Originally from Dispute Resolution Journal

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?