with the

provisions of this Section and, except as the parties otherwise agree, in
accordance with the Arbitration Rules in effect on the date on which the
parties consented to arbitration. If any question of procedure arises which is
not covered by this Section or the Arbitration Rules or any rules agreed by the
parties, the Tribunal shall decide the question.‖
510. Article 19 ICSID Arbitration Rules provides as follows:
202
283
―The Tribunal shall make the orders required for the conduct of the
proceeding.‖
(b) Parties’ Positions
511. Respondent contends that mass proceedings as the present one are not admissible
under the current ICSID framework. To support its position, Respondent brings
forward the following main arguments:178
(i) The ICSID framework does not provide and does not allow mass claims.
Article 44 ICSID Convention simply permits the Tribunal to decide
procedural questions with respect to matters over which it already has
jurisdiction. It does not provide a basis for the Tribunal to exercise
jurisdiction over proceedings that are not authorized by the ICSID
Convention and to which the parties did not consent in the relevant BIT;
(ii) The present mass action cannot be compared to a multi-party arbitration, and
resembles more a type of class action. Even if such mass claim was
considered allowed under the current ICSID framework, the way this
arbitration was initiated and conducted is not in compliance with generally
recognized principles applicable to class actions and similar collective
proceedings (e.g., regarding the role and position of the representative);
(iii) Such mass claim proceedings are unmanageable because individualized facts
and circumstances are relevant not only for the merits but also for the
jurisdiction (e.g., whether the specific investment was made in accordance
with applicable laws, whether the Claimants‘ signature are all authentic, etc.)
and could not be duly ascertained.
178
See R-MJ §§ 138 et seq., 154 et seq., 264; R-R-MJ §§ 159 et seq., 178 et seq., 184 et seq.;
R-PHB §§ 22 et seq.
203
284
512. In addition, Respondent contends that the opening of ICSID arbitration with regard
to sovereign debt restructuring would be counter-productive in so far as it would
encourage hold outs.179 As such, it would go against current efforts to modernize
foreign debt restructuring processes. Consequently, in order to preserve the
efficiency of foreign debt restructuring mechanisms, the Tribunal should deem the
present claims inadmissible.
513. In contrast, Claimants contend that the present mass proceedings are within the
jurisdictional limits of ICSID, the question of its management being a question of
mere procedure covered by Article 44 ICSID Convention and thereby within the
power of the Tribunal. Claimants‘ main arguments are as follows:180
(i) This proceeding is not different from any other multi-party arbitration, the
only particularity being the unusually high number of Claimants. Multi-party
proceedings are widely admitted under current ICSID arbitration practice, and
since the ICSID framework contains no limitation on the number of possible
parties, there is no reason to treat this claim differently from any other multi-
party arbitration;
(ii) Collective proceedings are further consistent with the purpose and object of
the BIT, since the high number of Claimants is inherent to the nature of the
investments protected by the BIT (see § 490 above);
(iii) The present claims are proper and manageable: (a) Claimants are from a
single jurisdiction, they have identical claims arising out of the same State
measures under the same BIT and stand in an identical posture vis-à-vis
Respondent; (b) the individual facts and issues detailed by Respondent (i.e.,
179
R-MJ §§ 62.
180
C-MJ §§ 313 et seq., 333 et seq., 350 et seq.; C-R-MJ §§ 316 et seq., C-PHB §§ 125 et seq.,
§§ 190 et seq.
204
285
the individual circumstances of the purchase of the bonds) are not material to
the Tribunal‘s core task of determining whether a specific set of actions taken
by Argentina constituted a violation of the BIT; (c) Argentina‘s due process
rights would not be infringed; and (d) the Tribunal is well-equipped to adopt
procedures to handle the claims under Article 44 ICSID Convention.
Consequently, it is only just and efficient to hear these cases jointly.
514. With regard to the policy argument raised by Respondent, Claimants contend that
Respondent‘s view is outdated and irrelevant. The major threat to the efficiency of
foreign debt restructuring would be rogue debtors, such as Argentina.
Consequently, opening the door to ICSID arbitration would create a supplementary
leverage against such rogue debtors and therefore be beneficial to the efficiency of
foreign debt restructuring.
(c) Tribunal’s Findings
515. As mentioned above (see §§ 489-492), the Tribunal finds that the issue of whether
or not the present mass proceedings could be conducted in the form of collective
proceedings is an issue of admissibility and not of consent.
516. To recall, Respondent contends that arbitration in the form of collective

proceedings is not provided for by ICSID, that this silence is a ―qualified silence‖
that should be interpreted to mean that collective arbitration is not possible and not
admissible under the current ICSID framework, and in particular that the Tribunal
cannot rely on Article 44 ICSID Convention or Rule 19 ICSID Arbitration Rules to
create its own solution to the problems raised by the high number of Claimants.
517. It is undisputed that the ICSID framework contains no reference to collective

proceedings as a possible form of arbitration. The key question here is how to
interpret this silence. In particular, the Tribunal is tasked with the assessment of
whether this silence should be considered a ―qualified silence,‖ meaning an
intended silence indicating that it does not allow for something that is not provided,
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or whether it is to be considered a ―gap,‖ which was unintended and which the

Tribunal has the power to fill. In the latter case, the Tribunal shall further determine
whether the adaptations which would be needed to fill this gap, i.e., to manage the
present proceedings, fall within the scope of its powers as deriving from Article 44
ICSID Convention and/or Rule 19 ICSID Arbitration Rules.
(i) Interpretation of the Silence of the ICSID Framework
518. As mentioned above (see §§ 489-492), the Tribunal finds that, in the light of the
absence of a definition of investment in the ICSID Convention, where the BIT
covers investments which are susceptible of involving a high number of investors,
and where such investments require a collective relief in order to provide effective
protection to such investment, it would be contrary to the purpose of the BIT, and
to the spirit of ICSID, to require in addition to the consent to ICSID arbitration in
general, a supplementary express consent to the form of such arbitration.
519. For these same reasons and as further developed below, the Tribunal finds that it
would be contrary to the purpose of the BIT and to the spirit of ICSID to interpret
this silence as a ―qualified silence‖ categorically prohibiting collective proceedings,
just because it was not mentioned in the ICSID Convention:
- First, at the time of conclusion of the ICSID Convention, collective

proceedings were quasi inexistant, and although some discussions seem to
have taken place with regard to multi-party arbitrations, these dicussions were
not conclusive on the intention to either accept or refuse multi-party
arbitrations, and even less so with regard to the admissibility of collective
proceedings;
- ICSID sets forth a standard arbitration mechanism. Insofar as investments can

be of a varying nature and scope, it is possible that the current ICSID
procedure may not be fully adapted to resolve a dispute arising out of any
kind of investment. Indeed, where an investment, protected under a BIT
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providing for ICSID arbitration, shows certain particular characteristics, these

characteristics may influence the way of conducting the arbitration, and lead
the Tribunal to make certain adaptations to the standard procedure in order to
give effect to the choice of ICSID arbitration. The need for certain
adaptations to the standard ICSID arbitration procedure merley derives from
the impossibility to anticipate all kinds of possible investments and disputes,
and is certainly not a sufficient motive to simply close the door of ICSID
arbitration to investors who are not ―standard investors‖ having made
―standard investments.‖ However, it is understood that adaptations made to
the standard procedure must be done in consideration of the general principle
of due process and must seek a balance between procedural rights and
interests of each party.
520. Thus, the silence of the ICSID framework regarding collective proceedings is to be
interpreted as a ―gap‖ and not as a ―qualified silence.‖ Consequently, the Tribunal
has, in principle, the power under Article 44 ICSID Convention to fill this gap.
However, this does not mean that the scope of this power is unlimited. Rather, the
Tribunal is bound by the limits set forth by Article 44 ICSID Convention.
(ii) Powers of the Arbitral Tribunal under Article 44 ICSID

Convention and Rule 19 ICSID Arbitration Rules
521. As mentioned above (see § 509), Article 44 ICSID Convention provides that where
the ICSID framework is silent on a procedural question, which is also not subject to
the parties‘ agreement, the Tribunal shall decide the question. Within the context of
arbitration proceedings, this rule is further complemented by Rule 19 ICSID
Arbitration Rules, according to which ―the Tribunal shall make the orders required
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for the proceeding.‖ These provisions are the mere expression of the inherent power
of any tribunal to resolve procedural questions in the event of lacunae.181
522. As a matter of principle, the power of a tribunal is limited to the filling of gaps left
by the ICSID Convention and the Arbitration Rules. In contrast, a modification of
existing rules can only be effected subject to the parties‘ agreement, in accordance
with minimum standards of fair procedure and to the extent that the rules to be
modified are not mandatory (in the sense that they restate mandatory provisions of
the Convention).182
523. A tribunal‘s power is further limited to the filling of gaps left by the ICSID
framework in the specific proceedings at hand, and a tribunal‘s role is not to
complete or improve the ICSID framework in general. As such, a tribunal‘s power
to fill gaps will usually be limited to the design of specific rules to deal with
specific problems arising in the proceedings at hand.
524. Considering the above, the Tribunal cannot:
- modify the current arbitration rules without the Parties‘ consent. A revision of
the ICSID Arbitration Rules can only be done by the Administrative Council,
which is the body competent to adopt the Arbitration Rules under Article
6(1)(c) ICSID Convention; or
- adopt a full set of rules of procedure unless the Parties have agreed that the
Arbitration Rules adopted by the Administrative Council should not apply
without substituting their own rules.
181
See e.g. SCHREUER, op. cit. fn. 98, Ad Article 44 § 54.
182
See e.g. SCHREUER, op. cit. fn. 98, Ad Article 44 §§ 20 et seq.
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289
525. The Tribunal, however, can and ought to fill gaps left where the application of
existing rules are not adapted to the specific dispute submitted to ICSID arbitration.
In such a case, the filling of the gap does not consist of an amendment of the
written rule itself, but rather of an adaptation of its application in a specific case.
526. As mentioned above (see §§ 518-520), the Tribunal finds that the silence of the
ICSID Convention concerning collective proceedings is to be seen as a ―gap.‖ As
such, the Tribunal has, in principle, the power to fill this gap. The key question at
hand thus, is the following:
Can the Tribunal fill the gap created by the collective aspect of the
claim on an ad hoc basis and through the design of specific rules, or
would this require the creation and/or modification of general rules
which are under the competence of the Administrative Council?
527. This question cannot (and should not) be answered in the abstract. Not only would
this imply creating general principles thereby relying on a terminology, which is as
diverse and varied as the currently existing forms and modalities of collective
proceedings, but it would also go beyond the powers of the Tribunal to fill a
specific gap regarding the conduct of specific proceedings. What the Tribunal
however can (and should) do is to analyse this question in a concrete manner, i.e.,
asking itself (i) what are the specific rules that would be necessary in order to be
able to conduct the present proceedings under the ICSID framework, and (ii) can
these specific rules, in the light of their nature and scope, be considered to fall
within the power of the Tribunal as deriving from Article 44 ICSID Convention and
Rule 19 ICSID Arbitration Rules.
528. When answering these questions, the Tribunal shall, in accordance with the
principles of interpretation of treaties, not only ask itself whether, from a technical
perspective, it can make such adaptations, but also whether, based on the object and
purpose of the ICSID Convention, it should do so.
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(iii) Nature of the Necessary Adaptations to the ICSID Standard

Procedure
529. Notwithstanding the high number of Claimants involved, the Tribunal must
examine not only the elements necessary to determine its jurisdiction (i.e., the
nationality of the Claimants, their status of investor and the existence of their
investment, etc.), but also those necessary to establish Claimants‘ claims and
relating to the merits of the case (i.e., the existence of a breach by Argentina of its
obligations under the BIT, the effect of such breach on Claimants‘ investment,
etc.). Thus, the high number of Claimants may not serve as an excuse not to
examine such elements and adaptations to the procedure may therefore not affect
the object of the Tribunal‘s examination.
530. However, it appears that adaptations to hear the present case collectively would
concern not that much the object of the examination, but rather (i) the way the
Tribunal will conduct such examination, and/or (ii) the way Claimants are
represented.
531. With regard to the examination, it is undeniable that the Tribunal will not be in a
position to examine all elements and related documents in the same way as if there
were only a handful of Claimants. In this respect, the Tribunal would need to
implement mechanisms allowing a simplified verification of evidentiary material,
while this simplification can concern either the depth of examination of a document
(e.g. accepting a scanned copy of an ID document instead of an original), or the
number of evidentiary documents to be examined, and if so their selection process
(i.e. random selection of samples instead of a serial examination of each document)
(see §§ 668 et seq. below). However, such a simplification of the examination
process is to be distinguished from the failure to proceed with such examination.
532. With regard to the mechanism of representation, it is true that TFA has been
provided with powers which may go beyond the power granted to a normal agent
under Rule 18 ICSID Arbitration Rules (see §§ 455 et seq. above). Admitting the
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present collective proceedings would thus also mean accepting TFA‘s role as due
representative of Claimants.
533. In conclusion, the procedure necessary to deal with the collective aspect of the
present proceedings concerns the method of the Tribunal‘s examination, as well as
the manner of representation of Claimants. However, it does not affect the object of
such examination. Further, the Tribunal remains obliged to examine all relevant
aspects of the claims relating to Claimants‘ rights under the BIT as well as to
Respondent‘s obligations thereunder subject to the Parties‘ submissions. Thus, it is
the manner in which the Tribunal will conduct such examination which may
diverge from usual ICSID proceedings.
(iv) Admissibility of the Necessary Adaptations
534. Considering the above (§§ 529-533), the adaptations required to deal with the
collective aspect of the claims are issues which relate strictly to the manner of
conducting the present proceedings, and in particular, how to collect and weigh
evidence. In other words, the nature of these measures and their scope do not
exceed the powers of the Tribunal as deriving from Article 44 ICSID Convention
and Rule 19 ICSID Arbitration Rules.
535. The Tribunal is entitled to proceed with such adaptations under the relevant
provisions of the ICSID framework. As mentioned above (see § 528), the Tribunal
is, however, of the opinion that it should not only examine whether it can do so but
also whether it should do so based on the aim and purpose of the ICSID Convention
and in particular, with regard to the equilibrium established by the Convention with
regard to the Parties‘ respective rights.
536. For this purpose, the Tribunal will firstly examine the implications of the intended
adaptations. These implications are twofold: (i) It will not be possible to treat each
Claimant as if he/she was alone and certain issues, such as the existence of an
expropriation, will have to be examined collectively, i.e., as a group; and (ii) the
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implications will likely limit certain of Claimants‘ and Argentina‘s procedural

