Interim Measures in International Commercial Arbitration

319 Pages·2013·2.06 MB·English

by  Wael Shalaan

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AArrbbiittrraattiioonn –– AA CCoommppaarraattiivvee SSttuuddyy ooff tthhee
EEggyyppttiiaann,, EEnngglliisshh aanndd SSccoottttiisshh LLaaww

AA TThheessiiss SSuubbmmiitttteedd ttoo tthhee UUnniivveerrssiittyy ooff SSttiirrlliinngg ffoorr tthhee DDeeggrreeee ooff
PPhhDD iinn tthhee SScchhooooll ooff LLaaww

2013

Wael Shalaan
ABSTRACT

Interim Measures are viewed as an essential means to protect parties‘ rights in international
commercial arbitration disputes. Most Arbitration Laws and Rules have recognised the
arbitral tribunal‘s power to grant such measures. The success of this system relies on the
court‘s assistance of the tribunal during the process. This relationship between the tribunal
and the court is something vague under Egyptian Law, since there are no clear rules
addressing the matter. Hence, this research examines the theories that explain the tribunal‘s
authority and the relationship with the authority of the court.

This study uses a comparative analytical approach in terms of analyzing relevant legal texts
to determine the optimal legal approach to the issue. The purpose of the study is to address
deficiencies in the Egyptian law – the Code of Civil Procedure and Egyptian Arbitration Law
– and compare it with English, Scottish Arbitration Acts and international arbitration systems,
laws, and practices.

The findings of this research offer several recommendations that could help achieve a
successful and smooth arbitration process. This study identifies and explains types of interim
measures and explores the international practice of every type. It gives some important
recommendations for future development and improvement of the Egyptian law. It also
makes general recommendations that would help improve the efficiency of the English and
Scottish laws.

Further research directions are also suggested in light of the findings and potential limitations
of this study.

I
DECLARATION

I, Wael Shalaan, hereby declare that no portion of the work referred to in the thesis has been
submitted in support of an application for another degree or qualification of this or any other
university or institute of learning.

II
COPYRIGHT STATEMENT

Copyright of the text of this thesis rests with the author. Copies (by any process) either in
full, or extracts, may be made only in accordance with instructions given by the author and
lodged in the University of Stirling. Details may be obtained from the Librarian. This page
must form part of any such copies made. Further copies (by any process) of copies made in
accordance with such instructions may not be made without the permission (in writing) of the
author.

The ownership of any intellectual property rights which may be described in this thesis is
vested in the University of Stirling, subject to any prior agreement to the contrary, and may
not be made available for use by third parties without the written permission of the
University, which will prescribe the terms and conditions of any such agreement.

III
ACKNOWLEDGEMENTS

My first thanks go to the greatest Almighty Allah, the Glorious, for his mercy and help.
Without His blessings, none of this work would have been possible.

I extend my sincere thanks to all who have helped and encouraged me during the years of my
research, especially my parents for their believing in me, my wife for her great support and
help, and my family and my friends for their encouragement to finish this research.

I would like to express my heartfelt gratitude to Professor Fraser Davidson, my principal
supervisor, for his patience, flexibility, genuine caring, and for his great efforts to explain
things clearly and simply. I am forever grateful. Special thanks go to the University of Stirling
staff for their great help with facilitating everything that I needed in this work.

My gratitude is also extended to the Grand Imam and President of Al-Azhar, Prof. Ahmed El-
Tayyib, for encouraging me to get this scholarship. I will forever be thankful to the former
deans of the School of Shari‘a and Law, Prof. Hamed Abou Talib and Prof. Abdel Samie
Abul Khair, for their unlimited support and encouragement.

