Costs in International Arbitration - Chapter 36 - Handbook on International Commercial Arbitration

Author(s):

Peter Ashford

Page Count:

4 pages

Media Description:

PDF from "Handbook on International Commercial Arbitration"

Published:

October, 2009

Jurisdictions:

International

Practice Areas:

Commercial Disputes,

Costs and Damages

Author Detail:

Peter Ashford is Solicitor of the Supreme Court and a Partner at Cripps Harries Hall LLP and is Head of the firm's Commercial Peter Ashford is a Partner and Head of commercial dispute resolution in the leading United Kingdom Firm of Cripps Harries Hall LLP, Tunbridge Wells, United Kingdom. Mr. Ashford advises on a wide range of commercial disputes with a particular emphasis on substantial commercial contract disputes, especially those involving an international aspect, partnership and LLP disputes, professional issues for solicitors and professional negligence. He is particularly experienced in complex, high value claims and acts for many international clients. He handles disputes in court, arbitration, mediation and disputes without any formal process. Mr. Ashford received his training in London and qualified in 1986. He joined Cripps Harries Hall LLP in 1987 and became a partner in 1991.

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Description:

Originally from Handbook on International Commercial Arbitration

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There can be little doubt that international commercial arbitration is expensive. A survey by PricewaterhouseCoopers in 2006 found that whilst 52% of respondents had spent U.S. $100,000 – U.S. $500,000 in their most recent international arbitration, 12% had spent in excess of U.S. $5 million. Similarly, 65% of respondents viewed international arbitration as more expensive than transnational litigation, 23% as about the same, and only 12% as cheaper.

These findings are not surprising. Unlike judges (who are salaried by the state), arbitrators require their fees and expenses to be paid, and these can be substantial. For example, if it is an ICC arbitration where fees are assessed on an ad valorem basis—a U.S. $50 million dispute would carry fees for the arbitrators in the range of U.S. $48,750 – U.S. $222,600 per arbitrator. The fee is fixed by the ICC Court taking into consideration the diligence of and time spent by the Arbitral Tribunal, the rapidity of the decision making and complexity of the subject matter. Moreover, there are the fees of the institution itself. Again, a U.S. $50 million dispute under the ICC commands a fee of U.S. $70,800. As an alternative to a fixed fee for the institution, there may be the fees and expenses of a secretary or registrar. In an LCIA arbitration, the time of the registrar is charged at U.K. £200 per hour. Finally, the nature of the constitution of the Arbitral Tribunal is such that any Tribunal will not have facilities to hold hearings. Rooms have to be hired for meetings and hearings, as well as stenographers, creating a layer of cost not found in litigation where the courts are generally provided free by the state.

Those from the U.S. and some civil law regimes may not be as familiar with, or at least have direct experience of, the concept of losing party paying the winning party’s costs beyond disbursements or “out-ofpocket” expenses and sometimes a modest fixed cost. The general rule in the U.S. is “that a successful litigant is not permitted to recover his attorney’s fees as damages or as reimbursable costs.”