International corporations are no strangers to dispute resolution processes, including arbitration, mediation, and litigation. However, once a dispute is resolved, the parties must enforce the decision, which can be a challenge when dealing with foreign countries. International corporations need to understand the fundamental differences between enforcing an international arbitration award and enforcing a judgment in a foreign country. This blog post explores the differences between Arbitrational Award vs. Judgment and offers insights to help international corporations navigate these complex and often frustrating issues.
Arbitrational Award vs. Judgment: Which one is better?
Enforcing a judgment in a foreign country involves various procedures depending on the country’s legal system. It is often a time-consuming and costly process that requires complying with local laws and regulations. It may also involve translation of legal documents, appointing legal representatives from the foreign country, and obtaining local court orders. Moreover, enforcing a judgment in a foreign country does not necessarily guarantee the recovery of the amount owing, as it may be subject to numerous delays and local rules. On the other hand, enforcing an international arbitration award is relatively straightforward since the award is enforceable under the New York Convention (1958).
The Differences is their legal basis.
One of the main differences between enforcing a judgment in a foreign country and enforcing an international arbitration award is their legal basis. Enforcement of judgments in foreign countries relies on private international law, whereas enforcing an arbitration award is based on contract law. Parties can choose a neutral venue for arbitration, making the arbitration process more predictable and uniform. In contrast, the legal system of each country is unique, which makes enforcing a judgment across borders complicated and unpredictable.
Judicial Intervention is an issue.
Another fundamental difference between enforcing a judgment in a foreign country and enforcing an international arbitration award is judicial intervention. In the case of enforcing a judgment in a foreign country, there is often greater judicial involvement than in enforcing an international arbitration award. The judges have more discretion when enforcing judgments than when enforcing an arbitration award. In contrast, when enforcing an international arbitration award, the scope of judicial review is limited. This is because parties have agreed to arbitration and have also agreed to the appointed arbitrators as impartial experts.
International Arbitration is faster than litigation.
When it comes to enforcement, international customers prefer arbitration over litigation since the former process is quick, predictable and offers a neutral forum for resolving disputes. Moreover, international corporations may be concerned about the confidentiality of their matters, which is more effectively protected in arbitration compared to litigation. The arbitration proceedings remain private, while court proceedings are subject to public scrutiny.
New York Convention (1958)
One of the most significant benefits of enforcing an international arbitration award is that it provides international corporations with an enforceable award across multiple jurisdictions. This is because the New York Convention (1958) enforced international arbitration awards in over 160 countries. Thus, an enforcement award has the ability to reach across many foreign countries, making it a desirable choice for international corporations who do business across multiple borders. For more information on the signatories visit Contacting states » New York Convention
Overall, international corporations that intend to enforce arbitration awards and judgments in foreign countries should understand the fundamental differences between the two processes. While enforcing a judgment in a foreign country is complex and time-consuming, enforcing an international arbitration award is relatively straightforward. Arbitration also provides international corporations with enforceable awards across a variety of jurisdictions in a private and less predictable setting. By understanding these differences, international corporations can make informed decisions that will ensure their dispute resolution process is successful, efficient and cost-effective. Our office is well experience in enforcing judgements in the United States. Please Contact Our Office – Transnational Matters