IV
TABLE OF CONTENTS

Introduction .............................................................................................................................. 1
I1. Methodology ............................................................................................................ 11
II1. Aims of Research ..................................................................................................... 11
III1. Research Outline and Limitation ............................................................................. 12
Chapter 1 ................................................................................................................................ 14
1.1 What Are Provisional Measures? ............................................................................ 14
1.1.1 Definition ............................................................................................................. 14
1.1.2 UNCITRAL Model Law 2006 definition ............................................................ 17
1.1.3 Interim or Provisional .......................................................................................... 24
1.1.4 Order or Award .................................................................................................... 25
1.1.5 Characteristics of Interim Measures .................................................................... 29
1.1.6 Types of Interim Measures .................................................................................. 31
Chapter 2 ................................................................................................................................ 34
2.1 Measures for Taking/Preserving Evidence .............................................................. 34
2.1.1 Preserving Evidence under Egyptian Laws ......................................................... 34
2.1.1.1 Arbitral Tribunals and Preserving Evidence ................................................ 35
2.1.1.1.1 Preserving Witness Testimony .............................................................. 38
2.1.1.1.2 Preserving Documents ........................................................................... 44
2.1.1.2 The Egyptian Courts‘ Powers regarding the Preservation of Evidence....... 47
2.1.1.2.1 Petition orders ........................................................................................ 51
2.1.1.2.2 Third party possession of documents ..................................................... 54
2.1.1.3 Preserving evidence by appointment of experts .......................................... 56
2.1.1.4 Expert appointments in Egyptian Law ........................................................ 59
2.1.1.5 Conclusion ................................................................................................... 63
2.1.2 Preserving evidence in the Scottish Arbitration Act ............................................ 65
2.1.2.1 Outline of the Scotland (Arbitration) Act 2010 ........................................... 65
2.1.2.2 Preserving Evidence under the Scottish Arbitration Act ............................. 66
2.1.2.2.1 The power of the tribunal to preserve evidence by directions and orders
70
2.1.2.2.2 Tribunal's power to preserve evidence by provisional awards .............. 74
2.1.2.2.2.1 The concept of a provisional award under Rule 39(2)(d) ............... 75
2.1.2.2.2.2 The concept of a provisional award under Rule 53 as procedural
relief 78
V
2.1.2.3 Court power to preserve evidence under the Arbitration (Scotland) Act 2010
81
2.1.2.3.1 Court intervention to preserve evidence under Rule 45......................... 83
2.1.2.3.1.1 Application Procedures ................................................................... 84
2.1.2.3.2 Court intervention to preserve evidence under Rule 46......................... 85
2.1.2.3.2.1 Conditions for court intervention under Rule 46 ............................ 86
2.1.2.4 Conclusions .................................................................................................. 87
2.1.3 Preserving Evidence in the English Arbitration Act 1996 (EAA) ....................... 90
2.1.3.1 Outline of the English Arbitration Act ........................................................ 90
2.1.3.2 The Arbitral Tribunal's Power to Preserve Dispute Evidence ..................... 93
2.1.3.2.1 Arbitral Tribunal Directions (Interim Protection Order) to
Preserve Dispute Evidence ...................................................................................... 97
2.1.3.2.1.1 Mareva Injunctions and Anton Piller Relief under Section 38 ..... 100
2.1.3.2.1.1.1 Mareva Injunction .................................................................. 101
2.1.3.2.1.1.2 Anton Piller Relief ................................................................ 105
2.1.3.2.1.2 Preservation of Evidence by the Tribunal‘s Peremptory Orders .. 109
2.1.3.2.1.3 Preservation of Evidence by an Provisional Award or Order ...... 111
2.1.3.2.1.4 Preservation of Evidence under Section 48 .................................. 113
2.1.3.2.2 Court Power to Preserve Evidence in the English Arbitration Act 1996
114
2.1.3.2.2.1 Conditions for Court Intervention in Arbitration Proceedings ..... 116
2.1.3.2.2.1.1 Court Intervention in Non-urgent Cases ................................ 116
2.1.3.2.2.1.1.1 Conditions for Court Intervention in Non-urgent Cases . 120
2.1.3.2.2.1.1.1.1 Absence of Agreement to Prevent Court Intervention
120
2.1.3.2.2.1.1.1.2 Arbitral Tribunal's Permission or Request ............... 121
2.1.3.2.2.1.1.1.3 Written Agreement of Parties Allowing
Court Intervention 122
2.1.3.2.2.1.2 Court Intervention in Urgent Cases ....................................... 122
2.1.3.2.2.1.3 Revision of Court Orders by Arbitral Tribunal...................... 124
2.1.3.2.3 Appointment of Experts, Legal Adviser or Assessors in
English Arbitration Act 1996 ................................................................................. 127
2.1.3.2.4 Conclusion ........................................................................................... 128
