Table of Contents
In Short
- Arbitration offers a binding resolution to commercial disputes without going to court.
- Interim injunctions are court orders that prevent injustice before a trial, including freezing or preserving assets.
- Courts can issue interim injunctions during arbitration in urgent or non-urgent cases, with or without permission, depending on the situation.
Tips for Businesses
Ensure your commercial contracts include arbitration clauses to avoid lengthy court battles. If urgent, apply for an interim injunction to protect assets or prevent breaches during arbitration. Consulting a solicitor for proper guidance, especially in urgent cases, is essential for success in these proceedings.
If your business encounters a commercial dispute, understanding the arbitral process and the use of interim injunctions is crucial. Arbitration is an effective method for resolving disputes while avoiding court litigation, which is often encouraged in commercial disagreements. As a result, your commercial contract may include an arbitration clause or be governed by an international commercial arbitration agreement. If you are considering court action, interim injunctions can be valuable. Under English law, it is possible to participate in arbitration proceedings while a court issues interim measures, such as an interim injunction. This article explains the court’s powers concerning interim injunctions within the arbitration process, covering the legal framework and any critical requirements.
What is Arbitration?
Arbitration is a form of alternative dispute resolution (ADR) that leads to a binding decision in a commercial dispute. The process involves the parties appointing one or more arbitrators to review evidence and issue a decision. After the review, the arbitral panel provides an arbitral award, which concludes the dispute.
What is an Interim Injunction?
An interim injunction is a court order issued before a trial. It requires a party to either:
- perform a particular action; or
- refrain from carrying out a specific action.
The purpose of interim injunctions is to prevent injustice from occurring before the trial takes place. Various types of interim injunctions exist, including:
- search orders;
- freezing orders; and
- prohibitory injunctions.
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Can an Arbitral Tribunal Grant an Interim Injunction?
An arbitral tribunal cannot grant an interim injunction, as the Arbitration Act 1996 does not grant such authority. However, the tribunal can grant a final injunction as part of the arbitral award under the law. The parties involved in the arbitration may also agree to withhold this power from the tribunal. In this case, the court retains the power to issue a final injunction within the arbitration proceedings.
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Why Might I Need a Court to Issue an Interim Injunction During Arbitration?
You may need a court to issue an interim injunction during arbitration proceedings to support the arbitration, such as through a freezing injunction. This prevents a party from dealing with or ceasing the existence of certain assets. Other reasons for seeking an interim injunction include:
- preserve property subject to the arbitration;
- stop someone from using property where it would be a breach of contract; and
- to help enforce an arbitral award.
Can I Apply for an Interim Injunction During Arbitration?
If the application is not urgent, either party can apply for an interim injunction during arbitration proceedings. In such cases, all parties must agree, or the tribunal must grant permission. Typically, the tribunal will support this and may provide its reasoning to the court.
If you wish to apply for an interim injunction during arbitration, you must use an arbitration claim form. A witness statement, or an affidavit in the case of a freezing injunction should support this application. You should consult a solicitor to guide you through this process and offer advice in urgent cases.
Key Takeaways
Arbitration is a method of alternative dispute resolution (ADR) that enables you to resolve commercial disputes without resorting to court litigation. An interim injunction is a court order issued before a trial, and arbitral panels do not have the authority to grant this form of relief. However, during arbitration, you may require a court to issue an interim injunction, such as a freezing order, to prevent a party from misusing assets. You can apply for an interim injunction on a non-urgent or urgent basis. In non-urgent cases, permission is required, whereas in urgent situations, the law allows you to apply without consent in certain circumstances.
For assistance with understanding interim injunctions and arbitration, LegalVision’s experienced dispute solicitors in the UK can provide guidance. Through our membership, you can access legal advice and document support for a low monthly fee. Call us today on 0808 196 8584 or visit our membership page.
Frequently Asked Questions
An interim injunction is a court order that compels a party to either do something or refrain from doing something before a trial begins.
A court may issue an interim injunction during arbitration to preserve assets, such as through a freezing injunction, or to ensure compliance with contractual obligations.
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