Post-Award Experience in International Commercial Arbitration
Naimark, Richard W., Keer, Stephanie E., Dispute Resolution Journal
Those involved in international arbitration often wonder "what happens after the case is completed?" Is there voluntary compliance with the award? Or is there a court battle over enforcement of the award? And if so, how often do the parties end up in court post-award? Since there is no unified system of tracking what happens after an arbitration award is issued, no one can be sure what the post-award landscape looks like. This article is the first attempt to gather data about this subject. It reports on the experience of a number of actual participants in international arbitration who responded to a survey sent by researchers at the Global Center for Dispute Resolution Research.
In recent years, international commercial arbitration has shown significant growth in both numbers of cases and as a focus for business people and lawyers around the world.1 The attributes of arbitration that provide an impetus for growth are multivariate, including party autonomy, speed, economy, the pool of available arbitrators, choice of applicable law, consistency, avoidance of local courts, and finality. There seems to be a very broad international discomfort with the prospect of utilizing the court system of one's business partners in the event of a dispute. So clearly, there is a strong element of electing out of the formal legal systems and into an arbitration constructed by the parties.
Yet, once the parties to a dispute conduct an arbitration, and an award is rendered, little is known empirically about compliance with the award. Once an award is issued, what is the record of compliance and the variations that may occur? Under the New York Convention2 and the Panama Convention,3 a properly issued award is enforceable in local courts. However, in fact, once the award has been rendered, are parties finding themselves in court to enforce or contest the award? And if so, what is the result? Is there voluntary compliance with the award? Is there continued legal scuffling in the time following the award? Are the parties ultimately finding themselves in court anyway, even though they have chosen to bypass the court system by use of arbitration? And if the parties do wind up in court, post award, what is the nature of the activity? In that event, how extensive is the court related activity?
Clearly the answers to these questions will impact the dispute-handling goals of the parties, in terms of speed, cost, and efficacy. This study is the first of which we are aware which attempts to put some specificity on the broad experience of a number of arbitration participants.
It is worth noting at the outset that there are some limitations on the applicability of the data: The sample is a non-random sample in that it includes only the data for those parties to arbitrations who agreed to answer our questionnaire. Motivations to answer for either positive or negative reasons, it could be argued, may skew the total results, making evaluations of the relative percentages of various categories suspect. Therefore we make few conclusions as to the overall rates of compliance or non-compliance with the award and instead look primarily at the sub-sets of the various "tracks" the case might take to provide some analysis on that scale. Note also that the sample is taken from 205 international commercial arbitrations conducted through the ICDR/AAA from January 1999 to December 2002, and the data was collected over a four-month period from February 2003 to May 2003. Presently there is no comparative data for ad hoc cases, or, most significantly, for cases which only utilized the court system. That would be the ultimate comparison of results, since, as previously noted, arbitration is frequently utilized to bypass the court experience.
In spite of these limitations, we think the data present an intriguing set of insights, a peek under the tent, if you will, and a host of new questions for exploration.
The questionnaire was designed from a flow chart we created which mapped out a variety of post-award "tracks" the case might take. …