Chapter 3 .............................................................................................................................. 131
3.1. Measures to maintain the status quo and prevent irreparable harm. ..................... 131
3.1.1. Measures to regulate the status quo and prevent irreparable harm in
Egyptian Arbitration Law .............................................................................................. 134
3.1.1.1. The arbitral tribunal preserving the status quo. ......................................... 134
VI
3.1.1.2. The court and preserving the status quo .................................................... 136
3.1.1.2.1. Lawsuit ................................................................................................ 137
3.1.1.2.2. Petitions............................................................................................... 138
3.1.2. Measures to regulate the status quo and prevent irreparable harm in the
Arbitration (Scotland) Act 2010 .................................................................................... 140
3.1.2.1. Preservation of the status quo by the arbitral tribunal ............................... 140
3.1.2.2. Preservation of the status quo by the court ................................................ 146
3.1.2.2.1. Sale of property order ......................................................................... 146
3.1.2.2.2. Warrants for arrestment or inhibition orders ...................................... 147
3.1.2.2.3. Interdict ............................................................................................... 148
3.1.2.2.4. Interim or permanent orders................................................................ 149
3.1.3. Preserving the status quo in the English Arbitration Act 1996 ..................... 149
3.1.3.1. Preservation of the status quo by the arbitral tribunal. .............................. 150
3.1.3.2. Preservation of the status quo by the Court. .............................................. 151
3.1.4. Conclusion ..................................................................................................... 153
Chapter 4 .............................................................................................................................. 155
4.1 Security for Costs Measure .................................................................................... 155
4.1.1 Preamble ............................................................................................................ 155
4.1.2 Security for Costs: Definition ............................................................................ 157
4.1.3 Different Aspects for Security for Costs ........................................................... 160
4.1.3.1 Objections and Answers on Security for Costs ......................................... 161
4.1.3.1.1 Violation of Confidentiality ................................................................. 162
4.1.3.1.1.1 Answer .......................................................................................... 162
4.1.3.1.2 Security for Costs and Access to Justice (Justice Denied) .................. 164
4.1.3.1.2.1 The Answer ................................................................................... 165
4.1.3.1.3 The Absence of Clear Rules or Criteria Addressing This Measure ..... 168
4.1.3.1.3.1 The Answer ................................................................................... 169
4.1.3.1.4 Security for Costs Increases Arbitration Cost and Causes
Financial Damage 171
4.1.3.1.4.1 The Answer ................................................................................... 171
4.1.4 Conclusion ......................................................................................................... 173
4.1.5 Egyptian Arbitration Law and Security for Costs ............................................. 175
4.1.5.1 Egyptian Court and Security for Costs ...................................................... 176
4.1.5.2 Conclusion ................................................................................................. 178
4.1.5.2.1 Regarding Egyptian Arbitration Law................................................... 178
4.1.5.2.2 Regarding Egyptian Civil Procedure Law ........................................... 179
4.1.6 Security for Costs under Scottish and English Arbitration Laws ...................... 180
VII
4.1.7 Conclusion ......................................................................................................... 183
Chapter 5 .............................................................................................................................. 184
5.1 Preamble ................................................................................................................ 184
5.2 Some aspects of Provisional Payment Measures ................................................... 187
5.3 Provisional Payment Measures under the Egyptian Arbitration Law of 1994 ...... 191
5.3.1 Arbitral Tribunal Provisional Payment Order ................................................... 191
5.3.2 The Provisional Payment Measure (Provisional Expenses) before the
Egyptian Court ............................................................................................................... 192
5.4 Provisional Payment Orders under the Arbitration (Scotland) Act 2010 .............. 194
5.4.1 Orders Issued by the Arbitral Tribunal .............................................................. 194
5.4.2 Provisional Payments ordered by the Scottish Courts ....................................... 196
5.5 Provisional Payment Orders under the English Arbitration Act 1996 .................. 198
5.5.1 Provisional Payment Ordered by the Arbitral Tribunal ..................................... 198
5.5.2 Provisional Payment Ordered by the English Court .......................................... 200
5.6 Conclusion ............................................................................................................. 201
