This clause determines how a decision made by an arbitrator or court will actually be collected and enforced if the losing party refuses to pay. It matters because winning a case is only half the battle—you also need a legal mechanism to force payment. In the UK and US, arbitration awards can be enforced through court orders, but the process varies by country and jurisdiction. Without clear enforcement language, you might win your case but struggle to actually collect the money owed. The clause typically specifies which courts can enforce the award and what happens if the losing party ignores it.
Push for language that allows enforcement in multiple jurisdictions if you do international business, since the other party might move assets to avoid payment. Ask whether the clause covers enforcement costs (legal fees to collect) and who pays them. If the other party is based overseas, specifically request that enforcement can happen in their home country, not just yours. ---
Frequently Asked Questions
What does this clause mean in simple terms?
This clause determines how a decision made by an arbitrator or court will actually be collected and enforced if the losing party refuses to pay.
Why should I care about this clause?
It matters because winning a case is only half the battle—you also need a legal mechanism to force payment.
What are my options?
In the UK and US, arbitration awards can be enforced through court orders, but the process varies by country and jurisdiction.
How does this affect small businesses?
Without clear enforcement language, you might win your case but struggle to actually collect the money owed.