As every arbitration practitioner knows, securing a favourable arbitral award is often the culmination of months, or even years, of effort. Parties invest substantial time, money, and energy in arbitration to resolve their disputes. When an arbitral tribunal finally delivers a positive decision, it may feel like the hard work has paid off. Yet, in reality, the story seldom ends with the award itself. An arbitral award is only as valuable as a party’s ability to enforce it. Unless the prevailing side can convert the tribunal’s ruling into tangible results, the award risks being little more than costly words on paper. This is why enforcement can be seen as the “make-or-break” stage of arbitration. It is the point at which theory collides with practice, and where the true strength of the international arbitration system is put to the test.
The Global Advantage of Arbitration
One of arbitration’s greatest advantages lies in the global enforceability of its awards. Whereas national court judgments often face significant hurdles when enforced beyond their home jurisdiction, arbitral awards benefit from a broad international treaty framework that ensures their recognition and execution across borders. A national court judgment is often like a store credit valid only at the issuing shop, while an arbitral award is more akin to an internationally recognised currency that retains its value across borders.
The cornerstone is the New York Convention of 1958, one of the most successful multilateral treaties.[1] Ratified by 172 countries, it obliges national courts to recognise and enforce foreign arbitral awards, subject only to narrowly defined defences.[2] Its near-universal adoption gives arbitral awards a higher level of cross-border effectiveness than domestic court judgments.
Moreover, many jurisdictions have adopted arbitration legislation modelled on the UNCITRAL Model Law, helping to streamline enforcement procedures and promote consistency across legal systems.[3]
In addition, specialised instruments such as the ICSID Convention establish self-contained enforcement regimes, particularly for disputes between investors and sovereign States.[4]
The result is a genuinely global enforcement system in which arbitral awards can move across borders with far greater ease than most court judgments. For companies engaged in international trade and investment, this provides a decisive and often critical advantage.
The Enforcement Process
While frameworks like the New York Convention provide the legal basis, the practical process of enforcement involves several stages.
Identifying Where to Enforce
The first strategic consideration is identifying where the counterparty’s assets are located. Enforcement should be pursued in jurisdictions where the debtor maintains assets, whether bank accounts, real estate, or receivables. When those assets are scattered across different countries, creditors may need to initiate parallel enforcement proceedings to maximise recovery.[5]
Recognition of the Award
Before execution can proceed, the award must first be recognised by a court in the jurisdiction where enforcement is sought. Recognition effectively grants the arbitral award the same force as a domestic court judgment.[6] While courts, especially in New York Convention States, tend to apply a pro-enforcement approach, this step remains a necessary formality.
Resistance and Defences
The losing party may seek to resist enforcement, but the grounds for doing so are intentionally limited. Under the New York Convention, refusal is permitted only in exceptional circumstances, such as:
- The absence of a valid arbitration agreement.
- The party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings, or was otherwise unable to present its case.
- The tribunal exceeded its mandate.
- The award has not yet become binding.
- A conflict with the enforcing state’s public policy.[7]
Crucially, courts are not permitted to revisit the merits of the dispute. This safeguard preserves the finality of arbitral awards and prevents unsuccessful parties from attempting to re-litigate their case under the guise of enforcement proceedings.
Execution Against Assets
Once recognition has been granted, the award can be enforced in much the same way as a domestic court judgment. Typical methods include garnishing bank accounts, seizing real estate, intercepting revenues, or attaching shares. The precise scope of enforcement depends on local law, which dictates both the assets that may be targeted and those that are exempt from execution.[8]
Cross-Border Coordination
In complex cases, creditors may need to pursue enforcement simultaneously across several jurisdictions. Effective coordination often demands close collaboration between international arbitration counsel, local lawyers, and asset-tracing specialists to identify targets and apply consistent pressure on the award debtor.
