International Arbitration: Corporate attitudes and practices 2008

International arbitration remains global companies’ preferred dispute resolution mechanism for disputes arising from cross-border trade and/or investments. Consequently, the results provide valuable insights for any business that trades or invests abroad, particularly for those people in the business charged with managing disputes when things go wrong.

The overall message is very positive for our clients, both arbitration lawyers and corporate clients - international arbitration is effective and most users are satisfied. The majority of cases are resolved satisfactorily either through a settlement by the parties or voluntary compliance with an award. In the minority of cases (11%) where enforcement of an award through national courts is required, the prevailing parties' record is good - most recover at least 75% of their award and do so in less than a year. Enforcement is a last resort but it works; this underpins the success of the international arbitration process and justifies the users' confidence in it.

Someof the key findings in more detail:

• 86% of in-house counsel at major corporations are satisfied with International Arbitration.
• Corporations prefer institutional arbitration to ad hoc arbitration (86% of awards rendered through institutions).
• 92% of arbitration disputes are successfully resolved at some stage through the arbitration proceedings through settlement or voluntary compliance, i.e. without the need to resort to national courts.
• There is a high degree of compliance with arbitral awards (84% of counsel said that the non-prevailing party complied voluntarily in more than 76% of cases).
• The majority (54%) of prevailing parties were prepared to negotiate a settlement after an award, offering a discount, sometimes of up to 50%, to secure prompt payment of the award.
• Where parties resort to enforcement proceedings, most usually achieve a reasonably high and prompt recovery (84% of corporations recovered more than 75% of the award and most did so in less than a year ).
• Where corporations have experienced problems with enforcement, the problems were more commonly due to the circumstances of the non-prevailing party (i.e. lack of traceable assets) than with the enforcement process itself.
• Over half of the respondents who had sought to enforce awards against states had encountered no major difficulties. There was a perception that trying to enforce an award against a state/country was difficult - certain countries are regarded as notorious. However, this perception was not matched by experience, where the record of enforcing awards against states was similar to enforcing awards against other companies.