Recognition, enforcement and execution in international arbitration are important legal concepts to master as they determine the post-arbitral consequences of an arbitration award once it has been rendered. However, their distinction is often difficult and depends on the legal system in which they are sought. We will review their differences in the following sub-sections.
Recognition in International Arbitration
Recognition in international arbitration aims to acknowledge that the arbitral award is final and binding and has a res judicata effect. As accurately pointed out in Redfern and Hunter on International Arbitration, recognition in international arbitration is used as a “shield [to] block any attempt to raise in fresh proceedings issues that have already been decided in the arbitration”.[1]
Recognition of an arbitral award essentially means that it is accepted as valid and can produce the same effects as a domestic court judgment.
Enforcement in International Arbitration
Usually, enforcement constitutes the “process of obtaining an order by a court or authority directing compliance in accordance with the award.”[2] As stressed in Redfern and Hunter on International Arbitration, enforcement “goes a step further than recognition. A court that is prepared to grant enforcement of an award will do so because it recognises the award as validly made and binding upon the parties to it, and therefore suitable for enforcement.”[3] In contrast with recognition, enforcement is used as a “sword […] applying legal sanctions to compel the party against whom the award was made to carry it out.”[4]
In other terms, enforcement involves the actual implementation of the arbitral award, compelling the losing party to comply with its terms. However, the term enforcement is the least clear of the three terms as, in some jurisdictions, it is used interchangeably with recognition or even execution.
For instance, in the context of investment arbitration awards, the Arbitration (International Investment Disputes) Act of Zimbabwe requires that “the High Court shall register an award on the application of any person who seeks recognition and enforcement of the award”[5] and that such a registration “shall be of the same effect for the purposes of execution […] as if the registered award were a judgment of the High Court [and] shall have the same effect as a final judgment of the High Court in barring further proceedings between the parties to the award in relation to the issues determined by the Tribunal in the award.”[6]
The differences in national laws’ understanding of recognition, enforcement, and execution are sometimes underlined in different linguistic versions of international conventions. For example, Article 54 of the English version of the ICSID Convention refers to all three terms: recognition, enforcement and execution as follows:[7]
(1) Each Contracting State shall recognize an award rendered pursuant to this Convention as binding and enforce the pecuniary obligations imposed by that award within its territories as if it were a final judgment of a court in that State. A Contracting State with a federal constitution may enforce such an award in or through its federal courts and may provide that such courts shall treat the award as if it were a final judgment of the courts of a constituent state.
(2) A party seeking recognition or enforcement in the territories of a Contracting State shall furnish to a competent court or other authority which such State shall have designated for this purpose a copy of the award certified by the Secretary-General. Each Contracting State shall notify the Secretary-General of the designation of the competent court or other authority for this purpose and of any subsequent change in such designation.
(3) Execution of the award shall be governed by the laws concerning the execution of judgments in force in the State in whose territories such execution is sought.
However, the French version refers only to two terms: reconnaissance and exécution:
(1) Chaque Etat contractant reconnaît toute sentence rendue dans le cadre de la présente Convention comme obligatoire et assure l’exécution sur son territoire des obligations pécuniaires que la sentence impose comme s’il s’agissait d’un jugement définitif d’un tribunal fonctionnant sur le territoire dudit Etat. Un Etat contractant ayant une constitution fédérale peut assurer l’exécution de la sentence par l’entremise de ses tribunaux fédéraux et prévoir que ceux-ci devront considérer une telle sentence comme un jugement définitif des tribunaux de l’un des Etats fédérés.
(2) Pour obtenir la reconnaissance et l’exécution d’une sentence sur le territoire d’un Etat contractant, la partie intéressée doit en présenter copie certifiée conforme par le Secrétaire général au tribunal national compétent ou à toute autre autorité que ledit Etat contractant aura désigné à cet effet. Chaque Etat contractant fait savoir au Secrétaire général le tribunal compétent ou les autorités qu’il désigne à cet effet et le tient informé des changements éventuels.
