When Is An Arbitration Award An Enforceable Judgment?

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When you enter into an arbitration agreement, do you think about whether the arbitration process results in an enforceable judgment? You should.

The award that you receive at the end of the arbitration process isn't a judgment and can't be immediately enforced as a judgment. That is what the U.K. Court of Appeal recently held in Mobile Telesystems Finance SA v. Nomihold Securities Inc.

This decision demonstrates the award is only enforceable as a judgment once it has been rendered into a judgment of the court. Until then, the judgment execution process of the court is not available to the claimant. While the court may still grant extra-ordinary injunctive relief to protect the claimant from the respondent hiding or dissipating its assets, the court will likely look at the issue in the context of a pre-judgment proceeding, not the execution of a judgment.

The present case reminds us that an arbitral award is not a court judgment and we should consider this distinction when deciding whether to enter into an arbitration agreement.

arbitration - enforcing the award - freezing orders - Mareva injunction

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Thomas Heintzman, Arbitration Place | Attorney Advertising

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