Starting in January 2016, Moldovan authorities took various measures to block shares in the Bank. On 2 March 2016, the NBM issued Decision No 43 whose effect was in summary as follows:5
(a) In paragraph 1, the Claimant and 19 other shareholders in the Bank (the Decision 43 Investors) were found to have been acting in concert in respect of the Bank and to have acquired a "substantial share" in the capital of the Bank without NBM's permission.
(b) In paragraph 2, all the Decision 43 Investors were to be notified within five days of a suspension of virtually all of their shareholder rights.
(c) In paragraph 3, the Decision 43 Investors were required to dispose of their shares in the Bank within a three-month period (ie before 2 June 2016), failing which their shares would be "cancelled", pursuant to Article 15(3) of the Law on Financial Institutions.
By its application the Claimant seeks that Decision 43 and Decree 15/2 be "stayed", that is to say suspended, pending the final resolution of the dispute.13 The Claimant has further explained that it seeks that:
(a) Decision 43 be stayed in respect of its two operative provisions (paragraphs 2 and 3);14 and
(b) both Decision 43 and Decree 15/2 be stayed in respect of all of the Decision 43 Investors.15
As noted, the Claimant submitted a Notice of Dispute to the Respondent on 16 May 2016,20 and the six-month amicable-resolution period (the Cooling-off Period) has not yet expired. The Claimant submits that this does not prevent it from seeking interim measures by an Emergency Arbitrator on the grounds that:
(a) the Cooling-off Period applies only to commencement of the main arbitration proceedings but not to emergency interim-measures proceedings;21
(b) as the Respondent has failed to engage with the Claimant's attempts to resolve the dispute amicably, the Claimant is thus entitled to disregard the Cooling-off Period;22 and
(c) the Cooling-off Period is a mere procedural requirement which is directory and discretionary in nature, such that non-compliance with it does not affect a tribunal's jurisdiction in circumstances where negotiations are obviously futile.23
To recall, Article 10 of the Treaty provides in material part as follows:28
1. Any dispute between one Contracting Party and an investor of the other Contracting Party, which arose in relation to an investment, including disputes regarding the amount, conditions or procedure for the payment of compensation under Article 6 of the Treaty, or procedure for the payment of compensation under Article 8 of this Treaty, shall be subject to a written notice accompanied by detailed comments which the investor shall send to the Contracting Party, which is a party to the dispute. Parties to the dispute shall endeavour to resolve such a dispute by amicable means where possible.
2. If the dispute is not resolved in such a manner within six months from the date of the written notice referred to in paragraph 1 of this article, it shall be submitted for consideration to:
b) the Arbitration Institute of the Stockholm Chamber of Commerce...
This provision is to be given effect to pursuant to the ordinary and natural meaning of its terms, in the light of their object and purpose within the context of the Treaty.29
The Emergency Arbitrator considers that the question is whether it may be said that, on a prima facie basis, that the 2010 SCC Rules were within the reasonable contemplation of the Contracting Parties to the Treaty. By the time the Treaty entered into force following ratification by the two Contracting Parties, in 2001, the 1999 SCC Rules had come into effect. The 1999 text included a provision entitled "Effectiveness", which read as follows:
These Rules enter into force on 1 April 1999 and will replace the [1988 SCC Rules]. These Rules will be applied to any arbitration commenced on or after this date, unless otherwise agreed by the parties.
As just noted, the 2010 SCC Rules contain the same intertemporal interpretative rule.
By contrast, Article 32 does not spell out the requirements that must be satisfied in order to issue interim measures; nor does Appendix II. These requirements are, nevertheless, substantially uncontroversial, whether one applies Swedish law (as the law of the seat of the present Appendix II proceedings)37 or international law (as the law which governs the Treaty claims asserted by the Claimant). Articles 17-17A of the UNCITRAL Model Law on International Commercial Arbitration (2006) and Article 26 of the UNCITRAL Arbitration Rules 2010 helpfully codify these requirements.38 Article 26 of the UNCITRAL Rules reads in material part as follows:
2. An interim measure is any temporary measure by which, at any time prior to the issuance of the award by which the dispute is finally decided, the arbitral tribunal orders a party, for example and without limitation, to:
(a) Maintain or restore the status quo pending determination of the dispute;
(b) Take action that would prevent, or refrain from taking action that is likely to cause,
(i) current or imminent harm or (ii) prejudice to the arbitral process itself;
(c) Provide a means of preserving assets out of which a subsequent award may be satisfied; or
(d) Preserve evidence that may be relevant and material to the resolution of the dispute.
3. The party requesting an interim measure under paragraphs 2 (a) to (c) shall satisfy the arbitral tribunal that:
(a) Harm not adequately reparable by an award of damages is likely to result if the measure is not ordered, and such harm substantially outweighs the harm that is likely to result to the party against whom the measure is directed if the measure is granted; and
(b) There is a reasonable possibility that the requesting party will succeed on the merits of the claim. The determination on this possibility shall not affect the discretion of the arbitral tribunal in making any subsequent determination.
The "essential justification" of interim measures has been described by President Jiménez de Aréchaga of the International Court of Justice as being that—
the action of one party "pendente lite" causes or threatens a damage to the rights of the other, of such a nature that it would not be possible fully to restore those rights, or remedy the infringement thereof, simply by a judgment in its favour.44
The Claimant has offered a number of cogent bases on which Occidental may not be apposite in the present case. It is also true that other tribunals have affirmed the availability of relief consisting in "measures concerning performance or injunction" as a matter of principle;52 although in practice such relief is ordered rarely, as a complement to monetary compensation,53 or as an alternative to compensation at the election of the state,54 or where compensation will not amount to full reparation.55
Ultimately, however, the question in the present case is a different one from that which was confronted by the tribunals cited above. The question here is whether the harm that the injunctions sought by the Claimant seek to avert is or is not "adequately reparable by an award of damages". The answer to that question is straightforward. Taking each of the Claimant's sources of actual or imminent harm:
• Suspension of Shareholder Rights: The harm that the Claimant says it has suffered to date, and will continue to suffer until it has finally divested itself of its shares in the Bank, is purely financial. It is the economic harm suffered by the owner of an asset from its inability to control, utilize, or derive benefits from that asset. The asset being purely economic in its nature - ie, shares in a financial institution (whose shares are, moreover, listed)56 - it is unsurprising that the harm that has occurred and will continue to occur is also purely economic.
• Divestiture of Shares: The same applies to a future loss of the Claimant's shares by way of divestiture; that harm, too, is purely economic in nature. "At the centre", as the Claimant puts it, of its case is the protection of an investment consisting in shares of a present nominal value of approximately US$7 million.57
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