rights to the extent that Claimants have to waive individual interests in favor of
common interests of the entire group of Claimants, while Argentina will not be able
to bring arguments in full length and detail concerning the individual situation of
each of the Claimants.
537. The Tribunal finds it appropriate to compare the consequences of these implications
to the consequences of rejecting the claims for lack of admissibility and requesting
each Claimant to file an individual ICSID claim. In this regard, the Tribunal finds
that not only would it be cost prohibitive for many Claimants to file individual
claims but it would also be practically impossible for ICSID to deal separately with
60,000 individual arbitrations. Thus, the rejection of the admissibility of the present
claims may equal a denial of justice. This would be shocking given that the
investment at stake is protected under the BIT, which expressly provides for ICSID
jurisdiction and arbitration.
538. Thus, the question arises whether in the light of the present circumstances it would
be justified to set strict boundaries to certain of the Parties‘ procedural rights, while
adapting a method of examination so as to give actual effective protection to the
investment. The challenge lies in finding the right balance.
539. In the search for the right balance, the Tribunal considers the following issues to be
relevant: (i) under what conditions is it acceptable to change the method of
examination from individual to group treatment; (ii) to what extent are Argentina‘s
defense rights affected in comparison to 60,000 separate proceedings; and (iii) is it
admissible to deprive Claimants of certain procedural rights, such as provided for
under the TFA Mandate Package?
540. (i) Pre-conditions for group treatment: The Tribunal is of the opinion that group
examination of claims is acceptable where claims raised by a multitude of
claimants are to be considered identical or at least sufficiently homogeneous. The
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question is thus whether Claimants‘ claims are to be considered identical or

sufficiently homogeneous.
541. In this respect, it is important to recall that the present proceedings concern only
potential treaty claims and do not deal with any contractual claims Claimants may
have against Argentina and/or the banks (see §§ 316-332 above). Thus, the identity
or homogeneity requirement applies to the investment and the rights and
obligations deriving therefrom based on the BIT and not to any potential
contractual claims. In other words, in the present case, it is irrelevant whether
Claimants have or do not have homogeneous contractual rights to repayment by
Argentina of the amount paid for the purchase of the security entitlements. The
only relevant question is whether Claimants have homogeneous rights of
compensation for a homogeneous damage caused to them by potential
homogeneous breaches by Argentina of homogeneous obligations provided for in
the BIT.
542. Therefore, the specific circumstances surrounding individual purchases by

Claimants of security entitlements are irrelevant. If Italian or other banks have
breached any obligations they had towards Claimants or Argentina, such a breach is
to be addressed in a recourse action against the relevant banks (see §§ 327-330
above) and is foreign and external to the present arbitration which concerns solely
Argentina‘s behavior with regard to Claimants‘ investment.
543. With regard to the nature of the claims deriving from the BIT, it appears to be
homogeneous:
- The rights deriving from Claimants‘ investment and Argentina‘s obligations

to protect these rights are the same with regard to all Claimants to the extent
that they derive from the same BIT and the same provisions. Indeed, first, the
provisions of the BIT invoked by Claimants are identical for all Claimants;
second, the rights allegedly affected all derive from Claimants‘ purchase in
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Italy of security entitlements in Argentinean bonds; third, all these security

entitlements were subject to the Exchange Offer 2005 (see § 312 above);
- The events leading to the alleged disregard of such rights and obligations, i.e.
to the breach by Argentina of the relevant provisions, are the same towards all
Claimants. They all relate to the acts of Argentina preceding and following its
public default in December 2001, and in particular the way it consulted with
its creditors, the way it reached a decision on how to deal with its foreign
debt, as well as the way it implemented such decision, namely through its
Exchange Offer 2005 and the legislation and regulations relating thereto. In
doing so Argentina treated all Claimants in the same manner and did not
differentiate between different kinds of Claimants (see § 313 above).
- The legislation and regulations promulgated and implemented by Argengina,

together with the implementation of its Exchange Offer 2005, affected all
Claimants in the same way. Thus, the potential damage caused to Claimants
is, by nature the same for all Claimants although the scope of such damage
will of course depend on the scope of their individual investment.
544. Consequently, Claimants‘ claims are to be considered sufficiently homogeneous to

justify a simplification of the examination method and procedure.
545. (ii) Effects on Argentina’s defense rights: It appears that the effect of such
examination method and procedure on Argentina‘s defense rights is limited and
relative. Whilst it is true that Argentina may not be able to enter into full length and
detail into the individual circumstances of each Claimant, it is not certain that such
approach is at all necessary to protect Argentina‘s procedural rights in the light of
the homogeneity of Claimants‘ claims. In addition, the only alternative would be to
conduct 60,000 separate proceedings. The measures that Argentina would need to
take to face 60,000 proceedings would be a much bigger challenge to Argentina‘s
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effective defense rights than a mere limitation of its right to individual treatment of
homogeneous claims in the present proceedings.
546. (iii) Deprivation of Claimants’ procedural rights: It is undeniable that the TFA
Mandate Package has the effect to depriving Claimants of a substantial part of their
procedural rights, such as the decision on how to conduct the proceedings, the right
to instruct the lawyers, etc. However, as mentioned above (see §§ 457-465), the
setting of strict boundaries in relation to Claimants‘ procedural rights has been
consciously accepted by Claimants in order to benefit from the collective treatment
of their claims before an ICSID tribunal. In addition, the Tribunal did not find that
such agreement was affected by any vice which would render it invalid.
Consequently, the Tribunal sees no reason to disregard – as a matter of principle –
Claimants‘ conscious choice.
547. In conclusion, under the present circumstances, the procedure necessary to deal
with Claimants‘ claims in a collective way is admissible and acceptable under
Article 44 ICSID Convention, Rule 19 ICSID Arbitration Rules, as well as under
the more general spirit, object and aim of the ICSID Convention.
(v) Policy Considerations
548. To recall (see § 476 above), the Tribunal found that Respondent‘s arguments
regarding the appropriateness of ICSID proceedings in the context of sovereign
debt restructuring are not an impediment to the Respondent‘s consent to ICSID
arbitration.
549. Similarly, the Tribunal finds that those policy arguments are also not an
impediment to the admissibility of Claimants‘ claims. In the Tribunal‘s view, such
policy arguments are inapposite. As mentioned above (§ 478), the real question is
whether the investment at stake is protected under a BIT providing for ICSID
arbitration in case of breach of such protection. If this is the case, then ICSID has
jurisdiction, and it would be wrong to hinder the effective exercise of such
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jurisdiction through the rejection of the admissibility of the claims based merely on
policy considerations. This is all the more the case here as the present policy
considerations are controversial and based on Respondent‘s assumption that the
biggest threat to the stability and fairness of sovereign debt restructuring are
holdout creditors.
550. Policy reasons are for States to take into account when negotiating BITs and
consenting to ICSID jurisdiction in general, not for the Tribunal to take into
account in order to repair an inappropriately negotiated or drafted BIT. The present
BIT is clear, it includes bonds and security entitlements (see §§ 352-361 above).
Whether or not ICSID is the best way to deal with a dispute relating to these bonds
and security entitlements in the context of foreign debt restructuring is irrelevant.
The Parties chose ICSID arbitration for this kind of dispute. They, as well as the
Tribunal, are bound by such choice and cannot evade it based on controversial
policy reasons.
(d) Conclusion
551. In conclusion and in (partial) response to Issue No. 1(b), the Tribunal holds that the
mass aspect of Claimants‘ claims does not constitute an impediment to their
admissibility. In particular:
(i) The silence of the ICSID framework regarding collective proceedings is to be

interpreted as a ―gap‖ and not as a ―qualified silence;‖
(ii) The Tribunal has, in principle, the power under Article 44 ICSID Convention
to fill this gap to the extent permitted under Article 44 ICSID Convention and
Rule 19 ICSID Arbitration Rules;
(iii) The procedure necessary to deal with the collective aspect of the present
proceedings concern the method of the Tribunal‘s examination, as well as the
manner of representation of Claimants. However, it does not affect the object
of such examination. Thus, the Tribunal remains obliged to examine all
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297
relevant aspects of the claims relating to Claimants‘ rights under the BIT as
well as to Respondent‘s obligations thereunder subject to the Parties‘
submissions;
(iv) Such procedure is admissible and acceptable under Article 44 ICSID

Convention, Rule 19 ICSID Arbitration Rules, as well as under the more
general spirit, object and aim of the ICSID Convention;
(v) Respondent‘s policy arguments regarding the appropriateness of ICSID

proceedings in the context of sovereign debt restructuring are irrelevant for
the determination of the admissibility of the claims.
(3) Consultation Requirement – Issue 4
(a) Issues and Relevant Legal Provision
552. Article 8(1) BIT provides that the investor and the Host State shall in case of a
dispute try first to settle their dispute through the means of amicable consultation.
The Parties hold diverging views as to the nature of this consultation requirement
and the consequence of a non-compliance therewith on the admissibility of the
present claims.
553. Thus, the specific issues to be determined by the Tribunal here are the following:
- Is the requirement of preliminary amicable consultation a mandatory

requirement, which constitute a hurdle to the admissibility of a claim
introduced without fulfilling such requirement? (connected with Issue 4 of the
List of 11 Issues of 9 May 2008)
- If so, can the consultation requirement be considered to have been met in the
present case?
- If not, should Claimants be considered to have been released from such

consultation requirement based on the futility rule?
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554. The key legal provision concerning the above issues is Article 8(1) BIT, which in
its unofficial English version provides as follows (see § 267 et seq. above):
―1. Any dispute in relation to the investments between a Contracting Party

and an investor of the other Contracting Party in relation to the issues
governed by this Agreement shall be settled, if possible, by means of amicable
consultation between the parties to the dispute.‖
(b) Parties’ Positions
555. In Respondent‘s view, Article 8 BIT articulates a multi-layered, sequential dispute

resolution system setting forth mandatory requirements which Claimants have not
complied with and therefore, constitute a jurisdictional bar.
556. In particular, Respondent submits that Article 8 provides for a mandatory three-step
dispute resolution as further supported by the wording and spirit of Article 8(3) and
8(4) BIT.183
557. With regard to the consultation requirement, Respondent contends that Claimants
have not complied therewith because (i) it is unclear how far TFA actually
represented Claimants at the time of the talks between TFA and Respondent, (ii)
TFA‘s attitude was one of bad faith, and (iii) the talks with TFA concerned
Argentina‘s default and not any alleged treaty violation.
558. In contrast, Claimants contend that Article 8 BIT may not constitute a bar to the
present arbitration based mainly on the following arguments:184
(i) Based on the permissive language used, Article 8 BIT aims to provide the
parties with different options of dispute resolution and does not institute a
compulsory multi-layered, sequential dispute resolution system;
183
R-MJ §§ 382 et seq.; R-R-MJ §§ 652 et seq.; R-PHB §§ 267 et seq.
184
C-MJ §§ 544 et seq.; C-R-MJ §§ 543 et seq.; C-PHB §§ 323 et seq.
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299

300
[Cite as Parker v. Dimension Serv. Corp., 2018-Ohio-5248.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
Champion Chrysler, Plymouth Jeep, :

and Ed Parker et al.,
:
Plaintiffs-Appellees,
: No. 17AP-860
v. (C.P.C. No. 17CV-0342)
:
Dimension Service Corporation, (REGULAR CALENDAR)
:
Defendant-Appellant.
:
D E C I S I O N
Rendered on December 27, 2018
On brief: Kegler Brown Hill + Ritter Co. LPA, Thomas W.