5.6.1 Egyptian Law ..................................................................................................... 202
5.6.2 The Arbitration (Scotland) Act 2010 ................................................................. 202
5.6.3 The English Arbitration Act .............................................................................. 203
Chapter 6 .............................................................................................................................. 204
6.1 Anti-Suit Injunctions ............................................................................................. 204
6.1.1 Preamble ............................................................................................................... 204
6.1.2 Anti-Suit Injunction Historical Background ...................................................... 206
6.1.3 Definition of Anti-Suit Injunction ..................................................................... 209
6.1.4 Anti-Suit Injunction on Balance ........................................................................ 210
6.1.4.1 Allianz SpA v West Tankers Case .............................................................. 211
6.1.4.2 Arbitration matters fall outside the scope of Brussels Regulation No
44/2001. 214
6.1.4.2.1 ECJ‘s Answer....................................................................................... 215
6.1.4.3 The anti-suit injunction and the personam effect ...................................... 216
6.1.4.3.1 ECJ‘s Answer....................................................................................... 216
6.1.4.4 Anti-Suit Injunctions and the Principle of Comity .................................... 218
6.1.4.4.1 Answer ................................................................................................. 218
6.1.4.5 An Anti-Suit Injunction is Consistent with Modern and International Law
220
6.1.4.5.1 The Answer .......................................................................................... 221
6.1.4.6 Anti-Suit Injunctions and the Right to a Fair Trial (Denial of Justice) ..... 221
6.1.4.6.1 The Answer .......................................................................................... 222
VIII
6.1.4.7 Anti-suit Injunctions and the Principle of Mutual Trust ............................ 224
6.1.4.8 Anti-Suit Injunction and New York Convention ....................................... 225
6.1.4.8.1 The Answer .......................................................................................... 226
6.1.4.9 Other Aspects of Anti-Suit Injunctions ..................................................... 228
6.1.4.9.1 Economic Interests ............................................................................... 228
6.1.4.9.2 Anti-anti-suit injunction (Clash of Jurisdictions) ................................ 229
6.1.5 Anti-Suit Injunctions under Egyptian Law. ....................................................... 232
6.1.5.1 Anti-Suit Injunction under Egyptian Arbitration Law ............................... 232
6.1.5.2 Anti-Suit Injunctions under Egyptian Civil Procedure Law ...................... 234
6.1.5.3 Conclusion ................................................................................................. 235
6.1.6 Anti-Suit Injunctions under Scottish Law ......................................................... 236
6.1.6.1 The situation after West Tankers ............................................................... 237
6.1.6.2 The power of arbitral tribunals to issue anti-suit interdicts under Scottish
Law 238
6.1.6.2.1 Where there is no agreement to make such remedy available ............. 238
6.1.6.2.2 The parties agree on this remedy ......................................................... 239
6.1.6.3 Conclusion ................................................................................................. 239
6.1.7 Anti-suit Injunctions under English Law ........................................................... 240
6.1.7.1 Arbitral Tribunal‘s Power to Grant an Anti-Suit Injunction ..................... 241
6.1.7.1.1 Tribunal‘s Power under Section 48...................................................... 241
6.1.7.1.2 The Tribunal‘s Power under Section 38 .............................................. 242
6.1.7.1.3 The Tribunal‘s Power under Section 39 .............................................. 244
6.1.8 Conclusion ......................................................................................................... 244
Chapter 7 .............................................................................................................................. 247
7.1 The Conditions for Granting Provisional Measures .............................................. 247
7.1.1 Case Conditions ................................................................................................. 250
7.1.1.1 Urgency ...................................................................................................... 250
7.1.1.2 Irreparable Harm ........................................................................................ 252
7.1.1.3 The Non-effect of the requested measures on the substantive matters ...... 254
7.1.2 Conditions of the Arbitral Tribunal ................................................................... 255
7.1.2.1 The Jurisdiction of the Arbitral Tribunal to take Interim Measures .......... 255
7.1.2.2 Reasonable Chance of Success on the Merits ............................................ 256
7.1.3 Conditions of the Applicant ............................................................................... 257
7.1.3.1 Providing Security ..................................................................................... 257
7.1.3.2 Party request .............................................................................................. 259
7.1.3.3 Good faith (bona fide) ............................................................................... 259
7.1.4 Conclusion ......................................................................................................... 261
IX