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ITA 2014 Presentation

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Jordan Fowler

on 5 June 2015

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Transcript of ITA 2014 Presentation

ITA Enforcement Survey Results
United Kingdom
o Very likely that arbitral awards will be enforced within 6 months

o No respondents reported more than a year difference between a ruling and its’ enforcement

o The 9 respondents reported no barriers to enforcement

o Most were somewhat experienced with the arbitration process

o Most described the process as simple and reliable
o Speedy, reliable enforcement with generally straightforward procedures

o All over the board on substantive review

o Split opinion on cost

Russia & Ukraine
o Overall, general agreement that enforcement is complex, expensive, and time consuming. There are concerns about judicial independence.

o One responder seems to have had a very negative enforcement experience – problems with corruption.
United States
o Confident the award would be enforced

o Simple, straightforward process

o Varied timelines on enforcement

o Enforcement is very likely in this jurisdiction

o Moderately expensive to enforce

o Limited to no substantive review of arbitral award
Responders taking this survey have been involved in at least 2,000 arbitration matters that have resulted in a final or partial award

However the data provided on actual enforcement is substantially less

1. Brazil
2. Canada
3. China
4. India
5. Kazakhstan
6. Kuwait
7. UAE
8. Mexico
9. Nigeria
10. Qatar
11. Russia
12. UK
13. US
14. Venezuela

o Very likely to enforce

o Inexpensive

o Simple to moderately simple process

o Little to no substantive review of awards
o Enforcement unlikely to moderately unlikely

o Moderately expensive

o Split experience

o Enforcement likely to moderately likely

o Practitioner with more experience thinks enforcement process is more complex, more expensive, and sees more barriers to enforcement
o Seems to be confidence in enforcement

o All responses say enforcement takes at least a year

o Simple, straightforward process

o But procedural problems getting to debtor’s assets

o Little to no substantive review of awards

o Moderately expensive to enforce
o Opinion on likelihood of enforcement is split; at least one respondent felt enforcement was unlikely while others thought enforcement was "very likely"

o Complex and expensive

o Very substantive review of awards

o Unfavorable domestic legal framework for enforcement
o Limited data, but response shows that State is moderately likely to enforce awards and that the barriers include an unfavorable enforcement environment –

“Several awards either domestic or foreign international, were set aside as considered in violation of the public policy in Qatar (as not rendered in the name of H.H. the Emir of Q)"
o Limited data, but response shows that the State is moderately likely to enforce awards and that the process is somewhat complex
o Split responses as to the likelihood of enforcement and complexity as well as a somewhat lengthy enforcement process
Jurisdictions Identified in Detailed Reports on Enforcement
Responder Locations
Where Did They Come From?
European Union

EU = 98 Responses; 35.72%


6 Responses; 2.18%
25 Responses; 9.11%
Latin America
14 Responses; 5.11%
Middle East
18 Responses; 6.56%
6 Responses; 2.19%
16 Responses; 5.84%
9 Responses; 3.28%
32 Responses; 11.67%
Please continue to share the survey with peers and colleagues
• Jan Paulsson, writing in the early 1980s, claimed that over 90% of all arbitral awards issued under the auspices of the International Chamber of Commerce were complied with. (The Role of Swedish Courts in Transnational Commercial Arbitration, 2 Va. J. Int’l Law 212-213 (citing ICC reporting).

This corresponds to Rene David’s quote in 1982 that ninety percent of the arbitral agreements are complied with; ninety percent of the awards are voluntarily performed without raising the question whether they would be enforceable or not "at law." (Rene David, Arbitration in International Trade, 1982)
Where did that 90% come from?
Is it correct?
Meet our Survey Responders
In how many arbitration matters have you been involved that have resulted in a final or partial award?
Unites States
U.S. = 50 Responses; 18.25%
14 of the top 25 oil producing states are represented in the survey

• “Hopeless in a remote republic of the Federation.”
• “Corrupt judges will not grant enforcement against the local party which greases their pockets.”
• “Unfair and biased.”
• “You have to be careful with the USA as the arbitration law is not Model Law and is filled with exceptions and land mines not found elsewhere.”
• “Federal judges move only when God chooses. Inordinate delay and inattention to prompt enforcement.”
• “Still waiting for action.”
“If it weren't procedurally complex, it wouldn't be French.”
• “The filing and requirements for enforcement of an award are somewhat simple but the problem is the number of motions that the debtor can file to avoid the enforcement or the foreclosure of assets.”
• “The problem is not to get the judicial order on enforcement, but the number of resources the debtor has in order to avoid foreclosure of assets (in case of monetary awards).”
• “Courts are generally slow here due to congested docket.”
“Lawyers could create unnecessary legal bottle neck.”

“Misunderstanding by the lawyers of the relevant principles on arbitration”
• “There are different procedures for enforcement under different regimes which makes the process more complex than it should be.”
• “However this may vary when constitutional proceedings are initiated challenging the enforcement decision.”
(on speed of enforcement)
70% of respondents self-reported that 76-100% of disputes that resulted in a final or partial award were contract-based

Contract or Treaty Awards
• “It is a more a matter of how long it will take.”
(on how likely enforcement is)
• “Here is an example from India: after a decade and a half of attempting to get a 1997 ICC award recognized, the Delhi court of appeals ruled in 2013 that it was not enforceable on technical grounds. This was just the recognition stage, not yet enforcing.”
• “It is not practical to try to enforce against an Indian company... they can run you out on procedural/technical issues.”
Jurisdictions in which a responder is licensed to practice law are shown in
Contract vs. Treaty Based Disputes Represented in Survey
About 58% of global responders said that they had never handled a treaty based dispute
Statistically Significant
Where we are
Where we are headed
• “Heavily depends on the city and whether in first instance (using arbitration clause to defeat jurisdiction of local court) or court of appeals (challenge or enforcement)”

• “Court of Appeals has jurisdiction in Italy, and most are setting hearing dates 4 to 5 years from filing.”

• “Lack of judicial competence in arbitration mattters, unpredictable quality of local judges.” (on barriers to enforcement).


• “Likelihood to enforce arbitral award in Austria 100%”

• “Enforcement in Austria takes about 1 month.”

“One of the biggest challenges in enforcing is that arbitration practitioners and judges rarely have an understanding of how their judicial system compares with others.”
“My experience in enforcement of arbitral awards boils down to the conclusion that the awards eventually are enforced, but when the losing party resists, the resulting delay and costs lead the prevailing party to settle for less than the full award.”
• “This is getting tedious. I've never sought judicial enforcement or setting aside of an arbitral award.”
“Depends on how vigorously enforcement is resisted”
“Enforcement proceedings are hard fought and that drives up the costs”
Where we want to be
Number of matters
Were Paulsson and David Correct?
of ITA survey responders
agree that (based on their experience)
90% or more
of contract-based disputes were voluntarily complied with
What have we learned (so far)?
of ITA survey responders
believe that (based on experience)
60% or more
of contract-based disputes were voluntarily complied with
Remember that about
of responders reported
no experience with treaty awards
Of the roughly
with treaty-based dispute experience
. There is no clear trend as to voluntary compliance with treaty awards
~25% = Very few
~19% = Some
~15% = About half
~15% = Most
~23% = Nearly all
Full transcript