Hill, and Robert G. Schuler, for appellees. Argued:
Thomas W. Hill.
On brief: Nardone Limited, Vincent J. Nardone, and

Christopher W. Tackett, for appellant. Argued:
Christopher W. Tackett.
APPEAL from the Franklin County Court of Common Pleas
HORTON, J.
{¶ 1} Defendant-appellant, Dimension Service Corporation ("Dimension"),
appeals from a judgment of the Franklin County Court of Common Pleas that granted the
plaintiffs-appellees' motion to confirm a final arbitration award and overruled
Dimension's motion to vacate the final arbitration award. For the following reasons, we
affirm the judgment.
I. FACTUAL AND PROCEDURAL HISTORY
{¶ 2} Dimension administers vehicle service contracts to automobile purchasers.
Each of the appellees, Champion Chrysler, Plymouth Jeep and Ed Parker, Bert Ogden
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No. 17AP-860 2
Dealer Group, Ferguson Dealer Group, Allen Tillery Chevrolet and Great Lakes Insurance
Agency, Inc., entered into a Profit Share Agreement ("PSA") with Dimension.1 All of the
appellees, except Great Lakes Insurance Agency, Inc., were car dealers and offered
consumers a Dimension vehicle service contract at the point of sale. On July 28, 2014,
appellees and Darryl Hickman (collectively "claimants") served a joint arbitration demand
on Dimension pursuant to the mandatory arbitration provisions in the PSAs, arguing that
Dimension failed to make payments in violation of its obligation to do so under the PSAs.
Claimants filed a single demand for consolidated arbitration because they were each
pursuing claims for additional profit share payments pursuant to identical PSAs. The
arbitration demand nominated Kirk Borchardt to serve as the claimants' selected
arbitrator. Dimension nominated Frank A. Ray as its selected arbitrator. The final
arbitrator, Richard Neville was selected. On January 12, 2015, Dimension objected to the
consolidated arbitration.
{¶ 3} After briefing, on March 16, 2015, the arbitration panel held that the claims
of the six claimants would be consolidated for discovery and motion practice purposes.
The panel examined the PSAs finding the same language in each granted the panel broad
authority. The consolidation decision set forth that, "[t]he Panel, having been granted
this broad authority, finds that this is a proper case for consolidated discovery and motion
practice based in part on the principle that arbitration is intended to be an efficient,
timely, and cost-effective alternative to litigation." (Mar. 16, 2015 Decision.) The decision
set forth that consolidation for discovery and motion practice purposes would "not
prevent separate, individual evidentiary presentations as to defenses or claims," and
Dimension was free to petition the arbitration panel to request a separate hearing for any
individual claimant and the panel would consider the request. (Decision.)
{¶ 4} In August 2015, Arbitrator Borchardt resigned from the arbitration panel.
Borchardt had accepted a job as a consultant for Innovative Aftermarket Systems, Inc.,
the parent company of First Dealer Resources, LLC, the entity that served as Dimension's
1Darryl Hickman was a claimant in the arbitration but the arbitration panel ruled in favor of Dimension and
against Hickman. Therefore, Hickman did not apply to have the arbitration confirmed and is not an
appellee in these proceedings.
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No. 17AP-860 3
marketing representative. Borchardt acknowledged that he was resigning because of the

conflict of interest.
{¶ 5} Subsequently, claimants appointed Jason Dubner to replace Borchardt.
Dimension objected to Dubner on September 18, 2015 because Dubner had previously
served as an arbitrator in a separate arbitration proceeding between Dimension and two
of the present claimants and because Dubner had previously represented clients of Frank
Klaus, an individual with business relationships with claimants. The arbitration panel
denied Dimension's request to disqualify Dubner.
{¶ 6} The arbitration panel issued an interim award on October 19, 2016, granting
relief to each of the appellees, but denying relief to Darryl Hickman. Dimension filed a
motion for reconsideration alleging calculation errors. The arbitration panel issued a final
award on December 27, 2016.
{¶ 7} Appellees filed an application for an order confirming the final arbitration
award in the Franklin County Court of Common Pleas and Dimension filed a motion to
vacate the final arbitration award. The trial court granted the motion to affirm and denied
the motion to vacate.
II. ASSIGNMENTS OF ERROR
{¶ 8} Dimension filed a timely notice of appeal and asserts the following
assignments of error:
[I.] By holding that the arbitration panel had authority to
consolidate six separate bilateral arbitration claim[s], the
Trial Court erred in its legal conclusion and ruled in conflict
with the U.S. Supreme Court ruling in Stolt-Neilsen v.
AnimalFeeds International, by failing to recognize that
parties must expressly consent to authorize consolidation of
separate claims.
[II.] The Trial Court erred in finding that the arbitration

panel did not exceed its authority under R.C. 2711.10(D),
while failing to consider the language of the arbitration
agreements, which did not grant the panel authority to
consider the request to consolidate or authority to order
consolidation.
[III.] The Trial Court erred in finding that the arbitration

panel had authority to consider consolidation regarding
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No. 17AP-860 4
Appellees' six separate claims against the Appellant

Dimension, because R.C. 2712.52 specifically provides that a
petition, along with proof of unanimous consent to
consolidation, must be filed with the courts to consolidate
separate arbitration claims.
[IV.] The Trial Court Erred in finding that the arbitration

panel had authority to consolidate any two of the appellees'
six separate claims against Dimension because the
consolidation question is a threshold arbitrability question
that was reserved for the Courts, as expressed in Shakoor v.
VXI Glob. Solutions, 2015-Ohio-2587, ¶ 48 (7th Dist.) and
Stolt-Nielsen.
[V.] The Trial Court erred in failing to consider that

Arbitrator Borchardt resigned from the arbitration panel for
a conflict of interest with Claimants' agent, and had
participated in the improper consolidation ruling, which
further tainted the consolidation ruling and amounted to
evident partiality.
[VI.] The Trial Court erred in failing to consider the nature

and extent of involvement that Claimants' agent had in
Claimants' disputes with Appellant Dimension, when the
Trial Court incorrectly ruled that the agent's prior financial
relationship with Arbitrator Dubner did not amount to
evident partiality, requiring the arbitration award to be
vacated under R.C. 2711.10.
[VII.] The Trial Court erred in ruling that the arbitration

panel did not exceed its authority when the arbitration panel
failed to consider the express language of all six agreements,
which stated that Allstate was required to calculate the
amount of any profit share payments due under the
agreements.
[VIII.] The Trial Court erred in failing to consider direct

evidence of double-counting to award more than $69,000
that Dimension had already paid to satisfy a 2012 arbitration
award, and erred in incorrectly finding that the double-
counting was within the panel's interpretive discretion.
III. ANALYSIS
{¶ 9} Ohio has a well-established public policy that favors arbitration. State v.
Ohio Civ. Serv. Emps. Assn., Local 11 AFSCME AFL-CIO, 10th Dist. No. 14AP-906, 2016-
304
No. 17AP-860 5
Ohio-5899, ¶ 12. Arbitration awards are presumed valid, and a reviewing court may not
merely substitute its judgment for that of the arbitrator. Id.
{¶ 10} "Once an arbitration is completed, a court has no jurisdiction except to
confirm and enter judgment (R.C. 2711.09 and 2711.12), vacate (R.C. 2711.10 and 2711.13),
modify (R.C. 2711.11 and 2711.13), correct (R.C. 2711.11 and 2711.13), or enforce the
judgment (R.C. 2711.14)." State ex rel. R.W. Sidley, Inc. v. Crawford, 100 Ohio St.3d 113,
2003-Ohio-5101, ¶ 22. "A trial court may not evaluate the actual merits of an award and
must limit its review to determining whether the appealing party has established that the
award is defective within the confines of R.C. Chapter 2711." Telle v. Estate of William
Soroka, 10th Dist. No. 08AP-272, 2008-Ohio-4902, ¶ 9. Since R.C. Chapter 2711 is the
method to challenge an arbitration award, "[t]he jurisdiction of the courts to review
arbitration awards is thus statutorily restricted; it is narrow and it is limited." Warren
Edn. Assn. v. Warren City Bd. of Edn., 18 Ohio St.3d 170, 173 (1985).
{¶ 11} R.C. 2711.10 provides that a court may vacate an award "upon the
application of any party," for any of the following reasons: (1) the award was procured by
corruption, fraud, or undue means; (2) there was evident partiality or corruption on the
part of the arbitrators; (3) the arbitrators are guilty of misconduct in refusing to postpone
the hearing, or refusing to hear pertinent and material evidence; or (4) the arbitrators
exceeded their powers, or so imperfectly executed them that a mutual, final, and definite
award upon the subject matter submitted was not made. R.C. 2711.10 thus "limits judicial
review of arbitration to claims of fraud, corruption, misconduct, an imperfect award, or
that the arbitrator exceeded his authority." Goodyear Tire & Rubber Co. v. Local Union
No. 200, United Rubber, Cork, Linoleum & Plastic Workers of Am., 42 Ohio St.2d 516
(1975), paragraph two of the syllabus.
{¶ 12} R.C. 2711.09 provides that when a party applies to the court for an order
confirming an arbitration award, the court "shall grant such an order and enter judgment
thereon, unless the award is vacated, modified, or corrected as prescribed in sections
2711.10 and 2711.11 of the Revised Code." "The language of R.C. 2711.09 is mandatory. If
no motion to vacate or modify an award is filed, the court must confirm an arbitration
award given a timely motion under R.C. 2711.09." MBNA Am. Bank, N.A. v. Jones, 10th
Dist. No. 05AP-665, 2005-Ohio-6760, ¶ 14.
305
No. 17AP-860 6
{¶ 13} "An appeal may be taken from an order confirming, modifying, correcting
or vacating an award made in an arbitration proceeding or from a judgment entered upon
an award." R.C. 2711.15. However, because "[a] trial court is precluded from evaluating
the actual merits of an award and must confine itself to determining whether the
appealing party has established that the award is defective in a manner recognized by R.C.
Chapter 2711," on appeal, "the standard of review is further restricted." MBNA Am. Bank,
N.A. at ¶ 10-11.
{¶ 14} "[W]hen a court of appeals reviews a trial court's judgment concerning an
arbitration award, the appellate court must confine its review to evaluating the order
issued by the trial court pursuant to R.C. Chapter 2711." State v. Ohio Civ. Serv. Emps. at
¶ 13. Thus, when "an appeal is taken from an order confirming, modifying, correcting, or
vacating an arbitration award, the review is confined to the order and the original
arbitration proceedings are not reviewable." Robert W. Setterlin & Sons v. North Mkt.
Dev. Auth., 10th Dist. No. 99AP-141 (Dec. 30, 1999), citing Lockhart v. Am. Reserve Ins.
Co., 2 Ohio App.3d 99, 101 (8th Dist.1981). That limited "review of the trial court's
decision confirming arbitration is conducted under an abuse of discretion standard."
MBNA Am. Bank, N.A. at ¶ 11.
{¶ 15} The trial court found that Dimension did not demonstrate evident partiality
and the arbitration panel did not exceed its authority, and thus, granted appellees' motion
to affirm and denied Dimension's motion to vacate the arbitration award. In its first four
assignments of error, Dimension argues that the trial court erred in finding that the
arbitration panel could properly consolidate the claims. Dimension argues four reasons
the consolidation constitutes an error. First, Dimension argues that the parties must
expressly consent to consolidation pursuant to Stolt-Nielsen S.A. v. AnimalFeeds
Internatl. Corp., 559 U.S. 662 (2010). Second, Dimension argues that the arbitration
panel exceeded its authority because the language of the arbitration agreements did not
grant the panel the authority to consolidate. Third, Dimension argues that the arbitration
panel did not have the authority to consider consolidation because, pursuant to R.C.
2712.52, a petition, along with proof of unanimous consent to consolidation, must be filed
with the courts to consolidate separate arbitration claims. Finally, Dimension argues that
the arbitration panel did not have the authority to consolidate because the consolidation
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No. 17AP-860 7
question is a threshold arbitrability question that was reserved for the courts, as expressed
in Shakoor v. VXI Global Solutions, 7th Dist. No. 14 MA 59, 2015-Ohio-2587, ¶ 48 and
Stolt-Nielsen.
{¶ 16} Dimension contends that Stolt-Nielsen held that arbitrators cannot force
collective arbitration and express consent is required to consolidate bilateral arbitrations.
However, Stolt-Nielsen specifically applies to class actions. Dimension mischaracterizes
the Stolt-Nielsen holding because the United States Supreme Court held that express
consent is required to consolidate class-action arbitrations, not bilateral arbitrations,
because class-action arbitrations are fundamentally different from bilateral action
arbitrations. As the court explained, class-action arbitration "changes the nature of the
arbitration" because the arbitrator's award "no longer resolves a single agreement, but
instead resolves many disputes between hundreds or perhaps even thousands of parties."
Stolt-Nielsen at 686. "The arbitrator's award no longer purports to bind just the parties to
a single arbitration agreement, but adjudicates the rights of absent parties as well." Id.
{¶ 17} In this case, the arbitrators consolidated the actions for the limited purposes
of discovery and motion practice. Further, the arbitration panel's decision expressly
permitted Dimension to request a separate hearing for any individual claimant but
Dimension did not make any such requests. Moreover, we note that Dimension waited
more than five months after the joint demand for arbitration was made to object to the
consolidation.
{¶ 18} Dimension argues that the arbitrators exceeded their authority by
consolidating the actions because the PSAs did not grant the panel authority to consider
the request to consolidate or authority to order consolidation. The Federal Arbitration
Act provides that an arbitration panel only has the rights and duties that are provided
under the contract. Reyna Capital Corp. v. McKinney Romeo Motors, Inc., 2d Dist. No.
24538, 2011-Ohio-6806, ¶ 37.
{¶ 19} The arbitration provision in the PSAs provides:
The arbitrators need not observe judicial formality or strict
rules of evidence, and they shall make their award from a
standpoint of practical business practices and equity rather
than strict law.
307
No. 17AP-860 8
(PSA at ¶ 13.)
{¶ 20} The panel observed, based on this broad authority, that these cases were
proper for consolidated discovery and motion practice as an efficient, timely, and cost-
effective alternative to litigation. Since the contracts were identical and the defenses were
likely identical, the panel found consolidation permissible by the contract language and
efficient. (Mar. 16, 2015 Decision.) The arbitrators did not violate any provision in the
agreements by consolidation. Rather, the language gives the arbitrators broad powers.
{¶ 21} Dimension argues that R.C. 2712.52 requires a petition to the court and
unanimous consent of the parties for consolidation of arbitration. R.C. 2712.52 provides,
as follows:
(A) If the parties to two or more arbitration agreements have
agreed, in their respective arbitration agreements or
otherwise, to consolidate the arbitrations arising out of those
arbitration agreements, the court of common pleas, on
application by one party with the consent of all the other
parties to those arbitration agreements, may do one or more
of the following:
(1) Order the arbitrations to be consolidated on terms the

court considers just and necessary;
(2) If all the parties cannot agree on an arbitral tribunal for

the consolidated arbitration, appoint an arbitral tribunal in
accordance with section 2712.20 of the Revised Code;
(3) If all the parties cannot agree on any other matter

necessary to conduct the consolidated arbitration, make any
other order it considers necessary.
(B) Nothing in this section shall be construed to prevent the

parties to two or more arbitrations from agreeing to
consolidate those arbitrations and taking any steps that are
necessary to effect that consolidation.
{¶ 22} R.C. Chapter 2712 is not applicable to these facts. R.C. 2712.02(A) provides:
"This chapter applies to international commercial arbitration and conciliation, subject to
any agreement that is in force between the United States or any other state or states."
R.C. 2712.03(A)(1) defines "international arbitration" as one in which "[t]he parties to an
arbitration or conciliation agreement have, at the time of the conclusion of that
308
No. 17AP-860 9
agreement, their places of business in different states." A "state" is defined in R.C.

