Interim measures: Align China’s arbitration with the world

By David Jia Hongwei, Longan Law Firm
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The Convention of the Recognition and Enforcement of Foreign Arbitration Awards has laid a foundation for the legal framework in the international arbitration field. However, it failed to include any provision relating to interim measures.

The system of interim measures is elaborated later in the UNCITRAL Model Law on International Commercial Arbitration formulated by the United Nations Commission on International Trade Law (UNCITRAL), and is approved and supported by the laws and arbitration bodies in most counties.

Interim Measures
David Jia Hongwei
Senior Partner
Longan Law Firm

Although property and evidence preservation are provided for in the existing Arbitration Law, the power to enforce such measures has not been delegated to arbitration institutions and tribunals. In addition, the existing Arbitration Law has failed to stipulate other interim measures required by arbitration procedures, and to establish the relevant supporting mechanism. These factors have restricted the development of arbitration in China.

In the field of international arbitration, interim measures normally refer to the rulings or orders that intend to protect a party’s or both parties’ interests from being harmed. In practice, it is not uncommon for an arbitral tribunal to issue orders or awards to enforce interim measures, based on the application of interested parties.

According to statistics, the London Court of International Arbitration received 67 interim remedy applications in 2018, of which 23 were granted, 26 were refused, and 18 were replaced, cancelled or under examination by the end of 2018. The Hong Kong International Arbitration Centre received three emergency arbitrator applications in 2018 (13 in total so far), all of which were accepted and handed over to emergency arbitrators to issue emergency rulings.

The Convention of the Recognition and Enforcement of Foreign Arbitration Awards, which laid a foundation for the legal framework in the international arbitration field, failed to provide a system of interim measures. The interim measures in arbitration proceedings are clearly stipulated in article 17 of the UNCITRAL Model Law on International Commercial Arbitration.

Moreover, the conditions to approve interim measures, as well as the enforcement and refusal of interim measures and the basis for allowing the enforcement, are specified in provisions A-J of article 17. It is the international law foundation regarding interim measures provided in the UNCITRAL Model Law on International Commercial Arbitration that enables the thriving development of the interim measures system in the arbitration laws and rules of arbitration bodies in various countries and regions.

In practice, interim measures serve as an important means of ensuring impartial and effective arbitration awards by arbitration tribunals, and they are widely acknowledged by most countries, regions and arbitration bodies. This system already plays a critical role in practice.

Although the interim measures system in the field of international arbitration in China is undergoing rapid development, arbitration commissions/tribunals do not have the authority to issue interim measures. In addition, the scope of interim measures provided in China is too narrow, and there is the lack of a mechanism to support the interim measures. Since there is still a gap between the arbitration practices in China and that in the rest of the world, the author has some suggestions.

First, arbitration bodies and tribunals should be entitled to exercise interim measures, and the conditions and procedures allowing such measures should be made clear. After more than 20 years of development China’s arbitration system has witnessed impressive progress, which can be reflected in the number and quality of arbitration bodies, the competence and proficiency of arbitrators, and the positive role played by arbitration in handling social disputes.

In recent years, in particular, as China and the Supreme People’s Court announced a series of measures to support the development of arbitration, many obstacles to the conducting of arbitration tribunals and the examination and enforcement by courts have been removed, which demonstrates the vitality and potential of arbitration in handling social disputes in China.

Therefore, it will effectively promote the continuous development of China’s arbitration cause and its alignment with the practices in the international community by referring to the UNCITRAL Model Law on International Commercial Arbitration and the legislative experience of most countries, thus empowering arbitration bodies and tribunals to exercise interim measures, and specifying the conditions and procedures allowing such measures in the amended Arbitration Law.

Second, some examples of the types of interim measures that can be exercised by arbitration bodies and tribunals should be given. In practice, there is a wide range of interim measures in international arbitration. However, no matter what the exact means are, maintaining the status quo, behaviour preservation, property preservation and evidence preservation are the four commonly acknowledged forms of preservation measures deemed appropriate by arbitration tribunals and different legislations.

Articles 81 and 100 of the Civil Procedural Law show that China admits the above four types of preservation measures. Therefore, it is imperative to ensure that the provisions regarding interim measures in the future amendment to the Arbitration Law are in accordance with the provisions in the Civil Procedural Law.

Third, the mechanism supporting the interim measures should be improved. The fact that Hong Kong has become a popular place of arbitration for resolving international commercial disputes should be attributed not only to its exceptional judicial environment but also to its sound supporting mechanism relating to interim measures, which derives from the UNCITRAL Model Law on International Commercial Arbitration.

Given the shortages and differences in domestic laws, the UNCITRAL Model Law on International Commercial Arbitration demonstrates a special legal system that meets the demand of international commercial arbitration. Therefore, establishing and improving the supporting mechanism that is consistent with the relevant provisions regarding interim measures in the UNCITRAL Model Law on International Commercial Arbitration and aligned with the international standard will not only help Chinese arbitration bodies to compete with overseas arbitration bodies on an equal footing, but also help China play a greater role in the field of international arbitration.

David Jia Hongwei is a senior partner at Longan Law Firm. He can be contacted on +86 136 0256 7671 or by email at [email protected]