Parties to an agreement sometimes express concern that an arbitration clause may restrict access to speedy and effective interim relief in the event that the other party breaches the contract.
It is important to note that the Arbitration Act 2010, by way of Article 9 of the Model Law provides that it is not inconsistent for parties to an arbitration agreement to seek interim relief from the Court. Injunction proceedings will not be stayed due to an arbitration clause.
In fact, where there is an arbitration clause in place, a party may find that they have a greater range of immediate remedies to choose from, as Article 17 of the Model Law gives an arbitrator power to make interim orders to preserve the status quo, to protect assets and documents from destruction or dissipation, and to prevent harm to the arbitral process. The test applied by arbitrators is similar to that applied by the Courts when faced with an injunction application; being that damages are inadequate, the likely harm of not ordering the measure outweighs the likely harm of ordering it, and there is a reasonable possibility of the applicant’s success on the merits of the claim.
In some instances, it might be more effective to seek an injunction in Court, particularly in a situation where an injunction will be too late after the process for appointing an arbitrator is completed. For this reasons, parties find it assuring to know that they will not be prevented from accessing the Court for emergency relief.
The above is provided for information purposes and is not intended as legal advice. If you have questions about an arbitration clause we, at Fitzsimons Redmond, would be happy to advise you on your next steps. Please contact us on 01-676 3257.
By Lisa Quinn O’Flaherty
Solicitor at Fitzsimons Redmond