The claimant, a US company, entered into a professional services agreement with the first respondent, a Panamanian company, whose rights under the agreement were assigned to the second respondent, a company registered in the Dominican Republic. The second respondent initiated proceedings in the courts of the Dominican Republic, accusing the claimant of breach of contract. The claimant requested the arbitral tribunal to find that it had not breached the agreement and, as an interim and conservatory measure, to order the second respondent to suspend the proceedings in the Dominican courts.

La demanderesse, une société américaine, conclut un contrat de services professionnels avec la première défenderesse, une société panaméenne, qui céda les droit que lui conférait le contrat à la seconde défenderesse, une société immatriculée en République dominicaine. La seconde défenderesse intenta une action devant les tribunaux de la République dominicaine dans laquelle elle reprocha à la demanderesse d'avoir violé le contrat. La demanderesse sollicita du tribunal arbitral une décision déclarant qu'elle n'avait pas violé le contrat et une mesure provisoire et conservatoire enjoignant à la seconde défenderesse de suspendre l'action portée devant les tribunaux dominicains.

El demandante, una sociedad estadounidense, concluyo un acuerdo de servicios profesionales con el primer demandado, una sociedad panameña, cuyos derechos con arreglo al acuerdo se adjudicaron al segundo demandado, una sociedad registrada en la República Dominicana. El segundo demandado inició un procedimiento en los tribunales de la República Dominicana acusando al demandante de incumplimiento de contrato. El demandante solicitó al tribunal arbitral que comprobara que él no había incurrido en incumplimiento del acuerdo y que, como medida provisional y cautelar, ordenara al segundo demandado que anulara el procedimiento en los tribunales de la República Dominicana.

'A. The request for interim relief

1. As expressed in Section VII.A.1 of the Terms of Reference, through a brief dated . . . 2000 Claimant requested the sole arbitrator to issue an interim order directing [Respondent 2] to cease from continuing to pursue the litigation in the courts of the Dominican Republic against [Claimant] until this arbitration is concluded and a final award is issued.

2. Through a brief dated . . . 2001 [Claimant] confirmed its request to the sole arbitrator to issue an interim order pursuant to Article 23 of the ICC Rules.

3. The arguments on which [Claimant] supports such request are twofold: (a) should a Dominican Republic court issue a decision that conflicts with the sole arbitrator's functions, it would seriously undermine the present arbitration proceedings; and (b) issuance of an interim order would preserve the arbitral tribunal's authority to resolve this dispute and preserve the status quo until the arbitration is completed.

4. The position of Respondents as regards this request has been put forth during the jurisdictional challenge phase of the present proceedings by stating that it is the courts of the Dominican Republic which have jurisdiction to entertain the present case, and not this arbitrator.

Respondents have been given opportunity to present their case (as required by Article 15(2) of the ICC Rules), and the sole arbitrator assumes that all arguments Respondents have elected to submit have been made. Although Respondents were given a period within which to provide arguments in support of their position in the letter of the sole arbitrator to the parties dated . . . 2001, Respondents failed to submit a memorial or comment. Respondents did, however, submit a document entitled "Claims against [Claimant]" dated . . . 2001 where Respondents' substantive position on the subject is reiterated.

5. As the record shows, [Respondent 2] filed on or around . . . 1995 a commercial claim for indemnification of damages and lost profits (demanda comercial para reparación de daños y perjuicios) against [Claimant] and/or [company A] and/or [company B]. The [court] rendered judgment on . . . 1996, whereby said Court resolved that it lacked jurisdiction to examine such matter.

Unsatisfied with such judgment, [Respondent 2] appealed before the [court of appeal] which court reversed through judgment of . . . 1997 the lower Court decision, and ruled that the Dominican courts have jurisdiction over the claim. [Claimant] appealed in turn the decision to the Supreme Court of the Dominican Republic. It appears as though there has not been a final decision in this regard.

