The application of interim urgent measures is necessary when parties need to protect their rights and cannot wait until the final decision of the arbitrator to resolve the dispute. It is a way to protect the requesting party’s rights and prevent unnecessary damage. This measure also helps to ensure fairness in resolving commercial disputes. However, the application of interim urgent measures must comply with legal provisions to avoid misuse and unintended consequences. In Vietnam, interim urgent measures in commercial arbitration are regulated by the Law on Commercial Arbitration 2010.
1. Interim urgent measure
Interim urgent measures can be defined as a decision from a competent state authority requiring one or more parties in a dispute to cease or limit a specific action while waiting for the final decision of the court/arbitrator to meet the urgent needs of the parties, protect evidence, preserve disputed property, ensure the resolution and enforcement of the dispute, and protect the legitimate rights and interests of the parties involved in the dispute.
Unless otherwise agreed by the parties (e.g., if the parties agree not to sequester property in all cases, then when a dispute arises in arbitration, sequestration of the disputed property shall not be applied), disputing parties have the right to request that the Arbitration Council or Court apply interim urgent measures in accordance with the Law on Commercial Arbitration 2010 and related legal regulations.
When resolving disputes through arbitration, both the Arbitration Council and the Court have the power to apply interim urgent measures. Therefore, the party may request the Court or the Arbitration Council to apply interim urgent measures when necessary. It is not recommended to submit a request to both institutions at the same time because as the Court and the Arbitration Council will both examine and carefully consider before deciding to apply the measure, they could reject it if they believe the interim urgent measure is being or will be applied by the other institution. In addition, requesting the Court to apply interim urgent measures should only be made when the Arbitration Council cannot perform the request or when an emergency requires immediate action.
2. List of Interim urgent measure
The provisions of the Law on Commercial Arbitration 2010 stipulate that interim urgent measures are applied in commercial disputes:
- Prohibiting changes to the current status of the disputed property: This applies if there is evidence during the litigation process that the party currently occupying or holding the disputed property has engaged in acts such as dismantling, assembling, constructing, or other acts that alter the current status of the property.
- Prohibiting or compelling any disputing party to perform certain acts: This is applicable if there is evidence during the litigation process that the party or any other individual, organization or agency has performed or failed to perform certain acts affecting the resolution of the case, the legal rights and interests of the related parties being resolved by the Arbitration Council, in order to prevent any adverse effects on the arbitration proceedings.
- Seizure of the disputed property: This applies if there is evidence during the litigation process that the party holding the disputed property has engaged in acts such as dispersing or damaging the property. The seized property can be detained and stored at the civil enforcement agency or delivered to one of the parties or a third party for management until a decision is made by the Arbitration Council.
- Request for preservation, storage, sale, or disposal of any property of one or more disputing parties: This applies in cases where the disputed property is at risk of damage, loss of value, depreciation, or distortion in order to minimize property damage in a timely manner.
- Temporary payment orders between the parties: This applies in cases where one of the parties has urgent needs. As requested by one of the disputing parties, the Arbitration Council may apply interim urgent measures regarding temporary payments between the disputing parties when the requesting party has demonstrated that the application of this measure is justifiable and necessary.
- Prohibiting the transfer of property rights for the disputed property: This applies when the disputed property has or is at risk of being sold, transferred, leased, or gifted during the arbitration proceedings, causing damage to other parties or creating difficulties in resolving the dispute and handling the disputed property.
3. Request for Interim urgent measure adopted by the Arbitration Council
The Arbitration Council and the Court are competent to apply interim urgent measures at the request of the involved parties in the arbitration proceedings. However, the scope of this article only focuses on presenting the interim urgent measures adopted by the Arbitration Council.
The requesting party also needs to note the following:
- Before applying interim urgent measures, the Arbitration Council has the right to compel the requesting party to apply interim urgent measures to perform financial security obligations.
- The Arbitration Council has the authority to apply interim urgent measures only to the disputing parties and has no jurisdiction over third parties. Where there is a request and the arbitration applies to a third party, it should be made clear whether the third party is involved in the arbitration agreement, since usually, the arbitration agreement is only binding for the parties to that agreement.
- Before applying the measures, the Arbitration Council must ask the parties and check whether one of the parties has requested the Court and whether the Court has applied one or several interim urgent measures. If one of the parties has requested the Court to apply interim urgent measures, the Arbitration Council must refuse to apply them.
4. Conditions for not apply Interim urgent measure
According to the provisions of the Law on Commercial Arbitration 2010, the Arbitration Council can only apply interim urgent measures if the following four conditions are fully met. If any of these four conditions is missing, the Arbitration Council cannot apply interim urgent measures:
- There must be a party requesting the application of one or more interim urgent measures.
- The requesting party must provide documents and evidence demonstrating the necessity of applying those interim urgent measures.
- The requesting party for interim urgent measures has fulfilled the financial security obligation to ensure compensation for any damage caused by the improper application of interim urgent measures to the party subject to such measures.
- No party has requested the Court to apply interim urgent measures.
5. Procedure for applying Interim urgent measure
The procedure for applying interim urgent measures by the Arbitration Council is as follows:
Step 1: The party requesting the application of interim urgent measures must submit a petition to the Arbitration Council.
The contents of the petition include: the date of the petition, the name and address of the party requesting the application of interim urgent measures, the name and address of the party subject to the application of interim urgent measures, a summary of the dispute content, the reason for the need to apply interim urgent measures, the specific interim urgent measures to be applied, and any specific requirements.
Attached to the petition for the application of interim urgent measures, the requesting party must provide the Arbitration Council with evidence to support the need to apply such measures.
Step 2: The Arbitration Council shall issue a document specifying the exact amount of money, property or other assets that must be provided as financial security corresponding to the potential damages that may arise from incorrect application of interim urgent measures in order to protect the interests of the party required to apply such measures.
Step 3: Based on the decision of the Arbitration Council, the requesting party must provide a fixed amount of money, valuable metals, gemstones or documents with value to be deposited into a sealed account at a bank determined by the Arbitration Council.
Step 4: The Arbitration Council shall consider and decide whether to apply interim urgent measures right after the requesting party has fulfilled the security measures required by the Arbitration Council. If the request is not accepted, the Arbitration Council shall notify the requesting party in writing and clearly mention the reasons for their refusal.
Please note that the enforcement of the decision to apply interim urgent measures by the Arbitration Council must be carried out in accordance with the provisions of the Law on Civil Enforcement.
6. Cancel Interim urgent measure
The Arbitration Council must issue a decision to cancel interim urgent measures when one of the following circumstances occurs:
- The requesting party requests the cancellation: The requesting party must submit a request to cancel the interim urgent measures to the Arbitration Council.
- The party required to comply with the obligation has deposited the security or another party has fulfilled the security measures for the requested party; or the obligation of the requested party terminates under the provisions of the law: The Arbitration Council shall consider canceling the interim urgent measures.
The provisions on interim urgent measures in the Law on Commercial Arbitration 2010 have clearly defined the necessary conditions for applying this measure, ensuring the rationality and fairness of the Arbitration Council’s decision. This also helps to enhance the trust of parties participating in the commercial arbitration process and provides reliable legal solutions for commercial disputes. In summary, interim urgent measures play an important role in the process of resolving arbitration disputes and must be applied correctly to ensure validity and effectiveness.