2712.03(B) "[f]or purposes of this section, the states, districts, commonwealths,
territories, and insular possessions of the United States and the areas subject to the
legislative authority of the United States shall be considered one state." Thus, since these
facts do not involve international commercial arbitration, it is inapplicable here.
{¶ 23} Finally, in its brief, Dimension argues that consolidation is a threshold
question of arbitrability for the courts to determine. Dimension cites West v. Household
Life Ins. Co., 170 Ohio App.3d 463, 2007-Ohio-845, ¶ 12 (10th Dist.), for the proposition
that "identifying the allowable parties to an arbitration is a fundamental question of
arbitrability, which may only be decided by the courts, and not an issue of procedural
arbitrability." (Dimension brief at 38.) However, again Dimension misconstrues the case
law. In West, an insurer sought a motion to stay proceedings and compel arbitration. The
insurer was not a party to the arbitration rider and the subject matter of the litigation was
outside the scope of the arbitrable issues. West is distinguishable from the case at hand
because its facts involved a motion to stay litigation already pending in the court, a party
who was not a party to the arbitration rider and an issue that was not within the scope of
the arbitrable issues. Thus, this court determined that the trial court needed to determine
whether the parties before the court were the same parties named in the agreement to
arbitrate and whether they agreed to arbitrate the dispute in question before the trial
court orders arbitration. The holding was not that consolidation is a threshold question of
arbitrability for the courts.
{¶ 24} Federal Circuit Courts of Appeal have consistently held that the matter of
consolidation is not a threshold question of arbitrability for a court to decide, but, rather,
is a matter of procedure for the arbitrator. See Certain Underwriters at Lloyd's London
v. Westchester Fire Ins. Co., 489 F.3d 580, 587 (3d Cir.2007)("In this case, the parties
agree that they agreed to arbitrate the matter -- the question is merely whether they
agreed to individualized or consolidated proceedings as a matter of procedure.") ("[I]n the
face of contractual silence, arbitral resolution of procedural issues is presumed[.]"); Emps.
Ins. Co. of Wausau v. Century Indemnity Co., 443 F.3d 573, 577 (7th Cir.2006) citing
Dockser v. Schwartzberg, 433 F.3d 421, 427 (4th Cir.2006) ("[T]he question of whether
an arbitration agreement forbids consolidated arbitration is a procedural one, which the
309
No. 17AP-860 10
arbitrator should resolve."); Shaw's Supermarkets, Inc. v. UFCW, 321 F.3d 251, 254 (1st
Cir.2003)("The issue before us is who should make the determination as to whether to
consolidate the three grievances into a single arbitration: the arbitrator or a federal court.
Since each of the three grievances is itself concededly arbitrable, we think the answer is
clear. * * * this is a procedural matter for the arbitrator."); Blimpie Internatl. Inc. v.
Blimpie of the Keys, 371 F.Supp.2d 469, 473-74 (S.D.N.Y.2005)("Whether an arbitration
proceeding should be consolidated with one or more other arbitration proceedings is a
question * * * properly addressed by the arbitrator."). We find that the trial court did not
err in finding that the arbitration panel did not exceed its authority in finding that the
cases were proper for consolidated discovery and motion practice. Therefore,
Dimension's first, second, third, and fourth assignments of error are overruled.
{¶ 25} In its fifth and sixth assignments of error, Dimension contends that the trial
court erred in failing to consider that evident partiality existed requiring the arbitration
award to be vacated under R.C. 2711.10. Dimension provides two arguments of evident
partiality, (1) that Arbitrator Borchardt had a conflict of interest which tainted his
participation in the panel's decision to consolidate for purposes of discovery and motion
practice , and (2) Arbitrator Dubner was biased because Dubner had previously served as
an arbitrator in a separate arbitration proceeding between Dimension and two of the
present claimants and because Dubner had previously represented clients of Frank Klaus,
an individual with business relationships with claimants.
{¶ 26} R.C. 2711.10 provides, as follows:
In any of the following cases, the court of common pleas
shall make an order vacating the award upon the application
of any party to the arbitration if:
(A) The award was procured by corruption, fraud, or undue

means.
(B) Evident partiality or corruption on the part of the

arbitrators, or any of them.
(C) The arbitrators were guilty of misconduct in refusing to

postpone the hearing, upon sufficient cause shown, or in
refusing to hear evidence pertinent and material to the
310
No. 17AP-860 11
controversy; or of any other misbehavior by which the rights

of any party have been prejudiced.
(D) The arbitrators exceeded their powers, or so imperfectly

executed them that a mutual, final, and definite award upon
the subject matter was not made.
If an award is vacated and the time within which the

agreement required the award to be made has not expired,
the court may direct a rehearing by the arbitrators.
{¶ 27} Dimension's first argument is that Arbitrator Borchardt resigned as a

member of the arbitration panel because of a conflict of interest because he accepted a
position as legal consultant to the parent company of First Dealer Resources, LLC, the
entity that had served as Dimension's marketing representative for the programs that
were the subject of the arbitration. Dimension contends that since Borchardt participated
in the decision to consolidate, that decision must have been tainted by his conflict of
interest and the trial court erred in not vacating the arbitration award.
{¶ 28} Appellees argue that Dimension waived the argument that Arbitrator
Borchardt had a conflict of interest that tainted his participation because Dimension did
not present this argument to the trial court. It is well-settled that issues not raised in the
trial court may not be raised for the first time on appeal because such issues are deemed
waived. Whitmer v. Zochowski, 10th Dist. No. 15AP-52, 2016-Ohio-4764, ¶ 54.
Regardless, Dimension's argument has no merit.
{¶ 29} Arbitration awards are entitled to a presumption of regularity and formality,
and implicit in this presumption is that the arbitrator acted with integrity. In re Furtado
v. Hearthstone Condo Assn., 10th Dist. No. 86AP-1003 (May 19, 1987). "To overcome the
presumption of regularity because of an alleged bias on the part of the arbitrator, the
appellant must demonstrate 'evident partiality.' " (Citations omitted.) Reynoldsburg City
School Dist. Bd. of Edn. v. Licking Hts. Local School Dist. Bd. of Edn., 10th Dist. Np.
11AP-173, 2011-Ohio-5063, ¶ 25. Evident partiality " 'connotes more than a mere
suspicion or appearance of partiality.' " Furtado, citing Merit Ins. Co. v. Leathersby Ins.
Co., 714 F.2d 673, 681-682 (7th Cir.1983); Internatl. Produce, Inc. v. A/S Rosshavet, 638
F.2d 548, 551 (2d Cir.1981). Some evidence of actual bias or evidence of circumstantial
311
No. 17AP-860 12
fact which would give rise to a question of bias must be presented. Reynoldsburg City
School Dist. Bd. of Edn. at ¶ 25, citing Beck Suppliers, Inc. v. Dean Witter Reynolds Inc.,
53 Ohio App.3d 98 (6th Dist.1988).
{¶ 30} The decision to consolidate was issued in March 2015. Arbitrator Borchardt
did not accept the position that created the conflict of interest until August 2015.
Borchardt resigned as a member of the arbitration panel immediately. Dimension did not
provide any direct evidence of bias but argues that Borchardt must have been biased when
the consolidation decision was made because he admitted a conflict of interest five
months later. However, there is no evidence that Borchardt had any conflict of interest at
the time of the consolidation decision. Some evidence of actual bias or evidence of
circumstantial fact which would give rise to a question of bias must be presented and
Dimension has not done so.
{¶ 31} Dimension's second argument is that Arbitrator Dubner was biased because
Dubner had previously served as an arbitrator in a separate arbitration proceeding
between Dimension and two of the present claimants and because Dubner had previously
represented clients of Frank Klaus, an individual with business relationships with
claimants. Dubner did not represent Klaus or any of the applicants. Moreover, the
representation began in 2008 and had ended years before the arbitration panel issued its
decision.
{¶ 32} Dimension provides no argument and no authority as to why an arbitrator
demonstrates bias when he had previously served as an arbitrator for the parties. The
Seventh Circuit Court of Appeals has held that an arbitrator is not disqualified simply
because he has served on previous arbitration panels for the same parties or the same
contracts. See Trustmark Ins. Co. v. John Hancock Life Ins. Co., 631 F.3d 869 (7th
Cir.2011). The Seventh Circuit held that an arbitrator should be disinterested, but
disinterested means "lacking a financial or other personal stake in the outcome." Id. at
872.
{¶ 33} Dimension argues that the handful of arbitration transcript pages it
submitted demonstrate that Dubner had a financial state in the PSAs. However, the
transcript pages demonstrate that First Dealer Resources is a subagency to appellee Great
Lakes. Klaus is a principal of Great Lakes. (Tr. at 162-63.) Dubner represented clients of
312
No. 17AP-860 13
Klaus but not Klaus or any of the applicants. The testimony did not demonstrate that
Dubner had a financial interest in the PSAs.
{¶ 34} The trial court observed that the arbitration panel thoroughly considered
the issue but determined that Dubner was qualified to serve on the panel. The trial court
found that a relationship eight years prior to the arbitration and one that involved no
direct representation between Dubner and Klaus was too tenuous and remote to establish
bias or evident partiality.
{¶ 35} Dimension cites Close v. Motorists Mut. Ins. Co., 10th Dist. No. 84AP-696
(Apr. 25, 1985), as an example of an arbitration award that is void when there is evidence
of actual arbitrator bias or of significant circumstantial evidence demonstrating bias.
However, in Close, the arbitration award was vacated because the arbitrator was a partner
in a law firm that had an ongoing relationship with one of the parties. This court stated,
"[w]e hold, therefore, that an arbitrator's partnership in a law firm having a substantial,
continuing attorney-client relationship with a party is grounds for vacating an arbitration
award under Rev. Code § 2711.10(B)." Id. Close is distinguishable from these facts,
however, because this case does not involve a continuing relationship and it does not
involve representation of a party.
{¶ 36} Another similar case is Beck Suppliers, Inc, supra. In Beck Suppliers, Inc.,
the motion to vacate the arbitration award was based on the fact that one of the
arbitrators was a partner in a law firm that had represented the parent and sister
corporations of Dean Witter. Even though Dean Witter prevailed in the arbitration, the
court found that the arbitration did not need to be vacated. The Sixth District Court of
Appeals held that the arbitrator's relationship to Dean Witter was "too indirect and
remote to substantiate any inference of bias." Id. at 103.
{¶ 37} Here, the evidence in support of Dimension's position is indirect and
tenuous, at best, to prove arbitrator partiality. With our limited review and the significant
burden on Dimension to demonstrate evident partiality, we find no error in the trial
court's decision. Thus, Dimension's fifth and sixth assignments of error are overruled.
{¶ 38} In its seventh and eighth assignments of error, Dimension contends that the
trial court erred in ruling that the arbitration panel did not exceed its authority when it
failed to find that Allstate was required to calculate the amount of any profit share
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No. 17AP-860 14
payments due under the agreements and in failing to consider direct evidence of double
counting to satisfy a 2012 arbitration award, and erred in incorrectly finding that the
double counting was within the panel's interpretive discretion.
{¶ 39} Dimension's arguments raise legal and factual issues that are within the
scope of the arbitrator's authority. Ohio courts "do not sit to hear claims of factual or legal
error by an arbitrator." Southwest Ohio Regional Transit Auth. v. Amalgamated Transit
Union, Local 627, 91 Ohio St.3d 108, 110 (2001), quoting United Paperworkers Internatl.
Union, AFL-CIO v. Misco Inc., 484 U.S. 29, 37-38 (1987).
{¶ 40} Dimension argues that the trial court should have vacated the arbitration
award because the panel failed to follow the contract's requirements that Allstate
determine the profit shares. Dimension's argument is based on paragraph two of the
PSAs. The arbitration panel found paragraph two ambiguous and examined the parties'
course of dealing. The course of dealing demonstrated that Dimension historically
calculated the profit share payments, not Allstate. Since the arbitration panel reviewed
the PSAs, the trial court properly declined to review and vacate the arbitration award. A
trial court may not review an arbitration award and vacate it based on a factual
disagreement. See, e.g., Office of Collective Bargaining v. Ohio Civ. Serv. Emps. Assn.,
Local 11, 73 Ohio App.3d 392 (10th Dist.1992).
{¶ 41} Finally, Dimension argues that the arbitration panel failed to modify the
award to account for double recovery by Tillery and Great Lakes. Dimension contends
that the award mistakenly includes $69,524.15 that Dimension already paid to Tillery and
Great Lakes, along with corresponding interest ordered under the 2012 arbitration order.
(Dimension brief at 51.) After the arbitration panel issued its Interim Award, Dimension
submitted a Statement of Interest, Costs, and Motion to Reconsider the Interim Award
and set forth the same arguments to the arbitration panel. The arbitration panel
specifically mentions that it considered Dimension's Motion to Reconsider and awarded
Dimension one-sixth of its $2,876.50 in reimbursable costs claimed in its Motion to
Reconsider and denied all other relief sought. (Jan. 11, 2017 Final Award at 2.) The
arbitration panel specifically addressed and rejected Dimension's argument. As stated,
the trial court does not "sit to hear claims of factual or legal error by an arbitrator."
314
No. 17AP-860 15
Southwest Ohio Regional Transit Auth. Dimension's seventh and eighth assignments of
error are overruled.
IV. CONCLUSION
{¶ 42} For the foregoing reasons, all eight of Dimension's assignments of error are
overruled and the judgment of the Franklin County Court of Common Pleas is affirmed.
Judgment affirmed.
DORRIAN and BRUNNER, JJ. concur.
___________________
315

