Recognition and enforcement of foreign arbitral awards has long been one of the central areas of international commercial arbitration. However, while the regime governing the recognition of final arbitral awards is clearly regulated through international instruments and national legislation, the status of decisions on interim measures remains the subject of theoretical debate and inconsistent practice.

It is precisely here that the distinction between the traditional and modern approaches to arbitration comes to the fore, reflected in the following question: can interim measures issued by foreign arbitral tribunals be recognized and enforced in the same manner as final arbitral awards, or do the legal and procedural nature of interim measures necessarily preclude such treatment?

1. Normative Framework and Conceptual Dilemma

The conventional framework of international arbitration, primarily contained in the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, proceeds from the concept of an “arbitral award,” but without precisely/concretely defining this term. Namely, from the perspective of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, the term “arbitral award” encompasses not only awards rendered by arbitrators appointed for particular cases, but also those rendered by permanent arbitral bodies to which the parties have submitted.

In practice, this concept has traditionally been interpreted as an award that finally resolves a dispute between the parties. Such a traditional interpretation is justified because it finds its legal basis in the provision of the New York Convention which expressly stipulates that the Convention applies to the recognition and enforcement of arbitral awards in disputes between natural or legal persons rendered in the territory of a State other than the State where recognition and enforcement of the awards is sought.

Having regard to such normative wording, from which it can clearly be established that the recognition and enforcement of foreign arbitral awards applies only to those awards arising from a dispute between the parties to the arbitration (and which finally/meritoriously and permanently resolve a particular disputed factual and legal issue), it follows that decisions on interim measures, as acts of a temporary and predominantly procedural nature, have remained outside the scope of this conventional regime.

Their primary function – the preservation of the debtor’s existing assets through securing the creditor’s claim or preventing irreparable harm from occurring – was not accompanied by appropriate legal mechanisms for international recognition.

This approach reflected a deeper conceptual dilemma, namely: is the criterion for the recognition and enforcement of foreign arbitral awards reflected in the formal classification of the act (as an arbitral award) or in the substantive characteristics of the arbitral award (finality/merits and enforceability)?

• Traditional Approach: Limitation to Final Arbitral Awards

In legal systems that have not embraced more recent tendencies, including the law of the Republic of Serbia, a restrictive approach prevails. The above approach has resulted in courts being reluctant when it comes to the recognition and enforcement of foreign arbitral awards ordering interim measures.

In support of this practice, courts rely on several key arguments:

• interim measures do not have the character of finality/res judicata;
• they do not resolve the dispute between the parties to the arbitration on the merits, but rather constitute one of the means of securing the claimant’s/creditor’s claim;
• they do not produce permanent legal effects, but are temporary and ancillary in nature;
• they are subject to modification or revocation by a sole arbitrator and/or arbitral tribunal;
• they are not amenable to enforcement in the classical sense.

Consequently, such decisions are not considered “arbitral awards” within the meaning of the legal regime established by the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

In this regard, the Arbitration Act expressly directs the parties to seek protection before domestic courts by submitting a motion for the granting of an interim measure and applying the rules prescribed by the Enforcement and Security Act, even where the arbitration agreement relates to arbitration seated in another state.

• Turning Point: UNCITRAL Model Law on International Commercial Arbitration (2006)

A significant turning point in international arbitration practice came with the adoption of the 2006 amendments and supplements to the UNCITRAL Model Law on International Commercial Arbitration, which introduced a special regime for interim measures.

In this respect, Article 17H of the Model Law expressly provides:

An interim measure issued by an arbitral tribunal shall be recognized as binding and, unless otherwise provided by the arbitral tribunal, enforced upon application to the competent court, irrespective of the country in which it was issued, in accordance with the provisions of article 17I.

Meanwhile, Article 17I of the Model Law sets out the grounds for refusing recognition or enforcement of foreign arbitral decisions on interim measures.

In this way, foreign arbitral decisions on interim measures were, for the first time, explicitly incorporated into the system of international recognition, with clearly defined grounds for refusal (Article 17I), which largely follow the logic of the New York Convention.

This reform has a twofold purpose and significance:

• normative – because it fills a legal gap in international arbitration law;
• functional – because it enables more effective protection of the parties’ rights in cross-border disputes.

• Comparative Practice: Affirmation of the Modern Approach

Numerous legal systems (approximately 100 States) have adopted a positive approach to the 2006 UNCITRAL Model Law on International Commercial Arbitration, by enacting national arbitration laws that rely to a significant extent on the solutions and rules contained in the 2006 UNCITRAL Model Law on International Commercial Arbitration, thereby also developing a practice of recognizing foreign arbitral decisions on interim measures.

Thus, in legal systems such as Singapore, Hong Kong, Canada, and Australia:

• courts recognize interim measures as binding;
• they limit their review to procedural and formal requirements (in the spirit of the Model Law);
• where necessary, they adapt interim measures to the domestic legal framework;
• they ensure their compulsory enforcement;
• they are guided by the principles of the effectiveness of arbitration, rather than by reviewing decisions arising from arbitration;

Accordingly, arbitral proceedings acquire full procedural effectiveness, while decisions on interim measures cease to be a “weak point” of international arbitration.

• Critical Review: Advantages and Disadvantages of Both Approaches

Based on the normative and comparative solutions outlined above, it can be concluded that the approach to the recognition and enforcement of interim measures issued by arbitral tribunals lies between two opposing models – the traditional and the modern (functional) approach. Each of these models is based on different legal values and procedural priorities.

• Advantages of the Traditional Approach

The traditional approach, on which our Arbitration Act is also based, and which ties recognition and enforcement exclusively to final arbitral awards, has certain systemic advantages.

