Successful international arbitration claimants to
benefit from certainty of award payment
New insurance solution - Arbitration Proceedings Award Default
insurance – ensures prompt payment following a successful
international arbitration award

Press release:
London, 03 September 2015: Companies or organisations engaged in arbitration
proceedings against a sovereign state can now eliminate the risk of non or late payment of
awards with the launch of a new insurance solution.
Arthur J. Gallagher — the international broking division of Arthur J. Gallagher & Co. outside
of the United States — has responded to the risk of payment default amid the rising
popularity of international arbitration with its tailor-made Arbitration Proceedings Award
Default insurance (APAD). This insurance can help negate the need for lengthy and
expensive enforcement proceedings by indemnifying claimants to the value of an arbitrator’s
award, making full payment if the defendant fails to honour their payment obligationi.
Steve Jones, Director of Dispute Resolution at Arthur J. Gallagher, said: “Actual payment risk
is an aspect clients will always consider and their legal representatives can find hard to
answer as arbitrations can take years to conclude meaning the political or economic
situation can also change dramatically during that time. It is therefore extremely difficult to
predict at the outset of an arbitration what the payment risk may be at its conclusion.”
Commenting on the rising demand for this form of risk mitigation, Alan Pratten, Managing
Director of Dispute Resolution, said: “From our research, it was clear that the number of
international arbitrations was on the rise — the International Centre for Settlement of
Investment Disputes alone has seen new cases doubling within a 10 year periodii — and
political and/or economic unpredictability is driving uncertainty of award payment itself as
well as uncertainty of payment timing. These challenges are not unique to emerging
economies or any one business sector, however the proportion of those arbitrations filed
against sovereign states in Eastern Europe/Central Asia and Sub-Saharan Africa is rising,
with 53% of new cases registered in 2014 stemming from these two areas, while ICSID
figures show oil, gas & mining, power and construction now account for 73% of all new
cases compared to 34% three years previously.”

 He added: “Working with Lloyd’s of London syndicates, we crafted the Arbitration
Proceedings Award Default insurance solution to hedge these key risks of uncertainty
around payment and uncertainty of payment timing following a successful award. We believe
that this solution is unique for organisations who find themselves already in the midst of a
dispute. The solution is not available for cases where the sovereign state has already
defaulted on the award.”

Key features of the APAD solution include:
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Prompt turnaround from default to award payment;
The claimant will keep 100% of the sum insured value;
Competitive pricing structure — with premiums typically costing 3% to 6% of the sum
insured depending on the territory. The one-off premium provides up to five years of
insurance. Premium discounts are given for early claim settlement — of up to 60% of
the premium rate;
A succinct, condition-light policy underwritten by ‘A’ rated insurers;
The client is not required to contribute towards recovery costs;
Initial policy periods of five years available — to cater for the typical multi-year
duration of international arbitration proceedings.

ENDs
For further press information on the above, please contact:
Lydia Rochelle, Account Director, Byfield Consultancy
+44 (0) 20 7092 3985 or +44 (0) 7772 747 542 lydia.rochelle@byfieldconsultancy.com
Lynn Rouse, External Communications, Arthur J. Gallagher
+44 (0) 20 3425 4316 lynn_rouse@ajg.com
Notes to Editors:
Arthur J. Gallagher, the brand name for the international broking division of Arthur J. Gallagher & Co.
outside of the United States, employs 6850 staff across the UK, Australia, Singapore, Caribbean,
Canada, Chile, Colombia, Peru, Norway and New Zealand.
Parent company Arthur J. Gallagher & Co. (NYSE: AJG), an international insurance brokerage and
risk management services firm, is headquartered in Itasca, Illinois, has operations in 31 countries and
offers client service capabilities in more than 140 countries around the world through a network of
correspondent brokers and consultants.

 i

This is an insurance policy, where declaration of materials facts and adherence to the policy terms and conditions is important

ii The ICSID Caseload Statistics (Issue 2015-1) — According to statistics from the International Centre for Settlement
of Investment Disputes — an arbitration body whose disputes all involve a state or state-owned entity — the annual number of cases
has nearly doubled in the last 10 years. Between 2000 and 2004, the average number of cases was 20.6, rising to 38.4 for the period
2010 to 2014.