Professors Trey Childress and Jack Coe, "Compliance in the Shadow of the Award" -- Yale Journal of International Law (forthcoming)

Professors Donald Earl (Trey) Childress and Jack J. Coe's article, "Compliance in the Shadow of the Award," (SSRN) will be published in the Yale Journal of International Law. The article, co-written with Catherine A. Rogers and Christopher R. Drahozal, makes three important contributions to the literature regarding award compliance in international arbitrations: one empirical, one conceptual, and one prescriptive.

Abstract of "Compliance in the Shadow of the Award"

One of international arbitration’s most persistently asserted benefits is that losing parties almost always voluntarily comply with the final award without any court action. Scholars and practitioners routinely report that the rate of voluntary compliance is 90%, meaning that once an award is rendered, it is honored without the involvement of any domestic court 90% of the time. But despite how frequently the 90% voluntary compliance rate is cited, it appears to be based more on “armchair empiricism” than rigorous testing.

This Article makes three important contributions to the literature regarding award compliance: one empirical, one conceptual, and one prescriptive. Empirically, we develop a new methodology and use an original dataset to test the 90% voluntary compliance rate. Based on direct sources (awards and court cases), we calculate a maximum voluntary compliance rate of 74.2%—which is a substantial degree of voluntary compliance, but also substantially below the 90% often cited in the literature.

Conceptually, our data raise questions about the conventional meaning of the term “voluntary compliance.” Our data (and other sources) indicate that losing parties frequently satisfy awards after a court action is filed, but before formal legal compulsion. Based on these insights, we reconceptualize unilateral voluntary compliance as instead a coordinated agreement between the parties.

Prescriptively, our reconceptualization of voluntary compliance allows us to develop a theory about parties’ compliance in the shadow of the award and to offer prescriptions for how parties can increase award satisfaction without court involvement.