Typically, when an international arbitration tribunal renders an award, it includes a specific date by which the defendants must pay the award. If the defendants refuse to pay the award by the mandated deadline and the defendants are not seeking that the award be set aside, then the claimants have the ability to seize assets of the defendants through national courts that could enforce the tribunal’s judgment. Those courts may issue orders to seize a party’s assets in their jurisdiction as a way to enforce all or part of the tribunal’s award. This presents an uphill battle for the claimants, particularly if the defendant is a sovereign entity. States have sovereign-immunity laws that prevent their national courts from seizing most assets of another state, except for those assets largely used for a commercial purpose. Although seizing such assets is possible and has been done, it is a costly and time-consuming process. As the size of the award increases, the costs and time required to seize assets increase exponentially. And when awards become especially massive, it becomes particularly difficult for the claimant to seize assets that would be valued anywhere near the award amount. The degree of difficulty becomes so large that it might not even be worth attempting to seize the defendant’s assets. Arbitration panels are likely to face more and more disputes involving higher and higher awards. Project-finance transactions and public-private partnerships, which have capital costs in the hundreds of billions of dollars, are becoming increasingly popular as investment mechanisms, particularly in developing countries. Nearly all these transactions use international arbitration in their contracts. Disputes that arise from these transactions could result in massive awards on a sizable scale. Barring adopting new investment treaties, states could be prevented from engaging in recalcitrant behavior by having the international community develop additional incentives to motivate states to comply with large awards rendered against them. This includes better involvement of multinational organizations—to put additional pressure on the state—and the private sector—to determine the best entity to execute the award against the state
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