Why are we seeing an increasing trend in work relating to the enforcement of awards?

The phenomenon of businesses failing to pay their judgment debts or awards is becoming increasingly prevalent worldwide. Several factors contribute to this trend, reflecting economic, strategic, and geopolitical dimensions:

1. Economic hardship: many businesses face financial difficulties that make it impossible to fulfil their obligations. Economic downturns, market volatility, and rising operational costs can leave businesses without the means to pay, even if they are willing.
2. Disagreement with the court’s decision: some businesses believe the adverse judgment or award is unjust and refuse to comply out of principle. This resistance can stem from perceived unfairness in the legal process or a belief that the outcome does not reflect the facts of the case.
3. Strategic avoidance of payment: some businesses deliberately use tactics to avoid payment, such as restructuring, transferring assets, or exploiting legal loopholes. Avoiding payment becomes a calculated strategy to preserve financial resources.
4. Uncertain future outlooks: businesses facing severe market challenges or potential insolvency may prioritise immediate survival over settling debts. This is particularly true for industries undergoing significant disruption or facing regulatory changes.
5. Geopolitical factors: businesses are influenced by the political climate in their country. State-owned enterprises may resist payment due to national interests or political strategies. Governments may prioritise domestic stability over international obligations, especially in times of political unrest or economic sanctions.

Our approach

In our experience, early consideration of a defendant/respondent’s assets, their geographical location(s), and what routes to enforcement are likely to be available, are commonly overlooked aspects of a claimant’s dispute resolution strategy.

There is little point in securing a judgment or arbitration award if it cannot easily be recognised and enforced in the jurisdictions where the counterparty’s most valuable assets are located.

Addressing how any successful judgment or arbitration award will be enforced should form part of the claimant’s overall strategy from the outset. It should, where necessary, include third-party investigations into whether a counterparty has assets, the nature of those assets, where they are located, and the likelihood of successfully enforcing them in each jurisdiction. In turn, this includes consideration of relevant bilateral arrangements, international treaties, and/or conventions (the New York Convention is one of the key instruments in international arbitration).

Where appropriate, early third-party investigations and potentially injunctive relief may also need to be considered to ensure those assets are identified and ringfenced pending determination of the claim.

We have extensive experience in the enforcement of high-value judgments and arbitral awards. This includes any necessary preliminary registration of judgments or recognition of foreign awards in the English courts, all forms of enforcement of English judgments, including third-party debt orders, attachments of earnings, writs of control, warrants of execution and charging orders, ancillary applications such as insolvency procedures (winding-up and bankruptcy petitions, appointment of administrators, liquidators, trustees and other remedies), emergency relief including injunctions of all kind, whether over property, bank accounts or assets and with assistance from local partners, enforcing English judgments or London-seated arbitral awards overseas.

We also offer contingent fees for many enforcement actions, allowing clients more certainty and the ability to manage costs more effectively.

If you would like advice about how to enforce a judgment or arbitral award in the UK or in other jurisdictions or are in the early stages of considering your litigation strategy for a potential dispute, please get in touch with our Disputes team.