New ICC report gives insights into how arbitrators take decisions on costs

The ICC Report, Decisions on Costs in International Arbitration examines how the costs of an arbitration can be allocated between parties and sheds light on the specific roles of arbitrators, parties and counsel in using cost allocation as a case management tool.

Under the 2012 ICC Arbitration Rules, an arbitral tribunal has a broad discretion when it comes to allocating the costs of the arbitration between the parties.

While affirming that there is no definitive approach to costs allocation in international arbitration, the report, produced by the Task Force on Decisions as to Costs of the ICC commission on Arbitration and ADR*, describes current approaches and practices that can help arbitrators and parties to conduct ICC proceedings in an effective and cost efficient way.

The report identifies the cost allocation considerations that arbitrators take into account and considers how decisions on costs can be used not only to allocate costs fairly, but also as a means to improve efficiency during the proceedings.

Users would like decisions on costs to be predictable, but at the same time, the discretion enjoyed by arbitrators needs to be preserved so as to ensure that a fair result can be achieved in each case.

“Users would like decisions on costs to be predictable, but at the same time, the discretion enjoyed by arbitrators needs to be preserved so as to ensure that a fair result can be achieved in each case. The report describes how arbitrators can address both these needs – but it does not establish guidelines or endorse a specific approach,” said Christopher Newmark, Chair of the ICC Commission.

Topics covered in the report include the relevance on costs allocation of the procedural behaviour of the parties, how costs issues may be discussed at the early case management conference, how interim decisions on costs can be taken, dealing with in-house costs, the potential impact of  third party funding and success fee arrangements, and how tribunals assess the reasonableness of costs.

The report sets out the research upon which it is based, which comprises a review of decisions on costs in hundreds of ICC awards as well as reports from eight other arbitration institutions and summaries of reports on national approaches to cost decisions from over 40 ICC national committees.

Following significant revisions made to the ICC Arbitration Rules in 2012, the new report is ICC’s latest tool for encouraging greater control of time including ICC’s 2012 Report on Techniques for Controlling Time and Costs in Arbitration and 2014 Guide on Effective Management in Arbitration.

For a copy of the full report visit: Decisions on Costs in International Arbitration – ICC Arbitration and ADR Commission Report.

*Task Force on Decisions as to Costs Co-chairs: Bernard Hanotiau (Hanotiau & van den Berg), Julian Lew (20 Essex Street), Wendy Miles (Boies, Schiller & Flexner (UK) LLP) and Philippe Cavalieros (Winston & Strawn Paris).

Upcoming worldwide launch events

Launch event in London, 2 December 2015.

Launch event in New York, 20 January 2016.

Launch event in Shanghai, 3 March 2016.

Launch event in Panama City, 17 March 2016.

Launch event in Istanbul, 30 March 2016.

Launch event in Dubai, 13 April 2016.

Launch event in Hong Kong, 29 June 2016.