by Johan Van Der Wath (Associate) & Danielle Giannico (Candidate Attorney)
Interim measures were introduced in the 2018 Rules of the Association of Arbitrators (“the Rules”). What is meant by an interim measure, is an award made by an arbitrator which can be made at any time before the final award is made and its intended effect should be temporary in nature pending a final award.
What the interim measures can be (final relief)
An award of an interim measure can be sought in several circumstances. The first being where the intention of the party seeking the interim relief is to restore or maintain the status quo. An interim measure can also be sought where a party is threatening to act in a manner that will cause imminent harm or in a manner that will prejudice the arbitration process itself. An arbitrator can also make an order to preserve assets from which a final award can be satisfied, to preserve relevant evidence or requiring that a party provide security for costs.
The list provided for in Article 26 of the Rules, is by no means a closed one and makes provision for a wide array of interim measures.. The effect of such a wide ambit is that what is sought under the guise of an interim measure might amount to final relief.
What evidence must be presented and in what manner
A party seeking interim relief must satisfy an arbitral tribunal that harm is being imminently threatened and that the impending harm cannot be made good by an award of damages at a later stage. It must further be shown that the immediate harm which may occur outweighs any harm which may be suffered by the party against whom the interim measure is sought. The part seeking the interim relief also has to show that their case is likely to succeed on the merits thereof during the main proceedings
The Rules in its current format are silent as to the procedure that should be followed when making application for an interim measure to an arbitral tribunal. This situation creates uncertainty for both the arbitrator and the parties to the proceedings.
Arbitration Act does not allow parties to enforce interim measures
It is important to note that the Arbitration Act makes no direct mention as to how a party to the arbitration proceedings is to enforce an interim ruling save to include “interim award” in the definition of “Award”. Case law strongly suggests that for a court to enforce the award of an Arbitral Tribunal it must be its final award[1]. The Rules clearly state that a tribunal may amend, terminate or suspend any interim measure which it has previously awarded. The implication is that an interim measure will not be enforced by our courts as it does not amount to an award which is final in nature.
In light of the above the inclusion of Article 26 in the Rules becomes senseless absent an amendment of the Arbitration Act clarifying that an interim measure can be enforced by the court.
Situation regarding International Arbitration Act
The wording used in the Rules closely follows the wording in Article 17 of the UNCITRAL Model law regarding International arbitration. This Model law was ratified and made law in the Republic through the enactment of the International Arbitration Act 15 of 2017. The purpose of this Act was to bring South African domestic law in line with the international norm regarding international arbitration. This Act will be applicable should an international commercial dispute have South Africa as its seat of arbitration.
The International Arbitration Act, unlike the Arbitration Act which applies to domestic arbitrations, makes specific provision for a party who has received an award which amounts to an interim measure to apply to a court to have it made an order of court, so as to enforce the interim award against the opposing party.
Conclusion
The International Arbitration Act will only apply where the dispute relates to a commercial matter and one, or both, of the parties to the proceedings is not domiciled in South Africa. All other arbitrations are subject to the Arbitration Act and in terms of this Act the enforcement of an interim award by a court is still bound to the current judicial precedent, being that for an award of an Arbitral tribunal to be enforceable it must be a final award.
[1] Els trading as DUP Meyer Building Contractors v P Ranchhod Family Trust; In re: P Ranchhod Family Trust v Kay and Another (5366/2016) [2017] ZAECGHC 64 (25 May 2017)
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