A comprehensive guide to interim relief in international arbitration, covering the allocation of powers between the arbitrator and the court under Article 6 of the Turkish International Arbitration Act and Article 414 of the Civil Procedure Code, interim injunctions, interim attachment, the taking of evidence, the emergency arbitrator, the ISTAC rules and the enforcement of interim measures.
In the resolution of international commercial disputes through arbitration, the protection of the parties' rights and of the values in dispute during the period until the final arbitral award is of great importance. Arbitration proceedings may last months or even years; during this period the other party's dissipation of its assets, the loss of evidence or the disposal of the property in dispute may render the final award ineffective. It is against these risks that interim measures of protection come into play. Interim relief in international arbitration is a system of protection that may be provided both by the arbitrator or arbitral tribunal and by the state courts, and that covers interim injunctions, interim attachment and the taking of evidence. This article comprehensively examines interim injunctions, the taking of evidence, the institution of the emergency arbitrator, the allocation of powers between the arbitrator and the court, and the enforcement of interim measures in international arbitration, within the framework of the International Arbitration Act No. 4686 and the relevant rules.
1. The Concept of Interim Relief and Its Function in Arbitration
Interim relief is an institution of protection of a provisional nature ensuring the protection of the right or the assets in dispute during the period until the final decision is rendered. The function of this institution in arbitration is in essence the same as its function in state justice; however, owing to the special structure of arbitration it shows significant differences in practice. Interim measures of protection appear principally in three forms. The interim injunction ensures the protection of the existing situation of the right or thing in dispute. Interim attachment is a measure directed at securing monetary claims. The taking of evidence, on the other hand, ensures that evidence liable to be lost or altered in the future is established beforehand. The contractual structure of arbitration, resting on the will of the parties, requires that interim measures of protection too be applied in a manner conforming to that will. However, the fact that arbitrators cannot use the power of the state, that is, do not have the power of compulsory execution, constitutes the most fundamental problem of interim relief in arbitration. For this reason, interim relief in arbitration necessitates a cooperation between the arbitrator and the state court.
2. The Framework of the International Arbitration Act and Its Field of Application
In Turkish law, international arbitration is regulated by the International Arbitration Act No. 4686; domestic arbitration, on the other hand, is subject to the provisions of the Civil Procedure Code No. 6100. The regime to which arbitration proceedings will be subject is determined according to whether the dispute carries a foreign element and according to where the seat of arbitration is. The International Arbitration Act applies to disputes that carry a foreign element and where the seat of arbitration is determined as Türkiye; the parties may also agree that the Act will apply. As regards interim relief, Article 6 of the International Arbitration Act is of central importance. This article expressly provides that requesting an interim injunction or interim attachment from the court before or during the arbitration proceedings does not constitute a breach of the arbitration agreement. Thus the legislator has secured the possibility for the parties to request interim protection from the state court despite the existence of the arbitration agreement. The correct determination of the applicable regime is the most important assessment to be made at the outset of the process, as regards the determination both of the competent authority and of the procedure to be followed.
3. The Power of the Arbitrator or Arbitral Tribunal to Grant Interim Relief
That the arbitrator or arbitral tribunal may order interim measures of protection during the arbitration proceedings is a principle accepted by modern arbitration law. The relevant provision of the Civil Procedure Code provides that, unless otherwise agreed, during the arbitration proceedings the arbitrator or arbitral tribunal may, upon the request of one of the parties, order that an interim injunction be taken or that evidence be established. The International Arbitration Act likewise accepts the arbitrator's power to grant interim relief. However, there is an important limit to this power of the arbitrator; the arbitrator may not order measures that bind third parties or that require the use of the power of the state. For example, an arbitrator may not directly cause the application of measures requiring compulsory execution, such as the entry of an annotation in the land registry or the actual attachment of property. The interim measure ordered by the arbitrator is binding between the parties; however, where one of the parties does not comply with it, the support of the court is required for the measure to be carried out. This situation arises from the contractual basis of the arbitrator's power and from its lack of the power of the state.
