Australian Contractor vs. UAE Project Owner
Claim Type – Arbitration Award Enforcement
Jurisdiction – Australia

CHALLENGE

Following a straightforward dispute, an Australian claimant, represented by a Swiss trustee, won an international arbitration award against a Middle Eastern project owner, demanding payment of USD 8 million for completed construction enabling works.

However, by the end of arbitral proceedings, the counterparty had been wound down, with no security for costs obtained or conservatory attachment established against the defendant. Since recourse lay with foreign courts, the enforcement procedure was heavy considering available resources; the award holder was faced with abandoning its award and writing off its legal costs.

The defendant’s default reduced its business and impacted its cash flow, immediate collection of the award was paramount. However, this proved to be impossible when approaching multiple law firms and litigation funders due to the high upfront legal cost and the substantial deferred financing fees.

PRACTICLAIM SOLUTION

Practiclaim became the fallback solution for the prevailing Australian party. Based on the claim information received, an assigned claim enforcement specialist evaluated its viability and the best way to recovery options, including applicable venues, enforceability rates, precedents, and alternative options. A comprehensive targeted strategy was also drawn out as part of the Claim Pre-Assessment, including a litigation budget, the types of expenses forecasted and the expected timings.

Accordingly, Practiclaim professionals were able to successfully progress the matter – with the help of a collection company – that opened the door to alternative fee arrangements from claim service providers willing to represent the Claimholder. By performing cost free work in the pre-claim phase, representatives offloaded their normal costs, showed claim value and prospects, defined scope of work and choose the appropriate boutique representative litigation firm that offered a highly tailored cost proposition – since a full-fledged law firm was not required.

In less than 14 months, a binding was issued in favor of the Claimholder. In this way, the enforcing party secured much-needed funds.

EFFECT

The Practiclaim method revealed the value of the enforcement claim, its realization probabilities, and its merits, which tangibly enhanced recovery. This had a decisive bearing on the claim service providers approach and aligning their interests with the Claimholder.

Compared with the traditional approach, legal costs were saved throughout the enforcement process and an optimized outcome-based fee arrangement was obtained from multiple claim service providers.

An awarded USD 6 million debt that was nearly written off due to heavy costs and lack of resources, was fully recovered.

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