For international disputes, arbitration is frequently the preferred method of dispute resolution chosen by parties. In other words, parties usually seek to resolve their disputes in a neutral forum, outside state courts, by appointing a private person who will adjudicate their dispute in a binding and final manner.

It is widely recognised in many jurisdictions around the world that those arbitrators appointed by the parties have the power to grant interim relief decisions in order, for example, to preserve the status quo, while the arbitrators take a decision on the merits of the underlying dispute. However, considering that the constitution of an arbitral tribunal may take many weeks (sometimes even months), there may be a wait between the time a dispute arises and the constitution of the arbitral tribunal. During that period, the only solution for a party in need of an interim relief used to be to seek the assistance of national courts.

Indeed, many countries recognise that a party is entitled to seek interim relief before national courts, even if the relevant agreement contains an arbitration clause. It is generally recognised that recourse to state courts for interim relief constitutes neither a breach nor a waiver of the arbitration agreement. In this scenario, once the arbitral tribunal is constituted, it will have the power to uphold, overturn or modify measures previously decided by national courts.

Jan-Mar 2017 issue

Pinheiro Neto Advogados