Chapter 14 - § 14.3 • THE POWER OF ARBITRATORS TO GRANT INTERIM|PROVISIONAL RELIEF

• Jurisdiction: Colorado

§ 14.3 • THE POWER OF ARBITRATORS TO GRANT INTERIM/PROVISIONAL RELIEF

§ 14.3.1—Generally

FAA

The FAA does not provide for an arbitrator to enter interim or provisional relief. However, the courts have consistently recognized the inherent power of the arbitrator to render interim awards.¹⁸

CRUAA

The CRUAA follows the common law and expressly provides for provisional or interim remedies to be ordered by the court or the arbitrator. Specifically, C.R.S. § 13-22-208 (2016) provides:

(1) Before an arbitrator is appointed and is authorized and able to act, the court, upon motion of a party to an arbitration proceeding and for good cause shown, may enter an order for provisional remedies to protect the effectiveness of the arbitration proceeding to the same extent and under the same conditions as if the controversy were the subject of a civil action.

(2) After an arbitrator is appointed and is authorized and able to act:

(a) The arbitrator may issue such orders for provisional remedies, including interim awards, as the arbitrator finds necessary to protect the effectiveness of the arbitration proceeding and to promote the fair and expeditious resolution of the controversy, to the same extent and under the same conditions as if the controversy were the subject of a civil action; and

(b) A party to an arbitration proceeding may request the court to issue an order for a provisional remedy only if the matter is urgent and the arbitrator is not able to act timely or the arbitrator cannot provide an adequate remedy.

(3) A party does not waive a right of arbitration by making a motion under subsection (1) or (2) of this section.

There are few reported cases applying this provision. However, a New Jersey Court applied this provision to a request to the arbitrator to appoint a receiver.¹⁹ The court granted a motion to compel arbitration, stayed the civil action, and dismissed the action as to the individual defendants. Thereafter, the defendant requested the arbitrator to appoint a receiver for the plaintiff, asserting the plaintiff was wasting its assets and endangering the defendant's ability to collect on its monetary claims. The arbitrator ruled that he had authority to appoint either a statutory or custodial receiver, but deferred deciding whether to exercise that authority.

The plaintiff returned to the court seeking an order barring the arbitrator from creating any receivership. The court considered the AAA rules that were incorporated into the parties' agreement. Then AAA Rule R-34(a) and (c) provided:

(a) The arbitrator may take whatever interim measures he or she deems necessary, including injunctive relief and measures for the protection or conservation of property and disposition of perishable goods.

. . .
(c) A request for interim measures addressed by a party to a judicial authority shall not be deemed incompatible with the agreement to arbitrate or a waiver of the right to arbitration.

Next, the court considered what in Colorado would be § 208 of the CRUAA and reviewed the many decisions considering the comprehensive role and duties of a receiver, functions that traditionally are reserved to the court.

A reasonable interpretation of the parties' contract does not support the proposition that plaintiff agreed to submit governance to the control of a receiver answerable, in turn, to an arbitrator whose awards are almost entirely unreviewable in court.²⁰

The court expressed doubt as to whether an arbitrator could ever be empowered by contracting parties to appoint a receiver. However, the court decided that issue because it found that...