(3) L’exécution est régie par la législation concernant l’exécution des jugements en vigueur dans l’Etat sur le territoire duquel on cherche à y procéder.[8]
This linguistic difference was accurately explained by the UK High Court’s decision dated 19 January 2024 as follows:[9]
(a) The French, Spanish and English texts are equally authentic. Article 33(3) of the Vienna Convention therefore presumes the terms of the treaty to have the same meaning in each text.
(b) However, the French and Spanish texts have to be understood in the context of the civilian concept of exequatur which combines recognition with a declaration of enforceability. The terms exécution and ejecución thus encompass both recognition and enforcement in the sense of enforceability (Article 54(1)) on the one hand, and enforcement by way of execution on the other (Article 54(3)).
(c) This is the sense which best reconciles the texts having regard to the object and purpose of the Convention as required by article 33(4) of the Vienna Convention.
Therefore, there is no unanimity regarding the exact meaning of the term enforcement and its neat distinction from recognition and execution. As summarised by Sabahi and Rubins, it may be used:[10]
to refer to the process by which a court grants an arbitral award the force of a national court judgment, more precisely called confirmation or recognition,
to refer to the actual execution of a debt against specific assets of the debtor, more precisely called execution,
to refer to various intermediate steps between the two existing in some jurisdictions, or
as an omnibus word to describe in general terms the process of turning an award rendered by an arbitral tribunal into a transfer of cash to the successful party, encompassing each of the individual steps of recognition and execution involved in doing so, however, they may differ from one jurisdiction to another.
Execution in International Arbitration
Usually, the concept of execution refers to the process of the court taking control over specific assets of the debtor, for instance, through a compulsory conveyance, attachment, or sale. The execution is typically governed by the rules of domestic law of the country in which such specific assets are located.
Recognition, Enforcement, Execution and State Immunity
In the context of arbitral awards rendered against States and State-owned entities, the issue of immunities must be taken into account when considering their recognition, enforcement, and execution.
There are two levels of State immunity – immunity from jurisdiction and immunity from execution. Immunity from jurisdiction relates to recognition of arbitral awards in the sense that it concerns “whether a court can be prevented from deciding something involving a state, including concerning the binding force of an arbitral award.”[11] On the other hand, immunity from execution (as its name indicates) relates to execution of arbitral awards as it concerns “whether an organ of a state, whether a court or some other organ of the judicial or executive branch, can be prevented in execution of a debt owed under a judgment from taking something that belongs to another state.” Regarding enforcement, it “might relate to either, or both, depending on how the word is being used.”[12]
Conclusion
Recognition, enforcement, and execution are important legal concepts to be considered once an arbitral award is rendered in order to ensure that the outcome of arbitration is effective and binding across borders. While there are several conceptual differences between them, their content and regime largely depend on international treaties and national laws.
[1] Blackaby N., Partasides C., Redfern A. and Hunter, M., Redfern and Hunter on International Arbitration, 7th ed., para. 11.22 (emphasis added).
[2] Compliance with and Enforcement of ICSID Awards, ICSID Background Paper, June 2024, Para. 36.
[3] Blackaby N., Partasides C., Redfern A. and Hunter, M., Redfern and Hunter on International Arbitration, 7th ed., para. 11.21.
[4] Blackaby N., Partasides C., Redfern A. and Hunter, M., Redfern and Hunter on International Arbitration, 7th ed., para. 11.22 (emphasis added).
[5] Arbitration (International Investment Disputes) Act of Zimbabwe, Article 4(1).
[6] Arbitration (International Investment Disputes) Act of Zimbabwe, Article 5.
[7] ICSID Convention, English version, Article 54 (emphases added).
[8] ICSID Convention, French version, Article 54 (emphases added).
[9] High Court Decision [2024] EWHC 58 (Comm) dated 19 January 2024, para. 45 (emphasis added).
[10] B. Sabahi, N. Rubins, et al., Investor-State Arbitration, 2nd ed. (2019), p. 837.
[11] B. Sabahi, N. Rubins, et al., Investor-State Arbitration, 2nd ed. (2019), p. 837.
[12] B. Sabahi, N. Rubins, et al., Investor-State Arbitration, 2nd ed. (2019), p. 837.