B. Authority to issue interim measures

6. Under Article 23 of the ICC Rules, arbitration tribunals have authority to issue those interim or conservatory measures they deem appropriate. The above also holds true under the laws of the State of Texas, site of the arbitration, as confirmed in the precedent submitted by Claimant in its brief of . . . 2000, where the Court of Appeals of such State held that the arbitrator's authority to issue an injunction derived from the arbitration agreement which did not limit the arbitrator's authority to award injunctive relief. 1

7. Furthermore, international commercial arbitration practice shows that arbitration tribunals have inherent power to issue such orders as may be necessary to conserve the respective rights of the parties and to ensure that the tribunal jurisdiction and authority are made fully effective. 2

8. In the Partial Award on Jurisdiction dated . . . 2000 the sole arbitrator concluded that the arbitration clause contained in the Professional Services Agreement of . . . 1993 executed among [Claimant] and [Respondent 1] was valid, and that Claimant had not waived its rights to have disputes under such agreement resolved pursuant to its terms, and as a consequence the sole arbitrator held jurisdiction to hear and determine the parties' disputes in this case.

Although prior to the commencement of this arbitration Respondents had already initiated litigation against Claimant and other parties in the Dominican Republic, continuation of such proceedings in light of the partial award is evidently contrary to the covenant under the arbitration clause deemed to be valid and enforceable.

C. Analysis of the request

9. Entering into an arbitration agreement produces effects on the rights of the parties; the primary effect is that parties thereto must refrain from undertaking any conduct which is either contrary to such commitment or may indirectly undermine it.

10. In deciding on the request of Claimant, the sole arbitrator feels compelled to assess whether issuing an award granting such interim relief is justified in the circumstances at hand. Interim or conservatory measures, such as that requested by Claimant, are usually directed at:

a) preserving the status quo of the subject matter of the arbitration;

b) the preservation of evidence;

c) ordering security for costs; and/or

d) issuing an injunction, i.e. instructing a party to refrain from certain activity or conduct.

11. The issuance of an injunction is a delicate measure which tribunals, including arbitral tribunals, must take seriously and approach with the utmost caution. In deciding whether an injunction is warranted, tribunals are required to assess the consequences of such measure. In doing so, international arbitration practice shows that whenever any of the following exist, an arbitrator will be justified in ordering an interim measure:3

a) threat of grave or irreparable damage to the counterparty in the arbitration proceedings;

b) threat of grave or irreparable damage to the tribunal's jurisdiction; and/or

c) the preservation of the status quo of the arbitration so as to protect the subject matter from conduct which might render the outcome of the arbitration proceedings useless.

12. In the case at hand, if [Respondent 2] is allowed to pursue the continuation of the domestic proceedings this may result in a judgment which, regardless of its findings, is clearly contrary to the express intent of the parties of having their disputes resolved by means of arbitration, as this intent was reflected in the arbitration clause under the Professional Services Agreement.

13. Continuance of the proceedings in the Courts of the Dominican Republic may result in damage to the Claimant who would be forced to litigate a matter which has been submitted to arbitration.

14. Furthermore, by continuing the Dominican Republic litigation [Respondent 2] would incur [sic] in conduct which can materially affect the practical effectiveness of the ongoing arbitration proceedings and compromise the subject matter of the arbitration.

15. On the other hand, even if status quo or this tribunal's jurisdiction was not materially hampered, the sole arbitrator is convinced that if the interim relief requested were not to be granted, less than all available remedies to protect the proceedings and enforce the arbitration agreement would be employed.

Taking into consideration the reasons examined above, I find that the request of [Claimant] is warranted for interim relief which directs [Respondent 2] to abstain from continuing any proceedings in the Dominican Republic against Claimant.

Award

1. [Respondent 2] is hereby ordered to immediately cease and desist from continuing the litigation before the courts of the Dominican Republic against [Claimant] until a final award is issued in these arbitration proceedings, and to refrain during such period from undertaking any conduct which might directly or indirectly contradict the arbitration agreement and/or the present arbitration proceedings.'

1
J.J. Gregory Gourmet Services, Inc. v. Antone's Import Company, 927 S.W. 2d 31 (Tex. Ct. App. 1995).

2
George H. Aldrich. The Jurisprudence of the Iran-United States Claims Tribunal, Clarendon Press, Oxford, 1996, at 144.

3
George H. Aldrich. The Jurisprudence of the Iran-United States Claims Tribunal, Clarendon Press, Oxford, 1996, at 147.