316
Volume 3
ICSID Secretariat
August 2, 2018
Proposals for Amendment of  

the ICSID Rules — Working Paper
Propositions d’amendement des  

règlements du CIRDI — Document de travail
Propuesta de Enmiendas a las

Reglas del CIADI — Documento de Trabajo
317
I. INTRODUCTION
1. The complexity of investment vehicles, the numerous investment instruments available,

and the multiple forum options offered by States for the same or related investment claims
raise the question of how to ensure that like cases are decided in a like manner and as cost-
effectively as possible.
2. Three procedural mechanisms in ICSID practice specifically address this concern: first, the
registration and adjudication of like claims in a single multiparty claim; second, full or
partial consolidation of like claims initiated separately by multiple parties; and third,
ancillary claims, especially counter-claims, before the same Tribunal hearing the main
claim. These are distinct mechanisms, but they all involve some degree of joint
determination of closely connected claims.
3. This Schedule addresses multiparty claims and consolidation. Ancillary claims, including
counter-claims, are discussed in Chapter VIII of the AR.
4. The ICSID Convention, AR and A(AF)R already permit multiparty claims and ancillary
claims, including counter-claims. As a result, the proposed amendments to the Rules
related to these mechanisms are minimal.
5. The ICSID Convention and the current AR and A(AF)R do not address consolidation of
claims. Proposed AR 38 and proposed A(AF)R Art. 48 propose a new rule for voluntary
consolidation and coordination of proceedings. In addition, this Schedule includes a draft
of a potential mandatory consolidation provision (proposed Rule 38BIS) for consideration
by Member States.
II. MULTIPARTY CLAIMS
6. “Multiparty claims” are claims brought by two or more claimants that initiate a single
proceeding by jointly filing a single Request for arbitration.
7. The ICSID Convention and AR do not expressly address multiparty claims. However, the
travaux préparatoires show that multiparty claims were anticipated by the drafters (see
e.g., History of the ICSID Convention, Vol. II-1, 400, 413). In practice, Tribunals have
consistently found that the ICSID Convention and AR, and the A(AF)R, allow multiparty
proceedings and current procedural rules have accommodated such claims.
8. Most multiparty cases have been brought by multiple claimants (as opposed to cases
involving multiple respondents). About 40% of all ICSID cases have involved multiple
claimants. Although the number of claimants in one case exceeded 180,000 (Abaclat and
others v. Argentina (ARB/07/5), Decision on Jurisdiction and Admissibility (August 4,
2011)), the great majority of cases have involved no more than two or three claimants and
have not posed difficulties from a procedural or case management perspective.
9. Examples of multi-claimant cases include claims regarding joint investments made by

investors affiliated through family ties (see e.g., von Pezold and others v. Zimbabwe
318
(ARB/10/15), Award (July 28, 2015), ¶¶118 et seq), by investors in a joint corporate
structure (e.g., holding company and subsidiary as in Noble Energy and Machala Power v.
Ecuador and Conelec (ARB/05/12), Decision on Jurisdiction (March 5, 2008)), unrelated
joint venture partners as in Suez et al v. Argentina, ARB/03/17, Decision on Liability, July
30, 2010; or various shareholders in the same local company as in Goetz and others v.
Burundi (ARB/95/3), Award (10 February 1999) ¶89;). Other multiparty claims have been
brought by unaffiliated investors challenging the same measures. For example, in
Funnekotter and others v. Zimbabwe (ARB/05/6), Award (April 22, 2009), 14 apparently
unrelated investors brought a claim alleging expropriation due to land acquisition
legislation of Zimbabwe.
10. Some multiparty claims invoke a single instrument of consent (a treaty, law or contract),
but many rely on multiple sources of consent, including different BITs (see e.g., OKO
Pankki Oyj and others v. Estonia (ARB/04/6), Award (November 19, 2007) or combine a
BIT claim with a claim based on contract or legislation (see e.g., Goetz and others v.
Burundi (ARB/01/2), Award (June 21, 2012)).
11. Consistent with Art. 36(3) of the Convention, ICSID’s practice has been to register a claim
submitted by two or more claimants in a single Request for arbitration if the claims are not
manifestly outside the jurisdiction of the Centre. Refusals to register a multiparty request
are uncommon, although there have been some. For example, a multiparty request would
be rejected where the multiple claims submitted have no factual connection whatsoever, or
where joint submission is barred by the relevant instrument(s) of consent.
12. As registration by the Centre is without prejudice to the powers of the Tribunal to decide
jurisdiction, competence and merits, a Tribunal can review whether a multiparty claim is
within the jurisdiction of the Centre or is otherwise within its competence. This includes
whether the claims are amenable to joint determination or whether a sufficient nexus exists
between the claims of multiple claimants in the proceeding.
13. Tribunals considering whether a multiparty claim can be maintained have considered
various factors, including whether: (i) a single dispute exists; (ii) the investment is the same
or was made jointly by the claimants; (iii) the underlying facts or the overall economic
transaction are the same; (iv) the investors or the claims are affiliated; (v) the challenged
measures are the same; (vi) the same respondents are named; or (vi) the remedies sought
are aligned. The more related the cases are, the more likely a Tribunal is to treat them
together - even over a party’s objection (see e.g., Noble Energy and Machala Power v.
Ecuador and Conelec (ARB/05/12), Decision on Jurisdiction (March 5, 2008), ¶¶186-207).
14. An objection to a multiparty claim can also be raised using special procedures available
under the current AR or A(AF)R. For example, an objection might be made that the
Tribunal does not have jurisdiction or competence under current AR 41(1)-(2) (proposed
AR 36 and (AF)AR 46) or that the multiple claims are manifestly lacking in legal merit
under current AR 41(5) (proposed AR 35 and (AF)AR 45).
15. Yet in practice respondents have rarely objected to the institution of a single proceeding by
multiple claimants (see e.g., Goetz and others v. Burundi (ARB/95/3), Award (10 February
319
1999); LG&E Energy Corp. and others v. Argentina (ARB/02/1), Decision on Objections
to Jurisdiction (April 30, 2004); Funnekotter and others v. Zimbabwe (ARB/05/6), Award
(April 22, 2009)). In the few cases in which an objection was raised, it has been rejected
(see e.g., Noble Energy and Machala Power v. Ecuador and Conelec (ARB/05/12),
Decision on Jurisdiction (March 5, 2008), ¶¶186-207; Ambiente Ufficio and others v.
Argentina (ARB/08/9), Decision on Jurisdiction and Admissibility (February 8, 2013);
Flughafen Zürich and Gestión e Ingeniería v. Venezuela (ARB/10/19), Award (November
18, 2014)).
16. At the same time, Tribunals have stressed that addressing claims jointly does not mean
merging the disputes, applicable laws, or remedies. Rather, each case must still be assessed
on its own facts and merits (see e.g., Flughafen Zürich and Gestión e Ingeniería v.
Venezuela (ARB/10/19), Award (November 18, 2014), ¶¶397-411).
17. Tribunals have also emphasized that a multiparty or mass claim is not a representative or
class claim, in which designated claimants pursue the litigation on behalf of a larger group
who fall within the definition of the class (e.g., Ambiente Ufficio and others v. Argentina
(ARB/08/9), Decision on Jurisdiction and Admissibility (February 8, 2013), ¶574).
18. Few comments were received by ICSID from States or the public with respect to multiparty
claims. Apart from general suggestions for more detailed regulation of multiparty claims,
only one State made a specific proposal. It suggested that a limit be set on the maximum
number of claimants permitted in a multiparty claim. This has not been incorporated in the
proposed Rules because it is difficult to identify the “right” number of claimants in a joint
claim without reference to the specific facts on which the claim is based.
19. Two law firms submitted comments suggesting that further work be done to craft suitable
procedures for mass claims and to specify when mass claims would be considered by a
Tribunal. The Centre will do further research on procedural techniques that could be used
to address cases with many claimants, including mass claims, and publish a set of “best
practices” in this regard.
20. Given that to date the current Rules have worked well for multiparty cases, few
amendments are proposed. The proposed rules that address the topic have clarified current
practice in multiparty cases and reaffirm that the rules apply in the same manner to a single
claimant or respondent as they do to multiple claimants or respondents. For instance, IR 1
now specifies that a request can be made by two or more requesting parties; IR 8 states that
any requesting party may withdraw before a request is registered, contemplating the
withdrawal of one claimant from a multiparty claim, and AR 2(1)(a) defines a party as
including several claimants or respondents, depending on the context (see also proposed
(AF)AR 10, CR 2, (AF)CR 10, (AF)FFR 2 and (AF)MR 2).
III. CONSOLIDATION
21. Consolidation is the joinder of two or more ongoing proceedings that were commenced
separately. Consolidation differs from multiparty claims mainly in respect of timing:
consolidation brings together two or more pending claims, whereas multiparty claims are
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initiated by multiple claimants or against multiple respondents from the start (see generally,
Chrysoula Mavromati and Meg Kinnear, “Consolidation of Cases at ICSID” in
Jurisdiction, Admissibility and Choice of Law in International Arbitration: Liber
Amicorum, Michael Pryles, edited by Neil Kaplan and Michael Moser (Kluwer Law
International, 2018).
22. The arguments for and against consolidation are relatively clear, although not simple to
reconcile. In many respects, these arguments oppose systemic interests with individual case
interests.
23. The policy arguments most often raised in favor of consolidation include the following:
• Avoidance of inconsistent or contradictory awards: a single Tribunal deciding cases

on a consolidated basis will apply similar logic and outcomes will be consistent;
• Avoidance of parallel proceedings: consolidation avoids parallel proceedings, at

least among cases where there is no jurisdictional bar to consolidation;
• The time and cost of consolidated proceedings should be less than for multiple,
individual proceedings, assuming the cases are sufficiently connected;
• By reducing time and cost, consolidation can enhance access to justice, especially
for small and medium sized investors and developing States;
• Consolidation may promote better decision-making because the arbitrators have a

more complete set of facts as context for their Award; and
• An ICSID consolidation rule could facilitate the joinder of proceedings based on

different instruments of consent (i.e., different treaties, contracts and legislation)
and relying on different sets of procedural rules (i.e., ICSID, Additional Facility,
UNCITRAL). Consolidation provisions in a single investment treaty usually cannot
accomplish this result.
24. The main arguments made against consolidation are that:
• Consolidation, especially mandatory consolidation, limits a party’s autonomy to

decide how and with whom to arbitrate a dispute (for a discussion on the role of
consent in a consolidation proceeding under NAFTA, see Canfor Corp. v. United
States of America and Terminal Forest Products v. United States of America
(UNCITRAL), Order of the Consolidation Tribunal (September 7, 2005); and Corn
Products International v. Mexico (ARB/(AF)/04/1) and Archer Daniels Midland
Co. & Tate & Lyle Ingredients Americas, Inc. v. Mexico (ARB/(AF)/04/5), Order
of the Consolidation Tribunal (May 20, 2005));
• Consolidation may put parties at a strategic disadvantage by having to agree on

common rules, strategy, arbitrators, schedules, witnesses, and legal argument. Both
claimants and respondents are concerned that consolidation limits their ability to
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pursue review of an Award. Claimants may also worry that the presentation of their
case will be weakened by co-claimants. Some respondents have insisted that each
claimant individually defend their claim rather than consolidating related cases. A
well-known example is the refusal of the Czech Republic to consolidate an
arbitration commenced by Central European Media (CME) and an arbitration
commenced by CME’s ultimate majority shareholder, Ronald S. Lauder (CME
Czech Republic B.V. v. The Czech Republic (UNCITRAL), Final Award (March
14, 2003), 2001, ¶427; Ronald S. Lauder v. The Czech Republic (UNCITRAL),
Final Award (September 3, 2001), ¶173). The CME and Lauder arbitrations
resulted in irreconcilable findings, and have frequently been criticized for rendering
inconsistent Awards based on the same fact situation;
• Consolidation may raise other complex case management issues, especially where
numerous cases are consolidated. These include scheduling, how to hear the
evidence of numerous parties, and how to assess damages and liability on an
individual basis;
• Parties may have concerns about maintaining confidentiality in a consolidated case.

In Corn Products, the Consolidation Tribunal refused to consolidate in part due to
concern about protecting sensitive commercial information of the co-claimants,
who were market competitors. On the other hand, in Canfor the Tribunal held that
confidentiality should not be ‘in and of itself a reason not to consolidate’, and that
confidential information could be protected through other means such as protective
orders;
• Consolidation can slow the progress of cases, especially at the beginning when the
terms of consolidation are being established. However, once established,
consolidation ought to reduce the time and cost overall of deciding the claims;
• It is virtually impossible to include every relevant party in any single consolidated

case. Parties may select different rules, initiate claims at different times or under
different treaties. While a consolidation mechanism under the ICSID Rules could
best mitigate these obstacles, no consolidation mechanism can avoid them entirely.
25. Consolidation can take various forms depending on the manner and extent to which
proceedings are joined. Full consolidation refers to consolidating two or more claims in all
respects. It combines multiple cases into one case, with one set of pleadings, a common
Tribunal, a common hearing and a single Award.
26. Partial consolidation refers to the situation where only some claims are brought together in
a consolidated proceeding, while the remaining claims stay with the individual Tribunals.
27. Some cases align only certain aspects of related cases, other aspects for individual
determination in each of the related proceedings. While these are sometimes called partial
consolidation, they might more accurately be termed as procedural alignment or case
coordination.
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28. Case coordination is used most frequently in practice. It involves a case-specific
combination of: (i) a single Tribunal deciding the related cases; (ii) joint hearing(s) on the
common issues in the related cases; (iii) a single set of pleadings for the claimant and
respondent positions; and (iv) a single Award (or the same Award) in each of the like cases.
29. Consolidation may be either voluntary (i.e., agreed to by the parties), or mandatory (i.e.,
imposed on related cases by operation of law).
30. This Schedule uses “consolidation” both for consolidation of all claims (full consolidation)
and consolidation of only some claims (partial consolidation). It uses the term
“coordination” where claims are not technically consolidated, but the parties agree to some
joint presentation of related cases.
31. The ICSID Convention, AR and A(AF)R currently do not have express provisions on
consolidation. Most commentators agree that absent an express consolidation rule, an
ICSID Tribunal cannot consolidate against the wishes of the parties (Christoph Schreuer et
al, The ICSID Convention: A Commentary (CUP, 2nd ed, 2009), ¶131). Of course, ICSID
cases may be consolidated voluntarily by agreement of the parties.
32. The proposed ICSID Rules could incorporate a voluntary consolidation rule, a mandatory
consolidation rule, or both. Proposed AR 38 suggests a voluntary consolidation provision
that also allows for coordination of cases. A mandatory consolidation provision for
discussion is provided in this schedule, but is not incorporated in the draft rule texts. A
Member State should first consider whether they want to include mandatory consolidation
in the ICSID Rules and if so, what approach should be taken to a mandatory consolidation
rule.
IV. VOLUNTARY CONSOLIDATION WITH PARTY CONSENT
33. The absence of an express consolidation rule has not prevented ICSID cases from being
consolidated by consent of the parties. The ICSID Secretariat has encouraged voluntary
consolidation in like cases and has coordinated such consolidation.
34. The scope of consolidation at ICSID has varied, with the nature of the joint procedures
tailored to the specific case. A variety of procedural tools have been used, including
appointing the same arbitrators, joint pleadings, joint hearings, common witnesses or
experts, or rendering one Award. Sometimes parties use all of these techniques and
sometimes they elect to use only some of these techniques in a case.
35. Most often, consolidation has been achieved by constituting Tribunals of the same
composition in cases that share a common legal and factual background. See, for example:
• Alcoa Minerals of Jamaica, Inc. v. Jamaica (ARB/74/2), Decision on Jurisdiction

and Competence (July 6, 1975), YB Comm. Arb. (1979) 206; Kaiser Bauxite v
Jamaica (ARB/03/22), Award (6 July 1975), 1 ICSID Rep. 296 (1993), and
Reynolds Jamaica Mines Ltd and Reynolds Metals co v Jamaica, (ARB/74/4),
Order taking note of the discontinuance of the proceedings (October 12, 1977);
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• Salini Costruttori and Italstrade v. Morocco (ARB/00/4), Decision on Jurisdiction
(July 23, 2001), 42 ILM 609 (2003) and Consortium RFCC v Kingdom of Morocco
(ARB/00/6), Award (December 22, 2003);
• Sempra Energy International v. Argentina (ARB/02/16), Award (September 28,

