Enforcing awards against state assets: a practical primer

States generally honour arbitral awards, though not always promptly, and a creditor holding an unpaid award against a state faces a distinctive set of obstacles. Most legal systems distinguish between immunity from suit, which a state often waives by agreeing to arbitrate, and immunity from execution, which it usually does not.

The decisive question is the character of the assets. Property used for commercial purposes may be available; diplomatic premises, central bank reserves and military property are protected in most jurisdictions. Assets held by state-owned entities raise the separate question of whether the entity can be treated as the state itself.

Successful enforcement is therefore a matter of planning. Creditors should begin identifying and characterising assets well before the award is issued, choose enforcement jurisdictions with care, and keep open the possibility of a negotiated settlement, which remains the most common way these matters end.