The power of an arbitral tribunal to grant interim relief has not been free from controversy. A particular difficulty arises in more complicated cases, where the jurisdiction of the tribunal itself is uncertain. When a challenge has been made to the jurisdiction of the tribunal, can it decide upon granting interim measures prior to deciding on its jurisdiction? Of course, it will be desirable for issues of jurisdiction to be sorted out first – often, however, to rule on jurisdiction will require a complex legal analysis by the tribunal. Interim measures are most likely to be asked for in urgent cases; in such cases, waiting for a complex analysis of jurisdiction may well defeat the purpose of asking for interim injunctions. On the other hand, one may very well wonder how a tribunal can have the power to grant any relief at all – whether interim or not – without first determining its own jurisdiction.
The ICSID Tribunal recently touched upon this issue – which is one of considerable commercial significance – in its decision on provisional measures in Occident Petroleum v.
Additionally, the Tribunal also laid down the test for grant of provisional measures – circumstances in which provisional measures will be granted are those in which the measures are necessary to preserve a party’s rights, and where the need is urgent in order to avoid irreparable injury (underlining present in original text of decision).
It might appear that this test makes a grant of an interim injunction by an arbitral tribunal more likely than a grant of an interim injunction by a Court. The test proposed by the Tribunal only looks at the (a) existence of prima facie jurisdiction, (b) the necessity of the interim measure from the point of view of preserving a party’s rights. This necessity may be measured by reference to the urgency of the need to avoid irreparable injury. Under common law principles dealing with the issuing of interim injunctions, Courts have to consider the factors of (a) the existence of a prima facie case (as opposed to a prima facie satisfaction of jurisdiction), (b) irreparable injury and (c) balance of convenience. While the requirement of balance of convenience may be factored in to the need and the urgency (although even this is unclear), it is at least arguable that the ICSID has moved away from the common law requirement of a prima facie case.
It remains to be seen whether this decision will affect the practice of other arbitral institutions.