Arbitral interim measure applications for witness protection

In international investment arbitration practice, it is not uncommon for investors to claim that their witnesses have been intimidated by host states. Investors often apply to arbitral tribunals for interim measures to ensure that witnesses are not interfered with by host states. This article delves into the considerations and criteria that arbitral tribunals would take into account when facing such applications.

Witness intimidation

Witness intimidation refers to tactics to prevent witnesses or potential witnesses from providing evidence or persuading them to provide false testimony to tribunals through threats or inducements.

For instance, in Riahi v Iran, the investor claimed that its potential witnesses provided false testimonies favourable to the Iranian government due to intimidation and coercion by government officials.

The alleged harassment tactics included asset seizure, termination of employment, and preventing their children from going to school. Similarly, in Gerald International Limited v Sierra Leone, following the initiation of investment arbitration by the investors, the government arrested seven employees of a local subsidiary who were potential witnesses on charges of inciting riots.

Applying for interim measures

In cases of witness intimidation, investors often request interim measures from arbitral tribunals to protect witnesses from interference by host states, and to ensure the fair and smooth conduct of arbitration proceedings. In practice, arbitral tribunals typically consider the following conditions before granting interim measures:

• Prima facie jurisdiction is established;
• There is urgency;
• The measures must be necessary to prevent irreparable harm; and
• Issuing a provisional measure will be proportionate.

The third and fourth conditions are the focuses of tribunals’ consideration.

For example, in Ipek v Turkey, the investors sought interim measures from the tribunal, requesting Turkey to suspend criminal proceedings against potential witnesses and to refrain from initiating further criminal charges against other targeted individuals.

When evaluating the request, the tribunal noted that “irreparable harm” requires a showing of material risk, or serious or grave damage, rather than harm that is literally “irreparable”.

Additionally, the tribunal stressed the need to strike a balance between the parties’ duties of good faith and the goal of not exacerbating the dispute, while minimising interference with the host state’s exercise of public interest rights.

After considering the specifics of the case, including criminal charges against key witnesses’ mothers, sisters and wives by the host state, as well as criminal charges against several individuals who were expected to testify in the arbitration or possessed relevant evidence, and the potential use of evidence obtained from domestic criminal proceedings by the host state, the tribunal found that the ongoing domestic criminal proceedings were likely to unfairly prejudice the investors in presenting their case in investment arbitration.

Consequently, the tribunal directed Turkey to suspend local criminal proceedings and refrain from initiating criminal prosecutions against targeted individuals. The tribunal clarified that this provisional measure only suspended domestic litigation proceedings, and Turkey could still pursue criminal proceedings against individuals outside the scope of the targeted individuals.

It should be noted that the threshold for applying for interim measures is high, requiring investors to provide sufficient evidence demonstrating that host states have engaged in conduct that may interfere with witnesses, and that such conduct could impact the fairness of the investment arbitration process.

Currently, cases where interim measures are granted are primarily related to criminal measures taken by host states. For instance, in Quiborax v Bolivia, the tribunal, considering the potential impact of criminal proceedings on potential witnesses, decided that the host state should suspend domestic criminal proceedings.

Similarly, in Lao Holdings v Lao, the tribunal found that the relevant criminal investigation directly targeted individuals and issues involved in the arbitration, significantly hindering the plaintiff’s preparation and presentation of their case. Therefore, the tribunal decided to suspend the criminal proceedings.

In many cases, tribunals have denied interim measures due to insufficient evidence. For example, in Odyssey Marine Exploration v Mexico, the tribunal dismissed the investors’ application for interim measures, stating that anonymous phone calls were insufficient to prove Mexico’s involvement in threatening witnesses.

The success of interim measure applications often hinges on specific facts of a case, whether an investor can sufficiently prove risks faced by witnesses, and the challenges posed to the fairness of the arbitration by actions of a host state.

Faced with investors’ applications for interim measures, arbitral tribunals often take into account multiple factors in an effort to balance between protecting witnesses, maintaining the fairness of arbitration proceedings and respecting host states’ exercise of public interest rights.

Yang Xueyu is a managing partner and Dang Hongwei is an associate at Hui Zhong Law Firm