Proposed arbitration clause could allow unpaid court judgments to be enforced globally
A partner at McDermott Will & Schulte has proposed a new arbitration clause designed to strengthen the enforcement of cross-border monetary judgments, offering businesses an alternative to relying solely on domestic courts.
Hilton Mervis, a partner at the firm, has developed a contractual mechanism that would allow an unpaid court judgment to be converted into an arbitral award, enforceable under the New York Convention. The proposal seeks to address long-standing difficulties faced by companies attempting to recover money from counterparties with assets located overseas.
The clause is intended for inclusion in commercial contracts. Where a final court judgment ordering payment remains unpaid after a specified period, the creditor would be able to invoke arbitration without reopening the underlying dispute. The arbitrator’s role would be limited to confirming the existence of the judgment and determining payment obligations, including interest and costs.
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Mervis said the approach was designed to fill a recognised gap in cross-border enforcement. He explained that while court judgments offer transparency and public accountability, their enforceability across borders can be uncertain and time-consuming. By contrast, arbitral awards benefit from the New York Convention, which is widely adopted and provides a more predictable enforcement framework.
“The arbitral tribunal’s mandate is deliberately narrow,” Mervis said. “It is confined to determining that there has been a final court judgment, and resolving consequential payment obligations and ordering the provision of security for the award.”
A central feature of the clause is a security mechanism. Under the proposal, an arbitrator could order the judgment debtor to provide security equal to the judgment sum within 14 days of a final court decision. This security could be paid into a court or designated bank account and would itself be enforceable as part of the arbitral award.
Mervis said this additional safeguard would enhance recovery prospects in jurisdictions where enforcing foreign judgments directly can be complex or slow. The clause has been reviewed by retired judges and senior in-house lawyers, including those at major financial institutions, who highlighted the security provision as a key strength.
The proposal has also attracted support from general counsel. Clare Wardle, general counsel and company secretary at Coca-Cola Europacific Partners, said a clause allowing a monetary judgment to be enforced both as a court judgment and as an arbitral award under the New York Convention would be a welcome development for businesses seeking swift enforcement.
The initiative comes amid renewed focus on international judicial cooperation. The Standing International Forum of Commercial Courts, chaired by High Court judge Sir Robin Knowles CBE, continues to promote collaboration between courts worldwide on cross-border enforcement issues. Mervis said mechanisms such as the proposed clause contribute to broader efforts to improve certainty and confidence in international dispute resolution.
The clause will be examined in detail in the forthcoming 2026 Law Over Borders Comparative Guide, edited by Mervis, which will assess its potential application across multiple jurisdictions.