Claimant's brief (Cologne) - Pace University

UNIVERSITY OF COLOGNE Page 20
1. CLAIMANT will honor an award on costs voluntarily
76 CLAIMANT has assured RESPONDENT that it will honor all burdens resulting from a
potential award on costs without hesitancy (Letter Langweiler, 9 September 2003, para. 3).
There is no indication that CLAIMANT might deviate from the international practice that
parties to arbitration fulfill the awards voluntarily.
77 According to several surveys concerning the enforcement of arbitral awards, the figure of
enforcement voluntarily or by the courts is 98 % (KERR, p. 129). Moreover, the consequences
resulting from a non-fulfillment of an award may have serious effects on the company’s
future. The failure of a party to honor its obligation to pay an award can lead to blacklisting,
boycotting and other damages to the party’s reputation in its particular branch of international
trade (SARCEVIC, p. 177, 191 et seq.). Consequently there is no doubt that the award will be
voluntarily honored by CLAIMANT.
2. Even if CLAIMANT refused to comply with the award, it would be enforceable,
since Equatoriana and Danubia are signatory states of the NY Convention
78 Even if CLAIMANT refused to comply with the award, there would be no threat to
enforcement since Equatoriana and Danubia are signatory states of the NY Convention
(Statement of Case, para. 14). This fact in itself guarantees enforceability of a possible award
on costs in RESPONDENT’s favor. Article III NY Convention is unambiguous in providing
that “each contracting state shall recognize arbitration awards as binding and enforce them in
accordance with the rules of procedure of the territory where the award is relied on”.
79 Hence, RESPONDENT may not argue that an award on costs will not be enforced in
Equatoriana.
3. RESPONDENT cannot rely on the alleged reluctance of Equatorianian courts to
enforce arbitral awards since it was able to assess this risk before signing the
arbitration agreement
80 RESPONDENT’s allegation that awards are in fact not enforced in Equatoriana is not
sufficient to justify an order for security for costs. RESPONDENT has failed to show on a
prima facie basis that there is a risk of non-enforcement in this signatory state of the NY
Convention. A mere report on enforcement does not provide the necessary prima facie
evidence (ICC case 8786, p. 83).
81 Even if the Tribunal should assume that there is sufficient evidence that Equatorianian courts
were reluctant to enforce arbitral awards, RESPONDENT may not rely on this. The parties