How To Keep Arbitration Costs Under Control

Arbitration is routinely assumed to be the costlier alternative to litigation. That assumption deserves more scrutiny than it usually gets. Shorter proceedings reduce the interest accruing on a monetary claim where the respondent ultimately loses, and they shorten the period a company must carry a dispute reserve on its books — a factor with real weight for listed entities, where it feeds directly into valuation. Cost, in other words, is not just a function of hourly rates; it is a function of how the process is structured. The choices below are within the parties' control and can materially change the final bill.

1.   Consider a Sole Arbitrator

A dispute need not go to a three-member tribunal by default — parties can agree on a sole arbitrator, and the cost gap is often larger than clients expect. The mechanics differ by institution, but the direction is consistent:

A caution worth stating plainly: the ICC and SIAC figures reflect total costs (administration and tribunal fees combined), while the SCC and VIAC figures isolate the tribunal-fee component specifically, because that is the only part of the cost their own rules tie mechanically to the number of arbitrators. These are not perfectly like-for-like, but all point the same way: moving from three arbitrators to one typically cuts the relevant cost component by roughly half to two-thirds, and the exact figure depends on the claim value, the fee schedule in force, and the institution's own scale. Each institution publishes — or can be asked for — an online cost calculator, and it is worth running the actual claim value through it before finalising an arbitration clause or a procedural decision; these figures are illustrative, not a substitute for a case-specific estimate.

2. Don't Overstaff the Case — and Don't Play Games

Fielding a large legal team is common in arbitration, but a bigger team is not automatically better strategy — it can simply mean a larger bill.

Winning a case does not guarantee full recovery of legal fees. Arbitrators generally allocate costs under one of two models: (1) "costs follow the event," where the losing party bears the winning party's costs, or (2) each party bears its own costs regardless of outcome. Even under the first model, a tribunal retains discretion to reduce a costs award it considers unreasonable or disproportionate — inflated hourly rates, excessive time spent on the matter, or unmeritorious claims can all be grounds for a haircut.

The practical takeaway: play it straight, and keep your own costs proportionate to what the dispute actually requires.

3. Use Counsel with Genuine Arbitration Experience

This follows directly from the point above. If you lack in-house arbitration experience, engage counsel who has actually run cases before arbitral tribunals. Learning arbitration procedure on the client's dime is an expensive education, and you should be paying for time spent on your case — not for your counsel's on-the-job training. Institutional arbitration is, contrary to some assumptions, more formalised than it appears from the outside, and a working command of arbitration theory is not a nice-to-have.

4. Choose Governing Law and Language That Everyone in the Dispute Can Actually Work With

Choosing an exotic governing law for the main contract does not mean the tribunal will decline to apply it — but it may require costly expert evidence to do so accurately. English functions as something close to a working default in international arbitration; choosing a different procedural language is a legitimate choice, but it typically brings translation costs for submissions and evidence. Machine translation is not, and will not be treated as, an adequate substitute.

5. Avoid Running Parallel Proceedings (Forum Shopping)

Pursuing the same dispute simultaneously in arbitration and before a state court rarely ends well financially. Parties end up funding two sets of proceedings without obtaining two enforceable outcomes — one forum will, as a rule, decline to proceed, and the fees paid to get there are sunk. Forum shopping between arbitration and litigation is, in practice, one of the more reliable ways to increase — not reduce — the cost of resolving a dispute.

Happy to discuss how these levers apply to a specific dispute or contract.

Notes

¹ Under the SA KIG Taryfa Opłat (Table of Fees) in force since 1 January 2025, §4(2), a party pays 60% of the base arbitration-fee table when the dispute is decided by a sole arbitrator; the base fee at PLN 4,000,000 is PLN 72,000 plus 5% of the amount above PLN 1,000,000 = PLN 222,000. This arbitration fee already covers both SA KIG's administration and the arbitrators' remuneration (it is split 50/50 between the Court and the arbitrators internally) and excludes the flat, non-scaling PLN 3,000 registration fee. PLN converted at an illustrative rate of PLN 4 = US$1.

² Under the SIAC Schedule of Fees, the scale figure is the maximum payable to each arbitrator individually, so a three-member tribunal's arbitrator fees scale roughly threefold before blending with SIAC's fixed administration fee, which does not vary with tribunal size. The exact percentage reduction therefore depends on which fee schedule vintage and claim value are used; it is not a single fixed ratio the way the SCC and VIAC multipliers are.

³ Under Appendix IV, Art. 2(2) of the 2023 SCC Arbitration Rules (currently in force), each co-arbitrator receives 60% of the chairperson's fee, so a three-member tribunal's fees total 2.2× a sole arbitrator's — the SCC's administrative fee itself does not vary with tribunal size.

⁴ Under Art. 44(8) of the Vienna Rules 2021, in the version of 1 January 2025 (currently in force), the total fee for a panel of arbitrators is two-and-a-half times the rate of a sole arbitrator — again, this is the arbitrators'-fee component specifically; VIAC's administrative fee is calculated separately from the amount in dispute.

Sources

1. ICC Commission Report, Decisions on Costs in International Arbitration (2015).
2. New York City Bar Association, Awards of Costs in International Arbitration.
3. LCIA, Costs and Duration Analysis 2024 (3rd ed.).
4. CMS, Costs and Duration: A Comparison of the HKIAC, LCIA, SCC and SIAC Studies (used for context on HKIAC's fee model, not for the sole/three-arbitrator comparison).
5. Wikborg Rein, Comparing the Duration and Cost of International Arbitration (summary of ICC/SIAC calculator-based figures, applying the ICC Appendix III cost scale in force since 1 January 2017, unchanged and currently in force irrespective of the ICC Rules edition).
6. CCADR, Costs and Fees Allocation Within the Arbitral Award (Part IV).
7. National Law Review, Check, Please: Clarity in Costs Awards in Arbitration.
8. CCADR, ICC, SIAC & LCIA Rules on Arbitration Costs (Part III).
9. SCC Arbitration Institute, 2023 Arbitration Rules, Appendix IV — Schedule of Costs, Art. 2(2), currently in force (co-arbitrator fee = 60% of chairperson's fee).
10. VIAC, Vienna Rules 2021, in the version of 1 January 2025, Art. 44(8), currently in force (panel fee = 2.5× sole-arbitrator rate).
11. SIAC Schedule of Fees (2025), Arbitrator's Fees table — fee is the maximum payable to each arbitrator individually.
12. SA KIG (Arbitration Court at the Polish Chamber of Commerce), Taryfa Opłat, in force from 1 January 2025, §4(2).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.