Meaning
A temporary court order or arbitral measure designed to preserve the status quo and protect assets while a final decision is pending. This measure prevents one party from taking actions that would make a final judgment useless, such as selling disputed property or destroying evidence. By securing this early protection, a plaintiff ensures that the counterparty remains capable of fulfilling their eventual obligations.
In distribution disputes, interim relief is often used to stop a partner from transferring inventory to another company.
Legal Purpose
The primary function of this measure is to manage the risk of irreparable harm during the course of a long lawsuit. If a supplier intends to terminate a distributor, the distributor can seek a temporary injunction to maintain the supply of products. This preservation of business operations ensures that both parties can survive the litigation process.
Procedural Requirement
To obtain this protection, the applicant must demonstrate a strong chance of winning the main lawsuit. They must also show that they will suffer greater harm without the order than the other party will if the order is granted. This test requires the applicant to present clear evidence of imminent financial or operational danger.
Enforcement Power
Arbitrators and judges hold different powers when it comes to enforcing these temporary orders. While a judge can use the full authority of the state to enforce compliance, an arbitrator must often rely on the parties’ willingness to cooperate or the assistance of a local court. This difference makes the choice of legal venue a central factor for businesses seeking protection.
