Meaning
Temporary orders issued by courts or arbitral tribunals protect the rights of parties during the pendency of a formal dispute. These legal remedies, known as interim measures, prevent irreparable harm, secure disputed assets or preserve critical evidence until a final award is rendered. They are essential for maintaining the commercial status quo when one party attempts to alter the distribution or supply arrangements unilaterally.
Risk Prevention
Asset dissipation or the destruction of records can render a final legal victory meaningless. A distributor facing unfair termination may seek interim measures to compel the supplier to continue shipments during the arbitration. This protects the distributor’s market share and prevents customers from migrating to alternative products.
These protective orders are only granted if the applicant demonstrates a strong prima facie case and urgent necessity.
Judicial Authority
The enforcement of provisional orders depends on the cooperation of national courts. While arbitral tribunals can issue directives, they lack the coercive power to seize assets or enforce compliance directly. Parties must often apply to local courts to execute these interim measures, especially when the counterparty refuses to comply.
This makes the selection of the dispute venue a critical risk factor in commercial distribution contracts.
Contractual Compliance
Well-drafted agreements include specific clauses that govern the availability of provisional relief. These provisions can exclude the right to seek court-ordered measures, directing all applications to an emergency arbitrator instead. This choice helps maintain confidentiality and avoids the delays associated with local judicial systems.
