USA Law and Practice Contributed by: Matthew H. Kirtland, Timothy Tyler, Katie Connolly and Taylor LeMay, Norton Rose Fulbright
6. Preliminary and Interim Relief 6.1 Types of Relief
5.5 Breach of Arbitration Agreement Parties that commence court proceedings in breach of an arbitration agreement will likely be met by the opposing party with a motion to stay the court litiga - tion and compel arbitration. Courts will determine the threshold question of arbitrability (unless validly del - egated to the arbitrators). If there is a valid arbitration agreement, courts will not hesitate to stay the litigation and compel arbitration. The FAA does not allow an immediate appeal from a court decision that compels arbitration requiring the arbitration to proceed and conclude before appeal, nor for a party to request permission to appeal. How - ever, the FAA allows immediate appeal from a decision refusing to compel arbitration and stay litigation. In this case, a party can obtain appellate court review of the first instance court’s ruling before having to pro - ceed with litigation. 5.6 Jurisdiction Over Third Parties The FAA does not address whether third parties or non-signatories are bound by arbitration agreements. Generally, only a party to an agreement is bound by or may enforce the agreement. However, US courts have enforced arbitration agree - ments against non-signatories (or allowed non-signa - tories to enforce arbitration agreements) in the follow - ing circumstances: • waiver and estoppel; • piercing the corporate veil; • assumption; • alter ego; • incorporation by reference; • third-party beneficiary theories; • assignment; • agency principles; • closely affiliated persons or entities;
The FAA does not contain provisions regarding interim measures. However, most institutional rules, which parties may incorporate into their agreements, empower a tribunal to issue interim measures. These include: • injunctions for the preservation of evidence or assets; • security for costs; and • temporary restraining orders. These rules, however, require the arbitrators to pro - vide both parties an opportunity to be heard and do not usually permit the type of ex parte restraining orders often granted by US courts. US courts have treated interim measures orders issued by the tribunals as enforceable final awards under the FAA, subject to confirmation and enforce - ment, where the interim relief is necessary to prevent the final award from becoming meaningless. 6.2 Role of Courts As discussed in 6.1 Types of Relief , US courts will confirm and enforce interim relief orders issued by an arbitral tribunal in limited circumstances. Alternatively, a party may seek interim relief from a court prior to constitution of the tribunal without waiv - ing its right to insist that its claims be arbitrated. US courts are empowered to issue preliminary injunctions and attachments of property as well as ex parte tem - porary restraining orders. While the FAA does not address this issue, emergency relief from an arbitrator is provided for by most insti - tutions that conduct arbitrations in the United States including the AAA, ICC, CPR and JAMS. Emergency decisions are viewed as interlocutory as they can be later altered upon formation of the tribunal. 6.3 Security for Costs The FAA is silent on this issue, but federal district courts have the equitable power to require plaintiffs to post security for costs. This is especially common
• intertwined claims; and • trade custom and usage.
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