First and foremost, it provides a higher degree of legal certainty and predictability, since enforcement is linked to acts that have the character of finality and res judicata. This avoids a situation in which decisions that are subject to frequent modification or revocation would be enforced.

Furthermore, this approach enables a stronger supervisory function of domestic courts. In other words, the court retains an active role in assessing whether the requirements for granting interim measures under domestic law have been met, thereby protecting the integrity of the national legal order.

Another significant advantage lies in the protection of the legal institution of public policy. This is because interim measures often interfere with property rights, restrictions on disposition, or the business activities of the respondent/debtor, and the domestic court has the possibility of preventing their effects if they are incompatible with the fundamental principles of domestic law.

Finally, the traditional approach contributes to the procedural coherence of enforcement proceedings, since all security measures are ordered and implemented in accordance with the uniform rules of domestic enforcement law, thereby avoiding conflicts between different legal regimes.

• Disadvantages of the Traditional Approach

Despite the aforementioned advantages, the traditional approach has significant limitations under contemporary conditions of international commercial/economic activity.

First and foremost, it leads to duplication of proceedings, because a party that has already obtained an interim measure before an arbitral tribunal must initiate a separate proceeding before a domestic court in order to obtain identical or similar protection. The above results in a loss of time and an increase in costs, which may be of decisive importance in situations where urgency is crucial (e.g. the risk of disposal of assets).

Additionally, one of the key disadvantages is the diminished effectiveness of arbitration as an alternative means of dispute resolution. Namely, if decisions of an arbitral tribunal do not have direct legal effect, the parties’ confidence in arbitration as an effective instrument for resolving disputes may be significantly undermined.

Furthermore, there is a risk of conflicting decisions, since the domestic court is not bound by the views of the arbitral tribunal, which may result in legal uncertainty.

Finally, the traditional approach may lead to forum shopping, as parties may choose jurisdictions in which they can more easily obtain protection through the courts, thereby disrupting the balance between arbitration and judicial protection.

• Advantages of the Modern (Functional) Approach

The modern approach, inspired by the solutions of the 2006 UNCITRAL Model Law on International Commercial Arbitration, proceeds from the need to ensure the full procedural effectiveness of arbitration.

Its key advantage lies in the speed and operational effectiveness of protection. Interim measures issued by an arbitral tribunal may be directly recognized and enforced, thereby ensuring prompt and effective protection of the parties’ rights.

Furthermore, this approach contributes to the unity of proceedings, as it avoids parallel arbitration and court proceedings concerning the same legal matter. It is particularly significant that the modern model strengthens party autonomy, since it recognizes the full legal force of decisions issued by the bodies they themselves have chosen.

This approach also promotes the international harmonization of arbitration law, as it relies on uniform rules and standards, thereby increasing legal certainty in cross-border transactions.

At the macro level, it also contributes to the attractiveness of a particular jurisdiction as an arbitral seat, since legal systems that enable the effective enforcement of interim measures become more competitive in international arbitration.

• Disadvantages of the Modern (Functional) Approach

In addition to the aforementioned advantages, it should nevertheless be noted that the modern approach is not without certain risks and unresolved issues.

One of the principal challenges concerns the limited control over the substance of interim measures. Courts, in accordance with the UNCITRAL Model Law, do not have the authority to review the merits of the decision, which may result in the enforcement of measures that are potentially problematic from a legal or factual standpoint.

Furthermore, the issue arises of the compatibility of foreign interim measures with the domestic legal system. Interim measures issued within the framework of one legal system do not necessarily have to be readily compatible with the procedural framework of another State/legal system. A particular problem is also the protection of third parties who did not participate in the arbitral proceedings but may be affected by the enforcement of an interim measure.

There is also a risk of procedural abuse, as parties may attempt to obtain favorable interim measures in arbitration with a view to subsequently enforcing them in other states.

Finally, the question of constitutional-law limitations may also arise, particularly with regard to the right to a fair trial and judicial protection, where enforcement is based on a decision that has not undergone full judicial review.

• Instead of a Conclusion

The traditional approach, which ties recognition and enforcement exclusively to final arbitral awards, provides a higher degree of legal certainty, stronger control by domestic courts, and protection of the basic and fundamental principles of the national legal order. However, at the same time, such an approach reduces the effectiveness of arbitration, leads to duplication of proceedings, and may defeat the purpose of interim measures as an instrument of urgent protection.

On the other hand, the modern approach, affirmed through the solutions contained in the 2006 UNCITRAL Model Law on International Commercial Arbitration, proceeds from the need to ensure the full procedural effectiveness of arbitration. It enables the rapid and effective recognition and enforcement of interim measures, strengthens party autonomy, and contributes to the international harmonization of arbitration law, but at the same time raises issues concerning limited judicial review, the protection of public policy, and compatibility with domestic legal systems.

It may therefore be concluded that the modern approach represents the dominant direction in the development of international arbitration, but its application requires careful balancing between the effectiveness of arbitration and the preservation of fundamental procedural and constitutional safeguards.

For the legal system of the Republic of Serbia, this issue remains open. Any potential alignment with the solutions of the Model Law would represent a step toward modernizing arbitration law and strengthening legal certainty in international business relations, as well as further consolidating the position of the Republic of Serbia as a State attractive to foreign capital, i.e. investment.

Until then, case law in the Republic of Serbia remains consistent with the following position:

Foreign interim measures issued by institutional or ad hoc arbitrations are not recognized; rather, their effects are achieved indirectly – through the conduct of security proceedings before domestic courts.