2007) and Camuzzi International v. Argentina (ARB/03/7), Decision of the Arbitral
Tribunal on Objections to Jurisdiction (June 10, 2005);
• Pan American Energy LLC and BP Argentina Exploration Company v. Argentina

(ARB/03/13) Decision on Preliminary Objections (July 27, 2006), ¶16;
• Suez, Sociedad General de Aguas de Barcelona S.A. and Interagua Servicios

Integrales de Agua S.A. v. Argentina (ARB/03/17), Decision on Jurisdiction (May
16, 2006) and Aguas Cordobesas S.A., Suez, and Sociedad General de Aguas de
Barcelona S.A. v. Argentina (ARB/03/18);
• Suez, Sociedad General de Aguas de Barcelona S.A. and Vivendi Universal S.A v.
Argentine Republic (ARB/03/19), Decision on Jurisdiction (August 3, 2006); and
AWG Group Ltd. v. The Argentina (UNCITRAL), Award (August 3, 2006);
• Gemplus, S.A., SLP, S.A. and Gemplus Industrial, S.A. de C.V. v. Mexico
(ARB(AF)/04/3) and Talsud, S.A. v. Mexico (ARB(AF)/04/4), Award (June 16,
2010);
• Kardassopoulos v. Georgia (ARB/05/18) and Fuchs v. Georgia (ARB/07/15),

Award (March 3, 2010);
• von Pezold and others v. Zimbabwe (ARB/10/15) Award (July 28, 2015) and
Border Timbers Limited v. Republic of Zimbabwe (ARB/10/25);
• Electricidad Argentina S.A. and EDF International S.A. v. Argentina (ARB/03/22)

and EDF International S.A., SAUR International S.A. and León Participaciones
Argentinas S.A. v. Argentina (ARB/03/23), Award (June 11, 2012) FN 1;
• Churchill Mining PLC and Planet Mining Pty Ltd v. Republic of Indonesia
(ARB/12/14 and 12/40), Award (December 6, 2016);
• Sanum Investments Limited v. Lao People’s Democratic Republic (ADHOC/17/1)

and Lao Holdings N.V. v. Lao People’s Democratic Republic (ARB(AF)/16/2),
Procedural Order No. 1 (May 16, 2017), ¶25.1.)
36. Some parties have effectively consolidated by agreeing to discontinue an existing case and
joining the claims into another, consolidated, proceeding (BSG Resources Limited, BSG
Resources (Guinea) Limited and BSG Resources (Guinea) SÀRL v. Republic of Guinea
(ARB/14/22), Procedural Order No. 5 (February 14, 2016), ¶¶1.2.1-1.2.2).
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37. In most of these cases, claimants were not related to each other but alleged harm caused by
similar measures of the same State. For example, in Alcoa Minerals of Jamaica, Kaiser
Bauxite, and Reynolds Jamaica Mines Ltd and Reynolds Metals co v. Jamaica each investor
had a mining concession contract with Jamaica, and claimed that the imposition of
additional taxes by Jamaica breached the contracts. In Salini v. Morocco and Consortium
R.F.C.C v. Morocco the claimants made claims arising out of highway construction
agreements each had entered with Morocco. In Sempra Energy International v. Argentina
and Camuzzi International S.A. v. Argentina the claimants were shareholders of the same
gas distribution company allegedly harmed by the Respondent’s measures.
38. Many consolidated claims at ICSID have relied on different investment instruments of
consent (e.g., Aloca, Kaiser and Reynolds Metals v. Jamaica; Salini and Consortium
R.F.C.C. v. Morocco; Sempra and Camuzzi v. Argentina). Although most have been based
on the same set of procedural rules, in particular the ICSID Convention AR, consolidation
of cases under different rules is also possible. Generally, this has been done by aligning the
composition of Tribunals and coordinating the proceedings. For example, in Suez,
Sociedad General de Aguas de Barcelona S.A. and Vivendi Universal S.A v. Argentina
(ARB/03/19), and AWG Group Ltd. v. The Argentine Republic (UNCITRAL) the parties
consented to have ICSID administer a related UNCITRAL case and to appoint the same
arbitrators in the ICSID and UNCITRAL proceeding. In Sanum Investments Limited v. Lao
People’s Democratic Republic (ADHOC/17/1) and Lao Holdings N.V. v. Lao People’s
Democratic Republic (ARB(AF)/16/2), the parties consented to have ICSID administer the
related ad hoc proceeding and appointed the same arbitrators in the two cases.
39. In most cases, the written and oral phase of the joined proceedings were coordinated, if not
consolidated, and Tribunals issued a single Award (i.e., in a single document). Finally, in
most consolidated cases, claimants were represented by same counsel.
40. As can be seen from the above, each consolidation requires tailor-made procedures for the
constitution of Tribunals, handling of evidence, legal argument, jurisdictional objections,
schedules, confidentiality, and the issuance of Awards. This is usual case management.
While it may be challenging with multiple cases or cases with numerous parties, it is
certainly achievable, especially where the parties cooperate in these decisions.
V. PROPOSED RULE ON VOLUNTARY CONSOLIDATION
41. Several States and practitioners suggested that a rule be added addressing coordination of
proceedings and voluntary consolidation, given their prevalence in practice. While an
express rule is not strictly required, such a provision is proposed for the sake of clarity.
42. The proposed Rule suggests a voluntary consolidation and coordination process. Proposed
AR 38 and (AF)AR 48 read as follows:
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AR 38 / (AF)AR 48
Consolidation or Coordination on Consent of Parties
(1) Parties to two or more pending arbitrations administered by the Centre may agree to
consolidate or coordinate these arbitrations.
(2) The parties referred to in paragraph (1) shall provide the Secretary-General with written
terms of reference, specifying the terms of consolidation or coordination to which they
would consent.
(3) The Secretary-General shall take all necessary administrative steps to implement the
agreement of the parties if the consolidation or coordination requested would promote a
fair and efficient resolution of all or any claims asserted in the arbitrations.
AR Article 38 / (AF)AR Article 48

Consolidation ou coordination consentie par les parties
(1) Les parties à un ou plusieurs arbitrages pendants et administrés par le Centre peuvent
convenir de consolider ou coordonner ces arbitrages.
(2) Les parties mentionnées au paragraphe (1) doivent fournir au ou à la Secrétaire

général(e) un acte de mission précisant les conditions de la consolidation ou de la
coordination à laquelle elles consentiraient.
(3) Si le ou la Secrétaire général(e) considère que la consolidation ou la coordination

demandée contribuera au règlement juste et efficace de toutes les demandes formulées
dans les arbitrages, il ou elle prendra toutes les mesures administratives nécessaires à la
mise en œuvre de l’accord des parties.
AR Regla 38 / (AF)AR Regla 48

Acumulación o Coordinación con el Consentimiento de las Partes
(1) Las partes de dos o más arbitrajes en curso administrados por el Centro podrán acordar
acumular o coordinar estos arbitrajes.
(2) Las partes a las que se hace referencia en el párrafo (1) le proporcionarán al o a la
Secretario(a) General términos de referencia escritos, especificando los términos de
acumulación o coordinación que aceptarían.
(3) El o la Secretario(a) General realizará todas las actuaciones administrativas que sean
necesarias para implementar el acuerdo de las partes si la acumulación o coordinación
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solicitada promoviera una resolución justa y eficiente de la totalidad o de algunas de las
reclamaciones planteadas en los arbitrajes.
43. The intent of this provision is to enable parties to consolidate or otherwise coordinate
related proceedings to the fullest extent possible. It is intended to apply to all arbitrations
“administered by the Centre”, whether under the ICSID Convention Arbitration Rules, the
Additional Facility Arbitration Rules or other arbitral rules including UNCITRAL and ad
hoc arbitration, subject to applicable jurisdictional limitations.
44. Under the proposed rule, parties could consolidate two or more arbitrations under the
ICSID Convention. This involves joining all or some claims under the ICSID Convention
Rules. Similarly, they could consolidate an ICSID Convention case with an UNCITRAL
or an ad hoc arbitration administered by the Centre. An UNCITRAL or an ad hoc
arbitration may also be consolidated into an ICSID Convention proceeding if the applicable
jurisdictional requirements are met.
45. If full or partial consolidation are not possible, parties can agree to case coordination. This
could include constituting Tribunals composed of the same arbitrator, establishing a
common timetable, providing for a single set of pleadings, holding joint hearings on
common issues in the related cases, simplifying the presentation of evidence, or having a
single Award. Any differences in the procedures required by the applicable rules would
have to be respected to the extent that the parties do not or cannot agree otherwise.
46. Proposed AR 38(2) asks the parties to submit their proposed terms of consolidation or
coordination in writing to the Secretary-General. This is to ensure that the parties’ proposal
addresses all the necessary aspects of the proposed arrangement (e.g., effect of previous
orders and decisions, if any; constitution or reconstitution of Tribunals, etc.), including the
steps to be taken by the Secretary-General (e.g., future case number and termination of
arbitrations, etc.). It is intended to avoid a voluntary agreement that does not anticipate all
necessary elements of coordination and could subsequently lead to delay or procedural
difficulty.
47. The motivation for proposed AR 38(3) is not to second-guess the parties’ decision to
consolidate or otherwise coordinate their proceedings, but to ensure that the terms of
reference can be properly implemented.
48. If proposed AR 38 is approved by Member States, ICSID will issue a practice note to assist
parties in considering potential terms of consolidation and drafting sufficiently detailed
terms of consolidation or coordination.
VI. MANDATORY CONSOLIDATION
49. The advantages and disadvantages of mandatory consolidation are the same as for
voluntary consolidation, with the obvious difference that a party cannot refuse a mandatory
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order of consolidation and hence cannot avoid any perceived adverse effects of
consolidation.
50. At least 100 existing investment treaties, out of more than roughly 3,400 concluded to date,
include consolidation provisions that may impose consolidation of all or part of a case if
the relevant test is met. Some arbitration rules also contain mandatory consolidation
provisions.
51. Article 1126 of NAFTA was among the first investment treaties to include a consolidation
provision (see Meg N. Kinnear, Andrea K. Bjorklund and John F.G. Hannaford, ‘Article
1126 – Consolidation’, in Investment Disputes Under NAFTA: An Annotated Guide to
NAFTA Chapter 11 (OUP 2009); Bernardo M. Cremades and Ignacio Madalena, Parallel
Proceedings in International Arbitration, (2008) 24(4) Arb. Int. 507).
52. Consolidation under NAFTA Article 1126 does not require the specific consent of the
parties to the dispute. Instead, parties are considered to have consented to consolidation
under Article 1126 by initiating their claim under NAFTA Chapter 11 (Canfor
Consolidation Order, paras 78-80; Henri C. Alvarez, Arbitration Under the North
American Free Trade Agreement, (2014) 16(4) Arb. Int. 393, 414-415).
53. The purpose of Article 1126 is to ensure procedural economy and avoid inconsistent results
(Canfor Consolidation Order). It is most likely to be invoked in situations where a single
NAFTA State measure has given rise to multiple claims by multiple investors.
54. The procedure under Article 1126 is relatively simple, and typical of most treaty
consolidation provisions. If one or more NAFTA Chapter 11 claims have a question of law
or fact in common, any disputing party can ask the Secretary-General of ICSID to establish
a Consolidation Tribunal. The Consolidation Tribunal must be appointed within 60 days
after the request. It is composed of arbitrators from the NAFTA roster, or to the extent not
available from that roster, from the ICSID Panel of Arbitrators. The President of the
Consolidation Tribunal may not be a national of either disputing party, but the co-
arbitrators must be nationals of the parties.
55. The Consolidation Tribunal can stay the individual proceedings while considering whether
to consolidate. It has discretion to consolidate claims that have a question of law or fact in
common if consolidation is in the interests of fair and efficient resolution of the claims.
The Consolidation Tribunal must hear the parties before making its decision on
consolidation. It can also assume jurisdiction over all or part of the claims or may determine
one or more of the claims if this would assist in the resolution of the others.
56. Article 1126 requires the consolidated claims to be conducted pursuant to the UNCITRAL
Arbitration Rules (presumably because Canada and Mexico were not ICSID members
when NAFTA was signed; although Canada is now a member and Mexico will be a
member effective August 26, 2018.
57. Once claims are consolidated, the original proceedings are stayed to the extent that they
will be addressed by the Consolidated Tribunal.
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58. A disputing party that was not involved in the consolidation application may apply to join
the consolidated case.
59. Three NAFTA cases to date have addressed Article 1126. The first was the Corn Products
case. Mexico applied to consolidate the claims of three American producers of high-
fructose corn syrup concerning the imposition of a 20 per cent excise tax on soft drinks
(Confirmation of Agreement of the Disputing Parties Regarding Consolidation, dated April
8, 2005. See Corn Products, Consolidation Order). Corn Products International requested
arbitration on October 21, 2003, while Archer Daniels Midland Co. and Tate & Lyle
Ingredients Americas, Inc. filed a request almost a year later, on August 4, 2004. On
September 8, 2004, Mexico submitted a detailed request for consolidation. Subsequently
Mexico and the claimants agreed on the composition and mandate of the Consolidation
Tribunal. The Consolidation Agreement also stipulated that should consolidation be
ordered, the disputing parties would agree on the composition of the Tribunal to hear the
consolidated cases, and that the consolidated proceedings would be governed by the ICSID
Additional Facility Arbitration Rules.
60. A Consolidation Tribunal was constituted on April 8, 2005 by the Secretary-General, in

