Originally from World Arbitration And Mediation Review (WAMR)

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"DAMAGES IN INTERNATIONAL ARBITRATION:

STRATEGIES, TECHNIQUES & PRESENTATION"

INTRODUCTION TO ACT IV
Claudia T. Salomon, Workshop Co-Chair

We are now into Act IV, the final act of this complex play. The
background for Scene I is that the Parties have made written
submissions on cost and the Tribunal has asked the Parties to come
for a hearing to discuss their cost submissions. You are going to hear
different views on how the Tribunal should consider costs, whether
there should be a loser pay policy or whether each side should bear its
own costs. And you will see that counsel making these arguments are
making them from the perspective of whether they are likely to be the
winner or the loser in these proceedings.
We have a very distinct Tribunal with us today. As Chair, we have
Bill Rowley, who many of you know from Toronto. We have Dushyant
Dave from New Delhi, India, and Hilary Heilbron from London. Hilary
has recently written a book on international arbitration in London.
Counsel for United is Steven Smith from O’Melveny & Myers in San
Francisco and counsel for Paragonia is Ken Reisenfeld who has
recently joined King & Spalding in Washington, D.C. The scene opens
with Ken on the telephone just before the hearing.

ACT IV – COST SUBMISSIONS AND THE TRIBUNAL’S
DELIBERATIONS

SCENE I – COST SUBMISSIONS

KENNETH REISENFELD: (on telephone) Yes, yes, I understand
your concern about us low-balling the amount of attorneys’ fees and
expert witnesses in our cost submission. But you really have to
understand the difficult situation you are in. The Tribunal has already
determined that you breached the agreement by terminating it
prematurely and also have breached the treaty. And at your request,
we took a very strong position in settlement negotiations, which led
United to actually commence this arbitration. At the hearing, this
afternoon, the Tribunal will likely apply one of three tests to
apportion the cost of this proceeding: the “loser pay” rule, a proration
of the costs based upon the relative success of the Parties, or ordering
each Party to bear its own expenses. Our goal in this hearing will be