Arbitration judgments are enforced through public shaming and cross-bourse reciprocity.

Evidence

The DDC Bylaws provide that “[a]ll decisions of arbitration panels including floor committee arbitrations which are not complied with within 10 working days, together with the picture of the non-complying member, shall be posted in a conspicuous place in the Club rooms.” … As a condition of membership in the federation, each bourse agrees to enforce the judgments of all member bourses. Since most diamond dealers frequently transact in foreign bourses, this reciprocity of enforcement greatly increases the penalty for failing to voluntarily comply with an arbitration judgment. — Lisa Bernestein, Opting out of the Legal System, 93

Categorization

• XREF: Connects to reputation-based enforcement mechanisms discussed in the private-ordering literature (e.g., Ellickson, Bernstein on the diamond industry’s norms vs. law), and to how close-knit merchant communities police members without state courts. — connects to: Private arbitration can effectively substitute for courts — Lisa Bernestein, Opting out of the Legal System, 40; Arbitration’s secrecy lets wrongdoers minimize reputation costs while right-holders gain speed and cheapness. — Lisa Bernestein, Opting out of the Legal System, 81; Intellectual property regimes operate through shame and reputation as much as statute. — , The Braided Reading EPUB: 5-Year…, 3370 (+6 more)

Related

• A private tribunal can enforce judgments through instantaneous reputational publicity. (similarity 0.86)
• Shame-based public sanctions are faster and stronger than court judgment enforcement. (similarity 0.85)
• Reputation, not third-party enforcement, governs diamond market transactions. (similarity 0.83)
• Diamond industry’s private law succeeds by enforcing judgments faster than courts. (similarity 0.82)
• Arbitration’s secrecy lets wrongdoers minimize reputation costs while right-holders gain speed and cheapness. (similarity 0.80)
• Secrecy of arbitral disputes preserves a party’s creditworthiness and reputation. (similarity 0.80)
• The threat of publicity substitutes for formal judicial enforcement. (similarity 0.80)
• Private arbitration can effectively substitute for courts (similarity 0.79)
• The diamond trade sustains an extralegal contractual regime through private arbitration and reputational enforcement. (similarity 0.79)
• Reputation enforcement works even without formal arbitration because traders seek future club membership. (similarity 0.79)
• Private dispute resolution excels through speed, low cost, and secrecy. (similarity 0.79)

Broader Connections

• Intellectual property regimes operate through shame and reputation as much as statute. #expands (0.82) — , The Braided Reading EPUB, 3370
• Shame-based public sanctions are faster and stronger than court judgment enforcement. #corroborates (0.80) — Lisa Bernestein, Opting out of the Legal System, 238
• Reputation can substitute for legal enforceability in evaluating contracts. #expands (0.78) — Lisa Bernestein, Opting out of the Legal System, 213
• Confinement to one community makes reputational sanctions powerful enough to guarantee repayment #expands (0.75)