consultation with the parties. The Consolidation Tribunal refused to consolidate the two
cases. Although it found that the claims shared questions of law or fact in common, it ruled
that consolidation would not be in the interests of a fair and efficient resolution of the
claims. The Consolidation Tribunal was especially concerned that complex confidentiality
measures would be required to protect sensitive business information of the three
applicants.
61. The second NAFTA request for consolidation was filed by the United States on March 7,
2005, with respect to three separate cases submitted by Canadian investors Canfor Corp.,
Terminal Forest Products Ltd, and Tembec Inc. The claimants were softwood lumber
producers alleging losses from American countervailing duty and antidumping measures
imposed on their products. In its request for consolidation, the United States contended that
common issues of law and fact called for consolidation.
62. The Consolidation Tribunal was constituted by the ICSID Secretary-General and held a
hearing on June 16, 2005. On September 7, 2005, the Tribunal granted the request for
consolidation (Canfor, Consolidation Order). After determining that the claims shared
many questions of law and fact, the Tribunal considered whether consolidation was ‘in the
interests of fair and efficient resolution of the claims’. In doing so, the Tribunal focused on
three factors: (i) time; (ii) cost; and (iii) avoidance of conflicting decisions. With respect to
time, the Consolidation Tribunal observed that no tribunal had yet issued a decision on
jurisdiction and so the consolidation was timely. As to cost, it concluded that consolidated
proceedings would be less costly for the U.S. than undertaking three separate arbitrations,
and that the cost for each of the claimants would increase, “but not excessively”. Finally,
the Consolidation Tribunal held that in light of the numerous common questions of law
and fact, there was a risk of conflicting awards if the cases were not consolidated.
63. The Canfor Consolidation Tribunal was not hindered by confidentiality concerns or the
absence of consent to consolidation. It found that consent to Chapter 11 arbitration included
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consent to consolidation. It also held that confidentiality is not a factor to be taken into
account when considering the interests of fair and efficient resolution of the claims, save
for exceptional cases where consolidation would defeat efficiency of process or would
infringe on due process.
64. The third NAFTA request for consolidation was in Canadian Cattlemen for Fair Trade v.
United States of America (UNCITRAL), Award on Jurisdiction (January 28, 2008)).
Between March 16, 2005 and June 2, 2005, Canadian nationals in the beef and cattle
business filed 109 different notices of arbitration alleging that US measures applied to
Canadian-origin livestock and beef products as a result of bovine spongiform
encephalopathy breached NAFTA Chapter 11. The Claimants organized themselves into
a group called “Canadian Cattlemen for Fair Trade” and agreed with the respondent US to
informal consolidation of their claims before a single tribunal. The consolidation
agreement was memorialized in Procedural Order No. 1. The case was eventually
dismissed for lack of jurisdiction.
VII. TREATY CONSOLIDATION PROVISIONS
65. About 100 investment treaties negotiated since NAFTA have provisions similar or
identical to NAFTA Article 1126.
66. Like Article 1126, most of these treaties do not require that the disputing parties
specifically consent to consolidation. Instead, they allow any party or all the disputing
parties to apply for consolidation and a Consolidation Tribunal determines whether to grant
the order based on criteria in the investment treaty. Only a small number of treaties require
specific consent to consolidation. Examples of treaty consolidation provisions are included
in: New-Zealand-China FTA (2008); China-Mexico BIT (2008); Malaysia-New Zealand
FTA (2009); Japan-Peru FTA (2011); Mexico-Bahrain BIT (2012); New Zealand- Taiwan
FTA ECA (2013); CETA (not yet in force); EU-Singapore FTA, Art. 3.24 (not yet in
force); CPTPP (not yet in force).
67. Under most treaty provisions, either disputing party can move for consolidation. No
specific cut-off date is set, although many treaties provide that consolidation should only
be ordered if it is in the interest of the efficient resolution of the cases. In practice, if the
cases to be consolidated are significantly advanced or on very different timelines,
consolidation arguably might not be in the interest of efficient resolution. Some treaties
allow parties to submit a joint application for consolidation (see e.g., EU-Singapore).
68. Most of the treaty consolidation provisions require that the claims to be consolidated share
a ‘question of law or fact in common’. They may impose further criteria, such as the claims
arising ‘out of the same events or circumstances’ or that consolidation serves the ‘interest
of fair and efficient resolution of the claims’ (see e.g., US Model BIT (2012), Art. 33(6);
CPTPP (not yet in force)). Some treaties, especially those concluded by Mexico, also
require that the claims are ‘in relation to the same investment’ and an absence of ‘harm’ or
‘serious harm’ caused by consolidating (see Mexico-Switzerland BIT (1995), Art. 6(2) and
6(3); Mexico-Netherlands BIT (1995), Art. 7(2) and 7(3); Mexico-Argentina BIT (1996),
Art. 4(2) and 4(3); Mexico-Germany BIT (1998), Art. 15(2) and 15(3); Mexico-Italy BIT
330
(1999), Art. 5(2) and (3); Mexico-Korea BIT (2000), Art. 11(2) and (3); Mexico-Czech
Republic BIT (2002), Arts 13(2) and (3); Mexico-Bahrain BIT (2012), Art. 14(2)).
69. Most of these treaties stipulate that the request for consolidation be made to the Secretary-
General of ICSID, who must establish a Consolidation Tribunal, generally 30 or 60 days
after receipt of the request. The new investment agreements concluded by the European
Union require that the consolidation request be submitted to the President of the Tribunal,
reflecting the investment court model adopted in these treaties (CETA, Art. 8.43.4. See
also EU-Vietnam FTA (agreed text as of January 2016), Chapter II, Section III, Art. 33(2).;
EU-Singapore).
70. A number of recent investment treaties vest the appointing authority (generally the
Secretary-General) with screening powers over the request for consolidation. The
applicable test for screening is that the consolidation request is not ‘manifestly unfounded’
(US Model BIT (2012), Art. 33(3); CPTPP (not yet in force)) The consolidation provision
in the Chile-Japan EPA also grants the ICSID Secretary-General additional screening
powers to consider whether the consolidation requirements in the treaty are met (Chile-
Japan EPA (2007), Art. 101(3)).
71. There are two main approaches with respect to the nomination of arbitrators to the
Consolidation Tribunal. The first approach requires all arbitrators to be appointed by a
neutral authority, usually the ICSID Secretary-General (see e.g., Chile-Japan EPA (2007),
Art. 101(3)). In several cases, treaties identify a specifically established FTA-roster or the
ICSID Panel of Arbitrators from which the arbitrators or at least the presiding arbitrator
must be selected (see e.g., Chile-Republic of Korea FTA (2003), Art. 10.28(4) and
10.30(5); Panama-Taiwan FTA (2003), Art. 10.25(4) and 10.27(5); Canada-Chile FTA
(1996), Art. G-25(4) and G-27(5); NAFTA, Art. 1124(4) and 1126(5). Generally, there
must be one national from each party, but the presiding arbitrator cannot be a national of
either party.
72. The second approach, which is found mainly in investment treaties concluded by the US,
requires that each party appoint one arbitrator and that the Secretary-General of ICSID
appoint the presiding arbitrator and any other arbitrator not appointed by a party (see e.g.
US Model BIT (2012), Art. 33; US-Republic of Korea FTA (2007), Art. 11.25(4) and
11.25(5); US-Singapore FTA (2003), Art. 15.24(4) and 15.24(5). The parties are free to
select a co-national, but the presiding arbitrator must not be a national of either party.
73. Most treaties stipulate that the Consolidation Tribunal be established and conduct its
proceedings under the UNCITRAL Arbitration Rules, likely to account for circumstances
where one or more of the disputing parties cannot meet the requirements of the ICSID
Convention (CPTPP (not yet in force)). This provision can be modified with consent of the
disputing parties (assuming jurisdiction otherwise exists) (EU-Singapore FTA (not yet in
force)).
74. Most treaties allow Consolidation Tribunals to assume jurisdiction over ‘all or part of the
claims’ or, alternatively, to ‘determine one or more of the claims if such determination
107
331
would assist in the resolution of others’ (EU-Singapore FTA (not yet in force); CPTPP (not
yet in force)).
75. These treaties usually give the Consolidation Tribunal power to stay the individual
proceedings pending a decision on consolidation.
76. As to the scope of consolidation, it may be full or partial. Some treaties also give the
Consolidation Tribunal the power to instruct a previously constituted tribunal to assume
jurisdiction over all or any part of the claim, provided that Tribunal is reconstituted with
the same composition except for the claimants’ appointee who shall be nominated by
agreement of all claimants or otherwise by the appointing authority (US Model BIT (2012),
Art. 33(6)(c); US-Uruguay BIT (2005), Art. 33(6)(c); US-Peru FTA (2006), Art.
10.25(6)(c); Nicaragua-Taiwan FTA, Art. 10.25(6)(c); US-Colombia FTA (2006), Art.
10.25(6)(c); Australia-Chile FTA (2008), Art. 10.26(6)(c); Colombia-Panama FTA (2013),
Art. 14.25(6)(c); New Zealand-Republic of Korea FTA, Art. 10.29(6)(c)).
77. Finally, most treaties allow a claimant not named in a consolidation request to apply to join
the consolidated proceedings.
VIII. CONSOLIDATION PROVISIONS IN ARBITRAL RULES
78. Some arbitral rules have adopted consolidation provisions or similar joinder provisions.
Article 31 of the CIETAC Investment Arbitration Rules includes a consolidation provision
which allows a party to request consolidation, the arbitral institution to appoint a
Consolidation Tribunal, and the Consolidation Tribunal to consolidate all or part of the
case or to decide one of the claims. It states:
Article 31 Consolidation of Arbitrations
1. Where two or more disputes have been submitted separately to

arbitration under these Rules involving common questions of law or
fact, and such disputes arise out of the same events or circumstances,
any party may submit a request to consolidate the arbitrations.
2. A party seeking consolidation of arbitrations shall submit in

writing such request to the IDSC or the CIETAC Hong Kong
Arbitration Center that administers the case, the arbitral tribunal and
all other parties, which shall specify: (a) the names and addresses of
all parties to the arbitrations; and (b) the facts and grounds on which
the consolidation request is based.
3. Where CIETAC considers the request for consolidation of

arbitrations is justified, it shall, within thirty (30) days from the date
of receipt of such request, constitute an arbitral tribunal pursuant to
Chapter III of these Rules unless otherwise agreed by all parties to
the arbitrations.
332
4. Where an arbitral tribunal constituted by virtue of this Article 31
is satisfied that two or more disputes submitted to arbitration involve
common questions of law or fact arising out of the same events or
circumstances, the arbitral tribunal may, in the interest of fair and
efficient resolution of the disputes, and after consultation with the
parties to the arbitrations, decide: (a) to consolidate the arbitrations
and to render the award on all or part of the claims; or (b) to hear
and render the award on one or more claims, but such award shall
be made in the belief that it would facilitate the resolution of the
other claim(s).
5. Where an arbitral tribunal constituted by virtue of this Article 31

has commenced to hear the consolidated arbitration, unless
otherwise determined by such arbitral tribunal, the original arbitral
tribunal of the cases before consolidation shall cease to have
jurisdiction over the claim(s) which the arbitral tribunal constituted
by virtue of Article 31 has assumed jurisdiction.
6. Upon application of a party, where an arbitral tribunal constituted

by virtue of this Article 31 makes a decision under Paragraph 4 of
this Article, the arbitral tribunal has the power to request that the
proceedings of the original arbitral tribunal be stayed, unless the
original arbitral tribunal has already suspended its proceedings.
79. Many commercial arbitration rules also include consolidation provisions. To the extent that
they are available for ISDS, they may offer a vehicle to consolidate investment cases. (see
e.g., Hong Kong International Arbitration Centre (HKIAC) Administered Arbitration
Rules (2013), Art. 28; International Centre for Dispute Resolution (ICDR) Arbitration
Rules (2014), Art.8; International Chamber of Commerce (ICC) Arbitration Rules (2017),
Art. 10; Stockholm Chamber of Commerce (SCC) Arbitration Rules (2017), Art. 15.).
80. Usually, these rules allow consolidation if the parties agree. In addition, they typically
allow a Tribunal or appointing authority to order consolidation where the claims are made
under the same arbitration agreement, or under different but compatible arbitration
agreements, if the arbitrations raise common questions of fact or law, and the relief arises
out of the same transaction or legal relationship.
81. As a general rule, either party can move for consolidation. There is no time limit but
progress of the proceedings and whether an arbitrator has been appointed must be
considered in assessing whether to consolidate. Under most rules, the institution itself
makes the decision. Few of these rules provide for the possibility of ordering a stay of the
proceedings pending a request for consolidation. Some rules also require the appointing
authority to consider whether consolidation would serve the expedition of the proceedings.
333
IX. COMMENTS RECEIVED BY ICSID
82. Several States and legal practitioners suggested an express rule on voluntary consolidation
given its prevalence in practice.
83. In addition, numerous States and some organizations suggested that the ICSID Rules adopt
a mandatory consolidation procedure along the lines of NAFTA Art. 1126. These
comments supported mandatory consolidation in accordance with criteria to be listed in the
rules. Some also suggested such a provision to expressly address procedural issues such as
how to ensure confidentiality in a consolidated case.
84. One State suggested that instead of consolidation, Tribunals ought to be given discretion
to stay cases raising the same facts or law pending decision on the first filed case, making
consolidation unnecessary. In fact, proposed AR 54 and (AF)AR 63 allow a Tribunal to
suspend the proceeding upon agreement of the parties, the request of a party or on its own
initiative. Presumably if parties to a proceeding agreed it should be stayed pending a
decision in a related proceeding, they could invoke the suspension rule.
X. OPTIONS FOR A MANDATORY CONSOLIDATION RULE
85. Any proposal on mandatory consolidation in the ICSID Rules will have to address a
number of considerations. The chart below lists the usual options for each of these
considerations.
HOW IS CONSENT TO • consent to consolidation is assumed from the fact of

