NLJ affiliate The American Lawyer has reviewed the largest awards in the history of its Arbitration Scorecard survey and investigated their enforcement. We were left with two strong conclusions about investment treaty arbitration.

First, the largest contract awards have dwarfed the biggest treaty awards. Of the 30 awards we've identified of more than $500 million, exactly one was grounded in a treaty: last year's $2.3 billion verdict in Occidental v. Ecuador II. Investors who file megaclaims often come up empty.

Second, the treaty awards are much less likely to be paid. Nearly every commercial award tracked has been substantially honored. By contrast, of the 15 treaty awards of about $100 million or higher:

• Four have been substantially paid, including Occidental v. Ecuador I, or settled without any public indication of a heavy discount (France Telecom v. Lebanon).

• Two have been annulled and subsequently re-filed (Sempra Energy v. Argentina and Enron v. Argentina).

• One withdrawn in light of corruption investigations (Siemens v. Argentina).

• One vacated by the U.S. Court of Appeals for the D.C. Circuit with cert granted by the U.S. Supreme Court (B.G. v. Argentina).

• One settled for 37.5 percent of its value after the investor was allegedly entrapped and thrown in prison (Fuchs v. Georgia).

• Two await annulment proceedings (EDF v. Argentina and Occidental v. Ecuador II) and one awaits a final appeal in the Dutch courts (Chevron v . Ecuador I).

• Finally, three fully litigated awards remain unpaid.

The first finding should belie critics' claims that treaty arbitration is a major drain on state resources, or that an anti-state bias may be seen in the results on liability or damages. The second finding casts doubt on advocates' claims that arbitration awards are uniquely enforceable.

Enforcement of treaty awards often is thought of as an Argentina problem, and Argentina may yet relent to pressure from trade partners, bond buyers and foreign direct investors. But the results are equally consistent with the proposition that enforcement is erratic when the award rises into nine digits. The record of compliance is better if one includes small awards or investor-state awards grounded in contract.

State accountability is much to be desired, and even partial accountability is preferable to the blanket immunity that is usually the alternative in litigation. The point is simply that the early record of compliance with large treaty awards has been spotty. Vast treaty claims now pending — especially the $114 billion claim by the former majority shareholders of Yukos Oil Co. against Russia — will test the willingness of arbitrators to level damages of high magnitude, and the ability of investors to compel enforcement when they do.

Michael D. Goldhaber is senior international correspondent for ALM and The American Lawyer. E-mail: mgoldhaber@alm.com.