Practical Challenges
Despite its strengths, enforcement is rarely straightforward. For instance, debtors may restructure their holdings, transfer funds, or conceal ownership through complex corporate layers. In such cases, asset-tracing and forensic investigation become indispensable.[9]
Moreover, when enforcement involves States or State-owned entities, doctrines of sovereign immunity can restrict what assets may be seized. Typically, only assets used for commercial purposes are vulnerable.[10]
Additionally, debtors may deploy delay tactics and procedural manoeuvres to frustrate enforcement, such as contesting recognition, seeking to set aside the award at the seat of arbitration, or initiating new litigation.
Finally, although the New York Convention establishes a global framework, local courts differ widely in efficiency and practice. Some jurisdictions strongly support enforcement, while others can be unpredictable or slow.
Best Practices for Maximising Results
As previously explained, enforcement faces numerous potential challenges. Nevertheless, parties can take proactive measures throughout the arbitration lifecycle to significantly enhance their prospects of successful enforcement.
First, parties should ensure that arbitration agreements are drafted clearly, remain legally valid, and are sufficiently comprehensive. Ambiguous clauses must be avoided, as they can be exploited at later stages.[11]
Also, choosing the right seat of arbitration is crucial. Selecting a seat in a pro-arbitration jurisdiction provides a strong legal framework and reduces the risk of successful set-aside applications.
Furthermore, parties should closely monitor counterparty assets, beginning the identification of potential enforcement targets early, even during the arbitration itself, so that action can be taken swiftly once an award is rendered.
In addition, where appropriate, parties should request interim measures to freeze assets before enforcement becomes necessary.[12]
Finally, enforcement often requires a multidisciplinary approach, combining arbitration specialists, local litigators, and asset recovery experts. Thus, engaging experienced counsel is of crucial importance.
Conclusion
Enforcement is not merely about securing payment; it is fundamental to the legitimacy of the arbitration system itself. Businesses turn to arbitration because it offers the promise of binding, enforceable outcomes. Without reliable cross-border enforcement, much of arbitration’s appeal would vanish. Encouragingly, the global framework has proven highly resilient. Despite inevitable challenges, the pro-enforcement stance of national courts, combined with the widespread application of the New York Convention, ensures that the vast majority of arbitral awards can be translated into tangible results,[13] providing nearly global commercial justice.
[1] Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”).
[2] https://www.newyorkconvention.org/contracting-states/contracting-states.
[3] Norton Rose Fulbright, Issues relating to Challenging and Enforcing Arbitration Awards: Grounds to refuse enforcement (August 2019), available at: https://www.nortonrosefulbright.com/en-de/knowledge/publications/ee45f3c2/issues-relating-to-challenging-and-enforcing-arbitration-awards-grounds-to-refuse-enforcement.
[4] ICSID Convention. See also N. Blackaby et al, Redfern and Hunter on International Arbitration (6th edn., 2015), paras. 11.125-11.127.
[5] See also Erdem & Erdem, Enforcement of Arbitral Awards Set Aside at the Seat of Arbitration (June 2017), available at: https://www.erdem-erdem.av.tr/en/insights/enforcement-of-arbitral-awards-set-aside-at-the-seat-of-arbitration.
[6] Aceris Law, Recognition, Enforcement and Execution in International Arbitration (8 July 2024).
[7] New York Convention, Article V.
[8] Aceris Law, Recognition, Enforcement and Execution in International Arbitration (8 July 2024).
[9] See, e.g., Commercial Litigation Forum, available at: https://www.commerciallitigatorsforum.com/litigation-directory/asset-tracing-and-corporate-intelligence/.
[10] Herbert Smith Freehills Kramer, Inside Arbitration: Risks and awards – Challenges of enforcement against states (27 September 2023), available at: https://www.hsfkramer.com/insights/2023-09/inside-arbitration-risks-and-awards-%E2%80%93-challenges-of-enforcement-against-states.
[11] New York Convention, Article V.
[12] Aceris Law, Enforcement of Interim Measures in International Arbitration (2 March 2025), available at: https://www.acerislaw.com/enforcement-of-interim-measures-in-international-arbitration/.
[13] N. Blackaby et al., Redfern and Hunter on International Arbitration (6th edn., 2015), para. 11.40.