CONSOLIDATION submitting the case under the ICSID Convention AR or
GIVEN? (AF)AR; or
• specific consent could be required for mandatory
consolidation
WHO CAN REQUEST • any disputing party may apply for consolidation order;
CONSOLIDATION? • some, but not necessarily all, disputing parties affected by
consolidation may apply jointly for a consolidation order;
or
• all disputing parties affected by consolidation must apply
jointly for a consolidation order
TIMING OF • at any time; or
APPLICATION • before Tribunal established in any case to be consolidated
CONTENTS OF • sent to SG of ICSID, appointing authority, President of

APPLICATION TO Court, or other person named to establish consolidation
CONSOLIDATE Tribunal;
• in writing;
• identify applicant(s), relevant cases, relevant facts, basis
for consolidation and order requested;
• provided to parties in all cases sought to be consolidated
and includes their contact information
334
WHAT IS THE TEST • question of law or fact in common;
FOR CONSOLIDATION? • arise out of same events;
(CRITERIA CAN BE • in the interest of fair and efficient resolution of the claims;
CUMULATIVE OR • relate to same investment;
INDIVIDUAL) • consolidation will not cause serious harm to any party
affected by consolidation order;
• potential for inconsistent awards exists absent
consolidation; and/or
• potential for double recovery exists absent consolidation
SCREENING POWER • no screening powers;
FOR CONSOLIDATION • SG or authority appointing for Consolidation Tribunal may
APPLICATION screen application for consolidation – can refuse if
application is manifestly unfounded or does not meet test
CONSTITUTING A • Could identify a person to make the decision and not have
TRIBUNAL TO DECIDE consolidating Tribunal (e.g.: SG of ICSID, Appointing
WHETHER TO Authority; President of ICJ)
CONSOLIDATE • If a Tribunal, consider:
• Standing or ad hoc;
• Number - one or three persons;
• Nationality – may require they have different nationality
than disputing parties, that only President of Tribunal
have different nationality than all parties, or allow them
to share nationality of any party;
• Appointed by: – could be by SG of ICSID or other
appointing authority, parties jointly, each party appoints
an arbitrator and appointing authority appoints President;
ensure appointing authority can appoint in default of
party appointment or party agreement
• Source of Arbitrators – anyone, ICSID Panel of
Arbitrators, ICSID Panels of Arbitrators and
Conciliators, another roster;
• Time for Decision – decide within XX days
PROCESS OF • Allow all parties to make submissions in writing, orally, or
CONSOLIDATING both;
TRIBUNAL • Time within which to require submissions and hearing
POWER OF • Decide on consolidation within X days;

CONSOLIDATING • Stay cases subject to consolidation order until decision to
TRIBUNAL consolidate made;
• Order full or partial consolidation – if partial, determine
which aspects are to be consolidated;
• Assume jurisdiction over and decide claims in full (with
resignation of Tribunals in pending cases);
335
• Assume jurisdiction over and decide consolidated portion
of claims (automatic stay of other Tribunals with respect
to consolidated portion);
• Instruct one of Tribunals previously seized of a case to
assume jurisdiction over consolidated cases (require
consolidated claimants to name claimant nominee jointly,
if any);
• Order a single case to proceed and stay related cases
pending determination; and/or
• Issue a reasoned decision on consolidation within X days
of last written or oral submission, or issue a
consolidation order without reasons
ARBITRAL RULES • Applicable rules if all cases were commenced under the
APPLICABLE TO same rules;
CONSOLIDATING • Combination of rules agreed to by parties in cases to be
TRIBUNAL consolidated;
• Additional Facility Rules;
• UNCITRAL Rules
• Consider which can be consolidated or coordinate
(jurisdiction issue)
APPOINTMENT OF • Number - one or three persons;
TRIBUNAL TO DECIDE • Nationality – may require arbitrators have different
CONSOLIDATED CASE nationality than disputing parties, that only President of
Tribunal have different nationality than all parties, or
allow them to share nationality of any party;
• Appointed by: - SG or other appointing authority, parties
jointly, each party appoints an arbitrator and appointing
authority appoints President; ensure appointing authority
can appoint in default of party appointment or party
agreement;
• Timing – appointment within X days of consolidation
order;
• Rules Applicable – as above: applicable rules if all cases
commenced under the same rules, rules agreed to by
parties, AF rules, UNCITRAL rules
SUBSEQUENT • Party can apply to join consolidated portion of claim at any
ADDITION OF PARTIES time – must prove it meets test for consolidation and that
TO CONSOLIDATED its addition would not disrupt consolidated claim
CLAIM
86. The following is a potential consolidation provision for discussion. This example provides:
336
• Consolidation under a single set of rules, rather than multiple rules. This is to ensure
there is consent to the consolidation, given that it would be ordered on a mandatory
basis (paragraph 1);
• A tripartite test for consolidating, looking at whether the cases arise out of the same
circumstances, share a common question of law or fact, and would provide for a
fair and efficient resolution of cases (paragraph 2);
• Is initiated by written request to Secretary-General with necessary information

(paragraph 3);
• Secretary-General sends application to all affected parties and gives them 45 days
to make submissions (paragraph 4);
• Secretary-General also sends application to affected Tribunals – this is so they can

consider a stay or other relevant scheduling matters (paragraph 5);
• A single arbitrator is selected – this is intended to reduce cost (paragraph 6).
Rule 38BIS
Consolidation by Order
(1) A party may request full or partial consolidation of two or more arbitrations (“the
individual arbitrations”) pending under the ICSID Convention Arbitration Rules.
(2) The individual arbitrations proposed for consolidation shall:
(a) arise out of the same circumstances;
(b) have a question of law or fact in common; and
(c) if consolidated, promote a fair and efficient resolution of all or any of the claims
asserted in the individual arbitrations.
(3) A party requesting consolidation shall file a written request with the Secretary-General
specifying:
(a) the arbitrations proposed for consolidation;
(b) the grounds for consolidation;
(c) the relevant facts and evidence relied on, attaching supporting documents;
(d) observations on why consolidation is warranted; and
(e) the terms of consolidation sought in the order.
337
(4) The Secretary-General shall transmit the request for consolidation referred to in
paragraph (1) to all parties named in the request and invite them to:
(a) submit their observations on the request with any supporting documents within 45
days after the date of receipt of the request; and
(b) indicate whether a hearing is requested or whether they consent to the order being
made on the basis of the written submissions filed.
(5) The Secretary-General shall also transmit a copy of the request for consolidation to all
arbitrators appointed in the individual arbitrations.
(6) The request for consolidation shall be decided by a single Consolidating Arbitrator who
shall:
(a) be selected by the Secretary-General from the ICSID Panel of Arbitrators, after
consulting as far as possible with the parties named in the request for consolidation;
(b) not have the nationality of any of the parties to the individual arbitrations;
(c) not be appointed in any of the individual arbitrations;
(d) be appointed as soon as possible, and no later than 60 days after the Secretary-
General receives the request for consolidation referred to in paragraph (3); and
(e) set a date for a hearing on the request for consolidation, if required, to take place no
later than 30 days after the Consolidating Arbitrator accepts the appointment.
(7) Pending the order on consolidation, each arbitration sought to be consolidated may be
suspended by the Tribunal established for that individual arbitration, or suspended by
the Secretary-General if no Tribunal has been constituted for the individual arbitration.
(8) The Consolidating Arbitrator may order consolidation of the individual arbitrations in
full or in part, or may reject the request for consolidation. The Consolidating Arbitrator
shall give brief reasons for the order within 45 days after the last written or oral
submissions.
(9) If the Consolidating Arbitrator orders consolidation in full, the Tribunals constituted to
hear the individual arbitrations shall be deemed discontinued pursuant to AR 53. If the
Consolidating Arbitrator orders consolidation in part, the Tribunals constituted to hear
the individual arbitrations shall continue only with respect to those parts that were not
consolidated.
(10) If the Consolidating Arbitrator orders consolidation in full or in part, a Tribunal

shall be constituted to hear and decide the Consolidated Arbitration.
(11) The Tribunal for the Consolidated Arbitration shall consist of three members,
with one selected by the claimants jointly, one selected by the respondents jointly, and
338
the Presiding arbitrator selected by agreement of the claimants and the respondent. If the
Tribunal for the Consolidated Arbitration has not been constituted within 45 days after
dispatch of the order on consolidation, the Chairman shall appoint the arbitrators not yet
appointed in accordance with the procedure in AR 25.
(12) The Tribunal for the Consolidated Arbitration may consider requests by other
parties to join the Consolidated Arbitration. In so doing, the Tribunal shall consider the
stage of the proceedings, the costs incurred to date by the existing parties, and whether
the criteria referred to in paragraph (2) are met.
XI. NOTE ON CLASS CLAIMS
87. Several comments from States and the public suggested the creation of rules for class
claims in ISDS. The concept of a class claim derives from class actions, where a group of
representative claimants is certified to pursue litigation on behalf of all people similarly
affected by the measure in question. This results in a single or few claimants, a single set
of counsel and a single proceeding, but the outcome benefits the entire class of affected
persons. As a result, it avoids multiple separate claims addressing the same conduct.
88. Class actions are available in numerous jurisdictions, including the U.S., Canada,
Australia, New Zealand, Chile, and various European States. However, class actions are
not available in the domestic jurisdictions of many ICSID member States. As a result, the
proposed amendments to the Rules do not currently address this possibility.
339

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COLUMBIA LAW SCHOOL

L9061 Practicum in International

WEEK 5: Applicable Law; Conditions Precedent and Preliminary Issues

WEEK 6: Interim Measures

WEEK 7: Confidentiality and Participation by AMICUS

WEEK 8: Multi-Party and Class Arbitration

2. ICDR Arbitration Rules, Art. 28

3. ICSID Convention, Art. 42

5. SCC Rules, Art. 22

6. SIAC Rules, Rules, 25, 27

7. LCIA Rules, Art. 23

8. UNCITRAL Model Law, Art. 16

9. UNCITRAL Rules, Art. 23

Chapter 13: Choice of Substantive Law in

Gary B. Born, Gary B. Born

As discussed above, it is important to distinguish several different

In considering the choice of substantive law it is essential to

choice-of-law agreement and the tribunal must select the

§13.01. Arbitral Tribunal's Authority to Select Applicable

Absent contrary agreement, arbitrators generally possess broad

[A]. National Arbitration Legislation

National arbitration legislation generally provides that arbitral

In most jurisdictions, the arbitrators' choice of substantive law is

[B]. Institutional Arbitration Rules

Institutional rules generally parallel national arbitration legislation in

§13.02. Choice of Substantive Law in Absence of Agreement on

In some cases, the parties to an international dispute will not have

[A]. Choice of Substantive Law under National Arbitration

Arbitration statutes take differing approaches to selection of the

Basic Choice-of-Law Approaches

Second, some legislation imposes specialized choice-of-law rules on

Third, some statutes authorize arbitrators to apply the choice-of-law

Arbitration Act, 1996, is similar, providing in §46(3) that: “[i]f or to the

Fourth, some legislation grants tribunals the power “directly” to apply

Finally, and exceptionally, a nation's law may dictate that particular

[B]. Choice of Substantive Law under Institutional Arbitration

Institutional rules generally grant the arbitrators broad freedom in

In contrast, most institutional rules permit the tribunal to apply

Finally, a few sets of institutional rules require the arbitrators to

[C]. Relationship between Institutional Arbitration Rules and

As discussed above, some arbitration legislation provides a

The resolution of this issue is in the first instance a question of

[D]. Choice-of-Law Rules Applied by Arbitral Tribunals in

Within the foregoing legal framework, arbitral tribunals must make

In some cases, those sources may provide relatively clear guidance

[1]. Choice-of-Law Rules of Arbitral Seat

This approach derives from historic views of international arbitration,

A comparable, but distinct, view was taken in the United States,

The traditional view that the seat's choice-of-law or substantive law

[2]. Choice-of-Law Rules that Arbitral Tribunal Considers

As discussed above, Article 28(2) of the UNCITRAL Model Law and

The arbitrators' freedom to select the “appropriate” conflicts rule

In many cases, for reasons discussed elsewhere, the law of the

[3]. “Cumulative” Application of Choice-of-Law Rules

Arbitrators sometimes apply the conflicts rules of each of the states

[4]. Application of Substantive Law of State with Closest

As discussed above, some arbitration legislation prescribes a

[5]. Choice-of-Law Rules of the State Most Closely Connected

Another approach applied by arbitral tribunals is selecting the

[6]. “International” Choice-of-Law Rules

Some arbitral decisions derive choice-of-law rules from non-national

comport well with the objectives that lead parties to agree to

[M]uch [is] to be said in favour of adopting generally

Regrettably, however, there is as yet no such body of international