Security measures.

Whether is it possible for voluntary arbitration to take any security measures? Art.17 of UNCITRAL Model Law (and art.17 of our Law): unless otherwise agreed by the parties, the tribunal may order any party to take such interim measure of protection which the tribunal considers necessary. Generally speaking, arbitral tribunal is entitled to take security measures.

The question arises. Literally it is provided in this article that the arbitral tribunal may order any party to take such measure of protection which tribunal considers necessary. It means that arbitral tribunal may take any security measures which is needed in arbitrators' view.

The kinds of security measures provided by APK: arrest upon monetary means and other property owned by the respondent, prohibition to respondent as well as other persons to perform some acts with respect to dispute.

So the state court may apply any security measure. What about arbitral tribunal? Let's start with the arrest of property.

Of course, art.17 of Model law does provide a possibility for the tribunal to apply any security measure which is appropriate in tribunal's opinion. It is supported by a possibility of enforcement by a beiliff (?) service. But a state court is involved in the enforcement.

Arrest means prohibition to dispose the property and in some cases to use it. There's no doubt that such a measure may only be imposed by a public power, which is a state court.

Prohibition to a respondent to perform some acts with regard to subject of the dispute. May the tribunal prohibit to a respondent to dispose the property? Of course, it may. But the respondent may ignore such prohibition. But what about a prohibition to third person? He/she is not a party of arbitral agreement. Therefore, tribunal may not prohibit to third person to do something. That's the difference between court and tribunal. Court's rulings are binding for everyone in the state. Arbitral's rulings are binding for parties of the arbitral agreement.

That's why although art.17 of Model law does provide the tribunal to take any security measure, we should keep in mind, that such measures are not binding for non-parties of arbitral agreement. And even parties of that agreement have a discretion whether to follow the ruling of tribunal taking security measure.

Furthermore, the question arises: may the tribunal seek the assistance from state court in terms of security measures? There's such a direct permission in our APK of 2002. Still the situation until recently was much more complicated than might be seen.

APK of 2002 is a third APK in post-Soviet Russia. The first one was adopted in 1991, the second - in 1995. Neither of them specifically mentioned such a possibility.

APK, which would be applicable for a state court when it deciding to take security measure, regulates the issue of security measures only in a case when claim is filed to a state court. Therefore, state court would likely refuse to take security measure.

However, the situation had changed. Merchant shipping code (art. 308) was adopted in 90s. There's a regulation regarding arrest. Such a security measures may be imposed by a state court even if there's an arbitration clause. It means that this code entitled our state courts to arrest even upon a request of a party to arbitral proceedings.

Of course, this is a very substantial step to make art.9 of Model law (and our law) more viable. But still Merchant shipping code is one thing, APK is another. APK does not support KTM and our courts will unlikely apply the rule of KTM.

But now art.9 of our Law on ICA is viable.

Our state court may apply security measures regardless of whether the claim is subject of proceedings in state court (including foreign state court) or in arbitration. In terms of foreign state court, foreign plaitiff may apply for security measures to our state court even if the claim is subject to proceedings in foreign court.

Some foreign courts issue antisuit injunctions. Injunction is a kind of interim decision prohibiting to do something. Sometimes foreign courts issue antisuit injunctions imposing the property located abroad. Would such antisuit injunction be enforceable?

There're two situations. The problem of enforcement of final judgment/award issued in the territory of one state and enforced in the territory of another state. It is the first situation. The second one deals with interim rulings.

With respect to the first situation both GPK and APK are based on the idea that in order to have a foreign court decision enforced in Russia a special treaty is required. How our court should act in the case of absence of such a treaty?

It is possible on the base of principle of comity. But both treaties and international comity only mean the situation when there's res judicata, when the case is completely resolved abroad. In terms of injunction the case is not resolved yet.

Supreme Arbitration Court issue an ordinance on this issue. It is provided there that judicial acts of foreign courts on application of security measures shall not be subject to enforcement in Russia since they are not final judicial acts on the merits of the case. That's why injunction will not be enforced in Russia.

But a foreign plaintiff has an opportuny to submit an application on security measures to our state court, although the merits of the case are subject to the proceedings in the foreign court. So there's no problem.

Currently, both arbitral tribunal may impose some security measures and state court when being approached may also to do so.

What is better: to approach a tribunal to take security measures or to approach a court? State court.