4. The Court's Power to Grant Interim Relief and the Allocation of Powers
The International Arbitration Act reserves the power of the state courts to grant interim relief despite the existence of the arbitration agreement. One of the parties may request an interim injunction or interim attachment from the court before or during the arbitration proceedings, and the court's giving of such a decision does not constitute a breach of the arbitration agreement. This regulation establishes an allocation of powers between the arbitrator and the court. At the stage where the arbitral tribunal has not yet been constituted, or in situations requiring compulsory execution, the support of the court is indispensable; by contrast, after the tribunal has been constituted, the parties tend, in conformity with their will to keep the dispute away from state justice, to request interim relief primarily from the arbitrator. An important consequence of this allocation of powers is that recourse to the court does not amount to a waiver of the arbitration agreement. A party, in applying to the court for interim relief, is not deemed to have renounced its will to arbitrate. This principle makes it possible for the parties both to benefit from the advantages of arbitration and to obtain effective protection in urgent situations.
5. The Conditions for an Interim Injunction
For interim measures of protection to be ordered, certain conditions must be satisfied. The basic condition sought as regards an interim injunction is the probability that, owing to a change that may occur in the existing situation, the obtaining of the right will become significantly more difficult or wholly impossible, or that an inconvenience or serious harm will arise owing to delay. The party making the request must prove, approximately, the existence of the right forming the basis of the measure; this is not full proof, but the demonstration of the probable existence of the right. In the arbitration context these conditions are assessed in a similar manner both before the arbitral tribunal and before the court. Moreover, the party requesting an interim injunction may be required to provide security to cover the harm that the other party may suffer should the request prove unjustified. The amount and type of the security are determined according to the characteristics of the concrete case. The meticulous assessment of these conditions is important both for the prevention of unjustified requests for measures and for the securing of interests genuinely worthy of protection.
6. The Taking of Evidence
The taking of evidence is an institution of interim relief ensuring that evidence to be used in an action to be brought or already pending, or in arbitration proceedings, is established beforehand against the probability of its loss or alteration. The taking of evidence is of particular importance in arbitration proceedings; because, as time passes over the events in dispute, evidence may be lost, the memory of witnesses may weaken, or material evidence may change. The Civil Procedure Code expressly provides that during the arbitration proceedings the arbitrator or arbitral tribunal may order the taking of evidence. However, at the stage where the arbitral tribunal has not yet been constituted, or in situations where the tribunal is unable to act in time or effectively, one of the parties may apply directly to the court for the taking of evidence. This possibility provides a critical safeguard as regards the protection of evidence. Particularly in technical disputes such as construction, shipbuilding and machine manufacturing, the establishment, through an expert, of the existing situation of a place or property may constitute decisive evidence in the later arbitration proceedings. The taking of evidence in time and in due form is an important part of the arbitration strategy.
7. The Institution of the Emergency Arbitrator
The emergency arbitrator is an arbitrator appointed to decide urgent requests for interim relief arising before the arbitral tribunal has been constituted. In arbitration proceedings the constitution of the arbitral tribunal takes time; the urgent protection needs that may arise during this period could, classically, be met only by recourse to the state court. However, since the parties, by choosing arbitration, aim to adopt a process independent of state justice, they prefer, as regards interim protection too, to remain within the framework of arbitration as far as possible. It is precisely to meet this need that the institution of the emergency arbitrator has been developed. In Turkish law, neither the International Arbitration Act nor the Civil Procedure Code contains a direct regulation concerning the emergency arbitrator. However, this institution has entered Turkish arbitration practice through the rules of institutional arbitration centres such as the Istanbul Arbitration Centre and the International Chamber of Commerce. Where the parties choose an institutional arbitration rule, the emergency arbitrator mechanism provided for by that rule becomes applicable. This institution, by providing urgent protection without waiting for the constitution of the tribunal, significantly increases the effectiveness of arbitration.
