When faced with a losing party reluctant to comply with the terms of an award, a successful party may choose to exert some form of diplomatic or commercial pressure to compel its counterparty’s performance.
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Examples of Commercial & Diplomatic Pressure
Depending on the situation, there are several types of commercial and diplomatic pressure that can be exerted on the losing party in an arbitration, including:
- Pressure may be particularly effective where failure to perform would jeopardize an ongoing commercial relationship which is valuable to the losing party.
- Pressure may be exerted through diplomatic channels where an overlap exists between political and commercial interests, especially where one of the parties to the proceedings is a state or state entity.
- To the extent that confidentiality obligations are not breached, it may also be possible to threaten adverse publicity in order to encourage performance.
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