Page 93 - M & A Disputes

Interim or Conservatory Relief

The rules of nearly all institutions provide for interim or conservatory relief. Article 26 of the
UNCITRAL Arbitration Rules provides that a neutral may, at the request of a party, grant any interim
measures, inter alia, to preserve the status quo, prevent imminent harm or prejudice to the process, pre-
serve assets, or preserve evidence. The ICDR, the ICC ICA, and the LCIA rules provide for similar in-
terim relief or security. Article 21 of the ICDR’s International Dispute Resolution Procedures allow for
injunctive relief and measures to protect or conserve property. Article 23 of the ICC ICA’s Rules of Ar-
bitration permit the neutral to require appropriate security and grant any interim or conservatory meas-
ure deemed appropriate. Article 25 of the LCIA Arbitration Rules allow interim and conservatory
measures.

Damages in International Arbitration

International arbitration is a form of private dispute resolution concerning a contract between two or
more parties that has an international element. The final award is determined by an arbitral tribunal act-
ing as a court of law in accordance with standards and procedures chosen by the parties involved in the
dispute, as reflected in their agreement. The damage theory and basis for the damage calculation may be
provided for in the agreement. If no provision for damages is included in the agreement, then the appli-
cable law will control. In any case, the damages should be appropriate for the arbitral tribunal and al-
lowed under the applicable laws.

Punitive Damages

Punitive damages are commonplace in the United States but are disfavored in most other jurisdictions.
Therefore, unless the contract explicitly calls for punitive damages or the application of the laws of the
United States, it is unlikely that an arbitrator or neutral sitting in a foreign country (or applying the sub-
stantive laws of a foreign country) will grant the prevailing party punitive damages.

In fact, Article 28 of the ICDR’s International Dispute Resolution Procedures states that "[u]nless the
parties agree otherwise, the parties expressly waive and forego any right to punitive, exemplary or simi-
lar damages unless a statute requires that compensatory damages be increased in a specified manner."
The UNCITRAL and LCIA rules do not even mention punitive damages. As a result, should a party be-
lieve that it would want the option of seeking punitive damages, it should make a specific allowance for
punitive damages in the acquisition agreement.

Appeal and Enforcement

For better or worse, one aspect of international arbitration is the limited right of appeal. The rules of
most institutions expressly provide that every award is binding on the parties. For example, Article 28 of
the ICC ICA’s Rules of Arbitration provide that every award "shall be binding," and it also specifies that
the parties are "deemed to have waived their right to any form of recourse." Similarly, Article 26.9 of the
LCIA Arbitration Rules state that "the parties also waive irrevocably their right to any form of appeal,
review or recourse to any state or other judicial authority." See also, Article 27 of the ICDR’s Interna-
tional Dispute Resolution Procedures that states that an award is "final and binding."

Once an award has been entered, however, a party may still need to enforce that award. Arbitration
awards that comply with the Convention on the Recognition and Enforcement of Foreign Arbitral
Awards generally receive international recognition and enforcement; however, there are notable excep-

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