• ICAR


- By Mirza Moiz Baig

Keywords: interim relief, freezing injunctions, preservation, custody, sale of goods, non- intervention, arbitral proceedings

In an increasingly globalized world where assets can often be dispersed and transferred across jurisdictions, interim or conservatory relief has acquired increasing importance. Conservatory relief may be sought as a form of an in personam interim relief during the pendency of arbitration proceedings or after the proceedings are completed, when an award is rendered but is yet to be executed. Termed the ‘Mareva injunction’, after the Court of Appeal’s decision in Mareva Compania Naviera SA v International Bulkcarriers SA, this form of relief is sought by an award creditor against the award debtor to ensure that the latter does not transfer assets across jurisdictions so as to defeat the arbitration proceedings and the subsequent award. [1] An Arbitral Tribunal may grant freezing injunctions, where it is empowered to do so by the agreement of the parties. A number of arbitral institutions now have rules that provide for an expedited constitution of a tribunal in cases of urgency. Article 9A of the London Court of International Arbitration (LCIA) Arbitration Rules, for instance, allows a party to apply to the LCIA for the expedited formation of an arbitral tribunal in cases of "exceptional urgency". Nonetheless, domestic courts have frequently assumed the power to grant interim or conservatory injunctions, arguing that the same does not impinge on the arbitration agreement given that these measures do not determine the merit of the dispute between the parties. Advocates of court sanctioned conservatory measures argue that such measures are not only desirable but are necessary to ensure that a party does not defeat the very purpose of the arbitration. Such measures, they opine, do not supplant the authority of the Arbitral Tribunal but merely supplement or complement it. To substantiate this view, they rely on Article 9 of UNCITRAL’s Model Law on International Commercial Arbitration, which provides as follows:

Article 9. Arbitration agreement and interim measures by court

It is not incompatible with an arbitration agreement for a party to request, before or during arbitral proceedings, from a court an interim measure of protection and for a court to grant such measure.

The purpose of this Article is to show instances where court sanctioned interim injunctions may be appropriate or even necessary. Further, it argues that such measures may only be appropriate to the extent that an arbitral tribunal lacks the authority to grant similar measures. In doing so, it argues that courts ought to refrain from granting interim injunctions in instances where such injunctions are already covered under the arbitration agreement in view of the Convention on the Recognition and Enforcement of Foreign Arbitral Award (‘New York Convention’), Article II (3) whereof provides:

The court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed.

Many jurisdictions now vest domestic courts with the power to provide interim or conservatory relief. Section 44(3) of the Arbitration Act of 1996 in England, for instance, allows courts to, where necessary, make appropriate orders for the preservation of assets and evidence. Section 9 of the Arbitration and Conciliation Act of 1996 in India also allows courts to make interim orders with respect to the preservation, custody, or sale of goods which are the subject matter of the dispute and to secure the amount in dispute in the Arbitration.

These conservatory measures, however, raise concerns about a party to the arbitration agreement approaching the Court in a manner inconsistent with the Agreement or a party attempting to get a second bite at the apple, i.e. approaching the Court after its application for interim measures is dismissed by an arbitral tribunal. This concern is particularly pertinent for jurisdictions where interim measures are based not on statutory provisions but on principles enunciated through judicial decisions which are often inconsistent and ambiguous.

This article argues that conservatory or Mareva injunctions may only be appropriate to the extent that an arbitral tribunal does not have the power or is temporarily unable to exercise the power to grant such injunctions. This is in keeping with the principle of judicial non-intervention in arbitral proceedings, which has gained particular traction after various arbitral tribunals have promulgated rules to constitute expedited tribunals for interim measures. This view also resonated in Gerald Metals SA v Timis, where the Court refused to grant an injunction given that the LCIA’s 2014 Rules provide for the formation of an expedited arbitral tribunal in cases of "exceptional urgency” at the LCIA. It held:

The obvious purpose of Articles 9A and 9B is to reduce the need to invoke the assistance of the court in cases of urgency by enabling the arbitral tribunal to act quickly in an appropriate case [2]

Adverting now to the arbitration regime in Pakistan, the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 (‘Act of 2011’) does not vest courts with the power to grant conservatory or interim injunctions. Judicial decisions are, therefore, often inconsistent and frequently conflate international arbitrations with domestic arbitrations. The resultant ambiguity has jeopardized Pakistan’s reputation as an arbitration friendly jurisdiction. This article, therefore, argues that courts would do well to refrain from granting such injunctions in matters where the arbitration agreement expressly confers the arbitral tribunal or arbitrators the power to grant such measures. This view is not only consistent with the principles recognized by courts in England and other common law jurisdictions but also with the New York convention, Article II (3) whereof provides that courts shall, when seized of a matter covered under the arbitration agreement, refer the parties to arbitration. Section 4 of the Act of 2011 is in pari materia to Article II (3) of the New York Convention and provides:

4. Enforcement of arbitration agreements- (1) A party to an arbitration agreement against whom legal proceedings have been brought in respect of a matter which is covered by the arbitration agreement may, upon notice to the other party to the proceedings, apply to the court in which the proceedings have been brought to stay the proceedings insofar as they concern that matter.

(2) On an application under subsection (1), the court shall refer the parties to arbitration, unless it finds that the arbitration agreement is null and void, inoperative or incapable of being performed.

Section 4, therefore, limits the extent to which domestic courts may grant interim or conservatory measures. Courts in Pakistan would, thus, do well to embrace the limitations on their jurisdiction and express fidelity to the principle of non-intervention in arbitral proceedings. It may also be stated that notwithstanding inconsistencies in its jurisprudence in this regard, judgments such as the one rendered in Travel Automation (Private) Limited v Abacus International [3] and Ovex Technologies Private Limited v PCM (Private) Limited [4] enunciate important guiding principles. Both judgments acknowledged that courts are mandated to refrain from hearing any matter covered under the arbitration agreement, thereby obviating any judicial discretion as regards interim injunctions where the agreement itself provides for such injunctions.

Until courts refrain from entertaining applications in derogation of arbitration agreement and refuse to give effect to section 4 of the Act of 2011 in its true spirit, the fate of arbitrations and with them the confidence of businesses would continue to hang in the balance.

Mr. Mirza Moiz Baig is a lawyer based in Pakistan and holds an LL.M. from Harvard Law School.

Preferred Method of Citation –Mirza Moiz BaigMareva Injunctions in International Commercial Arbitration’ (ICAR, 12 October 2020 <>.


[1] [1980] 1 All ER 213

[2] [2016] EWHC 2327 (Ch.)

[3] 006 CLD 497

[4] PLD 2020 Islamabad 52

The views and opinions expressed in the article are those of the author(s) solely and do not reflect the official position of the institution(s) with which the author(s) is /are affiliated. Further, the statements of the author(s) produced herein should not be construed as legal advice, nor should they be taken with any reference to any matters or legal work related to the author.


Recent Posts

See All