The 2008 International Arbitration Study continues to explore the attitudes and practices of corporations, this time on recognition and enforcement of arbitral awards and settlement in the context of arbitration. The 2008 Study summarises data from 129 major corporations with long time experience in international arbitration, from Europe (40% of the participating corporations), North America (30%), Central and South America (11%), Asia and Pacific (15%) and Africa (4%). Apart from corporations, this Study explores the experience and perceptions of Arbitration Institutions.
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- International Arbitration remains companies’ preferred dispute resolution mechanism for cross-border disputes. 88% of the participating corporations have used arbitration and 86% of awards have been rendered by arbitration institutions;
- There is a high degree of satisfaction with the arbitration process. The enforceability of arbitral awards, the flexibility of the procedure and the depth of expertise of arbitrators are still seen as the major advantages of arbitration;
- Corporations often settle their dispute before or after an arbitral award is issued;
- Settlement before an arbitral award most frequently occurs before the first hearing in the arbitration proceedings and it is frequently driven by parties’ desire to preserve their working business relationship. Other factors influencing settlement are a weak position in the case and a desire not to incur excessive time and costs before the dispute is resolved;
- There is a high degree of compliance with arbitral awards. 84% of the participating corporate counsel indicated that, in more than 75% of their arbitration proceedings, the non-prevailing party voluntarily complies with the arbitral award;
- 40% of the participating corporations negotiated a settlement after the arbitral award was rendered in order to avoid the time and costs involved in embarking on recognition, enforcement and execution proceedings in a foreign jurisdiction;
- Most corporations are able to enforce arbitral awards within one year and usually recover more than 75% of the value of the award;
- Most participating corporations revealed no major difficulties in achieving recognition and enforcement of their arbitral awards. Where difficulties were encountered, they usually related to the circumstances of an award debtor, typically lack of assets or inability to identify relevant assets;
- Corporations are the main users of international arbitration. 75% of the arbitration proceedings involved private corporations only;
- Less than 15% of enforcement proceedings relate to arbitral awards against states or state entities and majority of the participating corporations had experienced no significant difficulties in enforcing awards against states or state enterprises;
- Arbitration institutions do not have a system of monitoring their arbitral awards. Only 29% of arbitration institutions keep track of their arbitral awards.