No requirement of "irreparable harm" for grant of provisional measures in ICSID arbitration. | Practical Law

No requirement of "irreparable harm" for grant of provisional measures in ICSID arbitration. | Practical Law

In City Oriente Limited v The Republic of Ecuador and others, ICSID Case No ARB/06/21, the Tribunal had to consider whether provisional measures should only be ordered as a means of preventing irreparable harm.

No requirement of "irreparable harm" for grant of provisional measures in ICSID arbitration.

by PLC Dispute Resolution
Published on 03 Jun 2008International, USA
In City Oriente Limited v The Republic of Ecuador and others, ICSID Case No ARB/06/21, the Tribunal had to consider whether provisional measures should only be ordered as a means of preventing irreparable harm.
Article 47 of the ICSID Convention provides that "except as the parties otherwise agree, the Tribunal may, if it considers that the circumstances so require, recommend any provisional measures which should be taken to preserve the respective rights of either party".
Rule 39 of the Arbitration Rules provides:"(1) At any time after the institution of the proceeding, a party may request that provisional measures for the preservation of its rights be recommended by the Tribunal. The request shall specify the rights to be preserved, the measures the recommendation of which is requested, and the circumstances that require such measures."
In light of this wording, the Tribunal concluded that whilst provisional measures should only be ordered as a last resort, it was not "so essential that provisional measures be necessary to prevent irreparable harm". However, the harm the petitioner would be spared by the implementation of such measures must be significant, and exceed greatly the damage that would be caused to the respondent.
Compare this with UNCITRAL Model Law position which provides (Article 17A 1(c)) that if the measure is not ordered, the harm likely to result must be harm not adequately reparable by damages, and that such harm must substantially outweigh the harm that is likely to result to the other party if the provisional measure is granted.