Arbitration Award Default Insurance (AAD)

The risk of non-payment by a sovereign state is often the single greatest barrier to funding international arbitration and bilateral investment treaty claims.

Claimants investing significant resources in arbitration, law firms considering acting on a full or partial contingency basis, and third-party litigation funders may be confident in the merits of a claim—but remain concerned about the risk that a respondent state may delay payment or refuse to honour an arbitral award.

TheJudge arranges Arbitration Award Default Insurance (AAD), a specialist insurance product that protects claimants against a respondent state’s failure to pay an arbitral award. Typically, the policy responds by paying a proportion of the unpaid award after a defined waiting period, up to the agreed limit of indemnity. This significantly reduces sovereign enforcement risk and improves the bankability of arbitration claims.