Examining ‘Necessity’ of Provisional Measures in Investor-State Arbitrations

In the context of investor-state arbitrations, an important factor determining the grant of provisional or interim measures is that of ‘necessity’ to prevent irreparable harm or substantial harm that may likely be caused to the requesting party pending the final award. Through an analysis of old and new decisions, this paper delves into the development of this criterion, the threshold of proof required for it, and the varying interpretation given it by ICSID and UNCITRAL tribunals. The majority of ICSID tribunals follow a strict approach, i.e., assessment of risk of irreparable harm not adequately compensable, for verifying the existence of necessity for grant of measures. UNCITRAL tribunals, on the other hand, largely take a lenient approach, i.e., assessment of risk of material or substantial harm that may be remediable later, warranting grant of measures to protect the requesting party from gross inconvenience. Irrespective of the approach followed, tribunals apply either the‘balance of probabilities’ threshold or a ‘heightened burden of proof’ threshold, depending on the nature of specific measures requested, for the satisfaction of necessity. It should be noted, however, that despite their different approaches overall, a few ICSID and UNCITRAL tribunals’ decisions converge towards a more nuanced and flexible assessment of necessity.