Struggles in Implementing Non-Financial Rewards: A Look at Their Enforcement Challenges
Challenges in Enforcing Non-Monetary Arbitral Awards
Enforcing non-monetary arbitral awards, such as declarations, injunctions, and orders for specific performance, presents unique difficulties compared to monetary awards. These challenges stem from the nature of these remedies, which differ fundamentally from monetary awards.
One of the primary obstacles is the non-automatic enforceability of non-monetary awards as court orders. Courts often hesitate to convert non-monetary awards into enforceable judicial orders without additional proceedings or legal basis. For instance, the U.S. Eleventh Circuit distinguishes between monetary arbitration awards (enforced as final judgments potentially via writs of execution) and non-monetary awards that do not invoke contempt power, limiting enforcement mechanisms.
Parties frequently challenge the enforcement of non-monetary awards by asserting arbitrator bias, exceeding authority, or procedural irregularities. When an arbitrator awards injunctions or specific performance, opposing parties may argue these exceed the arbitrator's jurisdiction or are inconsistent with law, prompting courts to scrutinize enforceability more carefully. Objections such as lack of jurisdiction under arbitration statutes or procedural flaws may cause courts to suspend enforcement or remit awards back to arbitrators for reconsideration rather than enforce them directly.
Courts address these challenges by careful judicial review. Remedies for problematic awards range from remitting the matter back to the arbitral tribunal, setting aside the non-monetary portions, or declaring them unenforceable if they fall outside permissible arbitrator powers. Some courts require a separate judicial proceeding to convert non-monetary awards into enforceable injunctions or orders, effectively requiring parties to seek court orders based on the award rather than direct enforcement of the award itself.
In the case of Roadpost Inc. v Beam Communications Pty Ltd [2025] FCA 120, the court directed the parties to remove the words "and declare" from an order characterized as specific performance because a declaration in the terms of an award is not "enforcement" of the award. Enforcing courts may take on a broader supervisory role when enforcing non-monetary orders, potentially including ongoing monitoring of compliance and coercive measures.
The ICSID Convention does not allow for the enforcement of non-monetary orders, and the enforcement of non-monetary awards in international arbitration can generate specific consideration. The New York Convention does not have an equivalent limitation for the enforcement of non-monetary awards. Courts have refused to enforce declarations on the basis that restating the declaration provides no real benefit and that the purpose of enforcement is to facilitate the victorious party in obtaining the material benefit of the award.
Enforcing courts have considered utility when deciding whether to enforce an award, refusing to make a declaration recognizing a monetary award that had already been paid if it would produce no foreseeable or meaningful consequences for the parties. Ambiguity in non-monetary orders can lead to arguments against their enforcement, as a court may be asked to make orders to resolve ambiguity, raising questions about the scope of an enforcing court's jurisdiction to modify an award.
Enforcement of non-monetary awards is less common, leading to limited judicial consideration of related issues. Parties seeking non-monetary relief should carefully consider the enforceability of resulting awards and try to ensure that non-monetary awards are crafted carefully to reduce hurdles to enforcement. Issues that can arise in the enforcement of non-monetary awards include determining the time for performance and the need for ongoing court supervision.
The existence and scope of an enforcing court's discretion under the New York Convention framework is an issue that has yet to be grappled with in a principled way and is one that arises most acutely in the context of non-monetary awards.
- The complexities in enforcing non-monetary arbitral awards, such as declarations, injunctions, and orders for specific performance, are often due to their non-automatic enforceability as court orders, necessitating additional proceedings or legal basis.
- Parties who wish to seek non-monetary relief should exercise care in crafting their awards to minimize potential hurdles to enforcement, given the limited judicial consideration of related issues and the potential need for ongoing court supervision.
