How to get an Arbitration Award paid

Winning a case is not always the same as getting paid!  It does not necessarily follow that getting a final Arbitration Award will cause a Respondent to hand over the money due.  Sometime, it is necessary to ‘pursue’ the non-paying Respondent in different jurisdictions, attach assets and enforce a London Arbitration Award under the New York Convention.  We recently did that, successfully, for a client.  The steps we took are a timely reminder of what can be achieved, cross-border, with determination and expertise.

Our client (via ourselves) obtained a LCIA Arbitration Award in London against a large Geek company.  The Greek company, whilst still trading, was in a form of protected administration under Greek law, so that enforcement of the Award against it in Greece was not possible.  Through our international network we were able to identify a valuable bulk commodity cargo to be sold and shipped by the Geek company to a buyer in Finland.  The cargo could not be arrested in Greece pre-shipment due to the protected status of the Greek company and it was not possible to prove when, exactly, title would pass from the Greek company to the Finnish company, so that it was not possible to arrest the cargo upon arrival in Finland. 

However, we were able to obtain evidence of the invoicing arrangements between the Greek and Finnish companies.  Armed with that information, our Finnish correspondent lawyers were able to obtain a garnishee injunction against the Finnish buyer preventing payment by it of the sale proceeds to the Greek company.  The case became further complex as it materialised that the Greek company had ‘factored’ the sale proceeds to a third party Swiss bank – so that payment, in fact, was not to be made to the Greek company.  Nevertheless, we were able to overcome that obstacle in Finland and maintain the Injunction against the Finnish buyer.

Finally, faced with ‘no way out’ and disruptions to its business affairs with its Finnish customer, the Greek company capitulated and paid 100% of the Award, plus interest and legal costs – including those incurred by our client in Finland.

Different jurisdictions have different rules for enforcement of foreign Arbitration Awards, even where the New York Convention applies.  It is always worthwhile checking every feasible avenue for enforcement – however remote a prospect it might first appear – because an Arbitration Award is largely useless if it does not result in payment of the claim.

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