The Interim Measure
You are the sole arbitrator in a distribution dispute seated in a civil-law jurisdiction whose arbitration statute is based on the UNCITRAL Model Law. The claimant distributes the respondent's products under a five-year agreement. The respondent has given 30 days' notice of termination, alleging repeated late payment. The claimant says the termination is invalid because the contract requires a 60-day cure notice, and applies to you for an interim measure ordering the respondent to continue supplying goods pending the final award. The respondent argues that (i) you have no power to grant interim relief because the arbitration clause is silent on it, (ii) the claimant should apply to the court instead, and (iii) in any event the measure would compel performance of the very contract in dispute. The claimant offers an undertaking as to damages and can post security.
1. Does the tribunal have power to grant the measure? Address the silence of the arbitration clause and the relationship with court-ordered relief.
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Yes, the tribunal has power. Under a Model Law statute, the arbitral tribunal may, unless the parties have agreed otherwise, grant interim measures at the request of a party. The power is a default rule supplied by the statute; it does not need to be conferred by the arbitration clause. Silence in the clause is therefore not a bar. The respondent's first argument confuses the source of the power: it comes from the law of the seat, not from the parties' contract.
The respondent's second argument also fails. The availability of court-ordered relief does not displace the tribunal's power; the two are concurrent. A party may apply to a court for interim measures, and that application is not incompatible with the arbitration agreement. The tribunal should nonetheless consider whether the court is better placed: if the measure requires enforcement against third parties, or if speed is critical and the tribunal cannot convene in time, a court application may be the practical route. Here, the tribunal is constituted and can act quickly, so it should not defer.
The tribunal should confirm that the parties have not agreed to exclude its interim-measures power, check the institutional rules for any additional requirements, and record its conclusion on power in the order itself.
2. Apply the substantive conditions for an interim measure to these facts. Would you grant the order?
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The conditions are cumulative: a harm not adequately reparable by damages, a balance of convenience favouring the measure, and a reasonable possibility that the claimant will succeed on the merits. Some statutes add urgency and proportionality.
Harm not adequately reparable: if supply stops, the claimant's distribution network and customer relationships may collapse within weeks, and damages would be difficult to quantify and slow to recover. This condition is likely satisfied, though the claimant should particularise the harm rather than assert it generally.
Balance of convenience: the measure compels the respondent to keep supplying a party it says is in default. That is a real burden. But the claimant offers an undertaking as to damages and can post security, which protects the respondent if the claimant ultimately loses. The balance favours preserving the status quo until the merits are decided, provided the order is time-limited and the claimant pays promptly.
Merits: the claimant has a reasonable possibility of success if the 60-day cure notice was contractually required and was not given. The tribunal need not decide the point, only satisfy itself that the claim is not fanciful.
Conclusion: grant a time-limited order requiring continued supply on the existing terms until the final award or further order, conditional on security and an undertaking, and on prompt payment for goods supplied.
3. The respondent says the order would compel performance of the disputed contract. How do you address that objection in the order?
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The objection has force but is not decisive. An interim measure that preserves the status quo pending the award is different from a final order of specific performance. The tribunal is not deciding that the contract subsists; it is preventing irreparable harm while it decides whether it does. The order should say so expressly.
Three drafting safeguards address the objection. First, the order should be expressly without prejudice to the final determination of the validity of the termination, and should state that it creates no presumption either way. Second, it should be time-limited: until the final award or further order, with a review date, so that it cannot operate as a back-door permanent remedy. Third, it should preserve the respondent's rights: the respondent may apply to vary or discharge on changed circumstances, and the order should record that continued supply is without prejudice to the respondent's claim for sums allegedly due.
The tribunal should also weigh proportionality. If the respondent can show that continued supply would expose it to irrecoverable credit risk, the tribunal may fashion a narrower order, such as supply against prepayment or a reduced volume. The order should give reasons on each condition, because interim measures are frequently challenged and a reasoned order is far more robust.