Document Type

Article

Publication Date

2010

Abstract

This article offers specific guidelines for awarding costs in international commercial arbitration where the source of the arbitral tribunal’s authority to allocate costs – be it the parties’ arbitration agreement, applicable institutional arbitration rules, or otherwise – vests the tribunal, as is typically the case, with discretion. The guidelines proposed in this article are designed to encourage party choices that enhance international arbitration’s goals of time and cost effectiveness. Predictable (yet flexible) guidelines that serve international arbitration’s unique qualities should in turn serve to maximize the appeal of international commercial arbitration over its alternatives. It is anticipated that these guidelines serve as a “first word” on guidelines to govern cost allocation; further words, based on further experience and wisdom, may be both welcome and needed.

The objective throughout this proposed “experiment” in a “rules-rich procedure” for cost allocation in international commercial arbitration is not to dispose entirely or even largely of an arbitral tribunal’s discretion to allocate costs in accordance with the conduct and outcome of a particular arbitral proceeding, but rather to identify in advance guidelines for the exercise of that discretion, so that parties know what they are in for (a) before they sign up for international arbitration; (b) before they decide whether to pursue a particular claim, defense or counterclaim in arbitration; and (c) during the course of arbitration, but before they arrive at a final award, so that they are incentivized to make cost-efficient decisions in their conduct of the arbitration.

Disciplines

Dispute Resolution and Arbitration | International Law | Law

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