8. The Emergency Arbitrator in ISTAC and Institutional Arbitration
The rules of the Istanbul Arbitration Centre offer a structure that expressly regulates the emergency arbitrator mechanism. Under these rules, a party in need of an urgent interim measure of protection before the arbitral tribunal is constituted may apply to the centre for the appointment of an emergency arbitrator. The emergency arbitrator is appointed within a short period and decides the request swiftly. This mechanism enables the parties to remain within the framework of arbitration without having to apply to the state court for urgent protection. The rules of the International Chamber of Commerce likewise contain a similar emergency arbitrator regulation. Since these regulations of the institutional arbitration rules become part of the arbitration agreement, they are binding between the parties. The nature and enforceability of the decision rendered by the emergency arbitrator are, on the other hand, debated in the doctrine; whether these decisions may be characterised as arbitral awards and therefore be subject to the enforcement regime is a matter that must be dwelt upon. Nevertheless, the institution of the emergency arbitrator is an important tool, increasingly widespread in international arbitration practice, that meets the parties' need for urgent protection within arbitration.
9. Pre-Arbitration Court Measures and the Preservation of the Time Limit
The urgent protection needs arising before the arbitration proceedings have yet begun are most often met by recourse to the court. The International Arbitration Act expressly permits the requesting of an interim injunction or interim attachment from the court before the arbitration proceedings. However, an important procedural requirement arises in this case; the party that obtains a pre-arbitration measure from the court must commence the arbitration proceedings within a certain period. If arbitration is not commenced within this period, the measure obtained may lapse of itself. This regulation ensures that interim protection is used in accordance with its purpose and prevents the measure from being used against the other party indefinitely. A pre-arbitration court measure is of vital importance particularly in situations where the risk of the other party dissipating its assets is high or where evidence must be urgently protected. Acting correctly and swiftly at this stage directly affects the effectiveness of the final outcome of the arbitration proceedings. The commencement of the arbitration process in time after the measure has been obtained is an obligation that must not be neglected as regards the protection of rights.
10. The Fate of the Court Measure during the Arbitration Process
The fate of the interim injunction or interim attachment decision rendered by the court before or during the arbitration proceedings is important as the arbitration process advances. The International Arbitration Act provides that the interim injunction or interim attachment decision rendered by the court lapses of itself upon the arbitrator's or arbitral tribunal's award becoming enforceable, or where the action is dismissed by the arbitrator or arbitral tribunal. This provision establishes the relationship between the court measure and the arbitration proceedings. The interim protection granted by the court preserves its validity until the arbitration process is concluded; however, when the final arbitral award acquires enforceability or the action is dismissed, the measure lapses of itself, as there is no longer any need for interim protection. An important aspect of this regulation is that the measure granted by the court cannot be removed by the arbitral tribunal; the measure ends only upon the occurrence of the cases provided for in the law. This mechanism ensures that interim protection continues to exist stably throughout the arbitration process, while also preventing the continuation of an unnecessary measure at the end of the process.
11. The Enforcement of the Arbitrator's Measure and the Support of the Court
The most fundamental problem of the interim measure granted by the arbitrator or arbitral tribunal is its enforceability. Since the arbitrator cannot use the power of the state, the measure it grants cannot of itself be made the subject of compulsory execution. Where one of the parties does not voluntarily comply with this decision, which is binding between the parties, the support of the court is required for the decision to be carried out. The International Arbitration Act provides that, where one of the parties does not comply with the interim measure granted by the arbitral tribunal, the other party may request the assistance of the competent court. This regulation secures the effectiveness of the arbitrator's measure through the support of the court. However, in the doctrine, the scope and nature of the court's task of directly enforcing the arbitrator's measure are debated. While the Civil Procedure Code permits more expressly the application of the arbitrator's measure by the court in domestic arbitration, this matter is regulated less clearly in the International Arbitration Act. For this reason the enforcement of the arbitrator's measure requires a careful legal assessment according to the characteristics of the concrete case and the rules to be applied. In practice, the process of rendering the arbitrator's measure enforceable through the support of the court is the critical stage determining the real effect of the interim protection.
12. Objection to the Interim Injunction Decision and the Competent Authority
The possibility of objecting to interim measures of protection is important as regards the protection of the balance of interests of the parties. Against the interim injunction decision rendered by the court, the party against whom the measure is granted may object to the court within a certain period. In the objection petition the grounds of objection and the evidence relied upon are stated; the court examines the objection by hearing the parties and renders a decision. In the arbitration context, an important debate is which authority will examine an objection to be made to a measure decision rendered by the court after the arbitration proceedings have begun. Whether the court that rendered the decision or the arbitral tribunal hearing the substance of the dispute is competent has been a matter of debate in practice, and different approaches have emerged in the case law. This uncertainty requires the parties to be careful as regards the correct management of the interim protection process. Moreover, the party in whose favour an interim injunction decision is rendered is liable to compensate the harm suffered by the other party and by third parties should it be found unjustified in its request for the measure; this liability for compensation is subject to a certain limitation period. This liability is an important counterbalancing element preventing the abuse of the possibility of interim protection.
