Arbitration and interim relief

It is the first time I comment on a non-Italian decision: it is a decision delivered by the High Court of England and Wales (Gerald Metals SA v. The Trustees of the Timis Trust & others [2016] EWHC 2327 (Ch), available here).  The decision concerns the relationship between interim jurisdiction of State Courts and Arbitral Tribunals and it remembered me of the doctrine of Italian State Courts in the few cases Italian Arbitral Tribunals have such a jurisdiction (that is, in the case of corporate arbitration).

The claimant commenced arbitration proceedings under LCIA rules, claiming the breach of a guarantee. LCIA rules allow the appointment of an emergency arbitrator, in case of exceptional urgency, and the claimant requested the LCIA to appoint such emergency arbitrator, seeking a freezing order (amongst other things).

The defendant replied by undertaking not to dispose of any assets other than for full market value and at arm’s length, and to give seven days’ notice before disposing of certain assets.  In the light of these undertakings, the LCIA rejected the application for the appointment of an emergency arbitrator.

As a consequence, the claimant sought an interim measure from the High Court.  In particular, he pleaded that the mere fact that the LCIA rejected its application did not prevent it from filing the same application with the High Court.  Indeed, the LCIA only appoints an emergency arbitrator in case of exceptional urgency, whereas the High Court issues interim measures in any case of urgency – even if it is not exceptional.

The High Court stated that “it would be uncommercial and unreasonable to interpret the LCIA rules as creating such a gap” and that “it is only in cases where those powers, as well as the powers of a tribunal constituted in the ordinary way, are inadequate, or where the practical ability is lacking to exercise those powers, that the court may” issue interim measures.

The doctrine set forth by Italian Courts is quite similar: under Italian law, even in the few cases where Arbitral Tribunals have interim jurisdiction, State Courts may issue interim measures, if the Arbitral Tribunal cannot exercise its powers (say, if the Arbitral Tribunal has not been constituted – more details in this post).

The decision delivered by the High Court appears to be a significant one (at least, according to the comments on it which appeared on the websites of some English law firms), since it limits the Court assistance to LCIA arbitrations.  The same doctrine – quite paradoxically – allows the Court assistance to Italian arbitrations in corporate matters.