The following Arbitration guidance note Produced in partnership with Elaine Wong and Gitta Satryani of Herbert Smith Freehills LLP provides comprehensive and up to date legal information covering:
This Practice Note considers the availability of security for claims (or security for claim or security for a claim) in international arbitration proceedings.
Security for claim is an interim measure that allows an applicant (ie the claimant or the respondent in respect of its counterclaim) to secure, in advance of a final arbitral award, the amount that it is claiming against the opposing party (the respondent). Security for claim is intended to ensure the payment of a final award or the availability of funds against which a final award may be enforced.
As a matter of practical strategy, security for claim is usually sought when an applicant has real reasons to believe that the opposing party may be unwilling and/or unable to satisfy any award made against it at the end of the arbitration.
If granted, the opposing party must provide security for the sum ordered for the duration of the arbitration or for such other time that the order may prescribe. Security for claim may be provided by, for example:
payment of the sum ordered into an escrow account (ICC Case No 7536, 11(1) ICC Ct. Bull. 23 (2000), where payment of a specified deposit into escrow was required—not reported by LexisNexis® UK)
a bank guarantee, or
the sequestration of the specific property in dispute (ICC
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