13. The Relationship between Letters of Guarantee and Interim Relief
In international commercial disputes, interim relief acquires importance particularly in connection with bank letters of guarantee. A party's requesting an interim injunction in order to prevent the other party from unfairly calling the letter of guarantee in its hands is a situation frequently encountered in practice. In letters of guarantee having the nature of an independent guarantee, by virtue of the principle of the independence of the guarantee, the bank's payment obligation is separate from the underlying relationship; however, in cases of manifest abuse, the suspension of payment by way of an interim injunction may come onto the agenda. In a dispute subject to arbitration, it is possible to obtain an interim injunction from the court to prevent the letter of guarantee from being called before recourse to arbitration. In this case the arbitration proceedings must be commenced and the relationship of the measure with the arbitration process must be correctly established. Requests for interim injunctions relating to letters of guarantee are a complex field requiring the law of independent guarantees and the procedural law of arbitration to be assessed together. The correct strategy in this field requires an approach that balances both the protection of the function of the guarantee and the prevention of unfair calling.
14. The Recognition of Foreign Arbitrator's Measures in Türkiye
Whether interim measures of protection granted at a foreign seat of arbitration will produce effect in Türkiye is one of the complex matters of international arbitration practice. The enforcement of foreign arbitral awards in Türkiye proceeds within the framework of the New York Convention and the Act on Private International Law and Procedural Law; however, this regime relates essentially to final arbitral awards. Whether interim arbitrator's measures may be regarded as a final and binding arbitral award and therefore be subject to the enforcement regime is debated in the doctrine. Since interim measure decisions do not carry a final character, it is difficult for them to be directly the subject of the classic enforcement mechanism. For this reason, in practice, where a measure granted at a foreign seat of arbitration needs to produce effect in Türkiye, requesting interim protection directly from the Turkish courts often stands out as a more effective route. The regulation of the International Arbitration Act reserving the court's power to grant interim protection provides an important possibility in this respect. Where and how interim protection will be requested in arbitration disputes carrying a foreign element requires a strategic assessment to be made at the outset of the process.
15. Conclusion and Practical Recommendations
Interim relief in international arbitration is a critical field that secures the effectiveness of the final arbitral award and complements the functionality of arbitration. The prominent practical considerations in this field are as follows. First, when the arbitration agreement is being drafted, the need for interim protection must be taken into account and, where possible, an institutional arbitration rule providing for an emergency arbitrator mechanism should be preferred. When the need for interim protection arises, it must be correctly determined whether recourse is to be had to the arbitrator or to the court, according to whether the arbitral tribunal has been constituted and whether the measure requires compulsory execution. It must be known that recourse to the court does not amount to a waiver of the will to arbitrate, but in measures obtained before arbitration the commencement of the arbitration proceedings in time must not be forgotten. Since the enforceability of the arbitrator's measure is limited, the support of the court must be planned from the outset in situations requiring compulsory execution. In measures relating to letters of guarantee, the law of independent guarantees and the procedure of arbitration must be assessed together. The requesting of interim protection at the right time, before the right authority and by the right procedure is a strategic element directly determining the ultimate success of the arbitration proceedings.
Interim relief in international arbitration is closely connected with the other layers of arbitration and dispute resolution. Our article on the enforcement of foreign arbitral awards in Türkiye and the 1958 New York Convention, which addresses the enforcement of final awards, our analysis of bank letters of guarantee and the URDG 758 rules, which forms the background of interim protection relating to letters of guarantee, and our article on choice of law and jurisdiction agreements in international commercial contracts address the matters to which arbitration and interim protection are connected.
For advisory services on interim injunctions, the taking of evidence, emergency arbitrator applications and interim relief strategies in arbitration proceedings in international arbitration, you may contact us at info@guzeloglu.legal.