Primary Undertaking in Damages and its Cause: Criteria for Compliance

Abstract

Counter interim measures in the arbitration process protect the property interests of the applicant party. They provide the recovery of provisional expenses. This research identifies the criteria for the counterclaim provided by the plaintiff in order to compensate for possible provisional expenses. By presenting counter-undertaking in damages, the plaintiff increases the chances of basic interim measures to secure the claim because that way the plaintiff guarantees their proportionality. By demanding counter-undertaking in damages from the plaintiff, the defendant or other interested parties, on the contrary, seek to raise doubts about the proportionality of the measures taken to secure the claim. As a result, they have to prove the likelihood of the plaintiff losing the case, as well as the likelihood of harm from the interim measures taken. The presentation and reclamation of counter-undertaking in damages is a procedural mechanism based on the adversarial nature and autonomy of will. Thus, the right to reclaim the primary counter-undertaking on its own initiative should be excluded from the court. The primary counter-security is designed to guarantee the compensation of expenses. Therefore, the authors justified the possibility of using various ways to secure a tort obligation for these purposes, not limited to an independent guarantee. The article describes the application and refund procedure for money deposited by the applicant to the court’s deposit account as primary counter-undertaking in damages. As a result, the criteria that the primary counter-undertaking in damages include the security period, the amount, and the economic profitability. These criteria were determined based on the unique tools for each legal way of securing obligations.

Keywords

• interim measures
• counter-collateral
• primary counter-collateral
• security for a claim
• surety
• independent guarantee
• bank guarantee