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Results: 4 Answers
International Arbitration
10.
Costs
10.1
How will the tribunal approach the issue of costs?
 
UK
In the absence of agreement between the parties, the tribunal can determine which costs of the arbitration are recoverable (Section 63(1)) and make an award allocating those costs (Section 63). In advance of the parties incurring costs, the tribunal may also direct that recoverable costs be limited (Section 65).

The costs of the arbitration include:

  • the fees and expenses of the arbitrator or arbitrators (provided that that they are reasonable or appropriate in the circumstances (Section 64(1));
  • the fees and expenses of any arbitration institution concerned; and
  • the legal and other costs of the parties (Section 59).

The general principle under English law is that costs should follow the event (ie, the successful party will be awarded its costs), unless this is not considered appropriate in the circumstances (Section 61(2)).

If the tribunal does not determine what costs (if any) are recoverable, any party to the arbitration may apply to the court for a costs determination (Section 63(4)).

There is no requirement for the parties to provide an estimate or budget of the anticipated costs at the outset of the arbitration proceedings.

Unless the parties agree otherwise, the tribunal may order a claimant to provide security for the costs of the arbitration under Section 38(3) of the act. If a claimant then fails to comply with such an order, the tribunal may make an award dismissing the claim (Section 41(6)).

For more information about this answer please contact: Craig Tevendale from Herbert Smith Freehills
10.2
Are there any restrictions on what the parties can agree in terms of costs in an arbitration seated in your jurisdiction?
 
UK
Any agreement that one party is to pay the whole or part of the costs of the arbitration in any event shall not be valid unless agreed after the dispute in question has arisen (Section 60). This prohibits a ‘pre-agreement’ that one party shall bear the costs irrespective of the outcome of the case.

For more information about this answer please contact: Craig Tevendale from Herbert Smith Freehills