Originally from Handbook on International Commercial Arbitration - Second Edition

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Whenever called upon to make any decision or award, a tribunal should make an order for costs. Failure to make any order may be an abdication of responsibility and leave the parties in a state of uncertainty. That is not to say that one of the parties must be found to be at fault and made to pay costs. It is quite acceptable to defer a decision on the costs until the end. Deferring the decision or making costs dependent on some future event such as success is entirely proper and, often, the only way that interim costs orders can be made.

Part of the final award should deal with the deferred costs orders as well as the costs liability for the substantive issues. Orders that have been made for “Costs in the Reference” will be dealt with automatically by a decision on the costs of the reference. Costs that have been reserved ought to be specifically considered and either made costs of the reference or made specific orders. If nothing is said costs reserved would fall in with the costs of the reference.

Many tribunals make all orders for costs during the currency of the reference as ‘Costs in the Reference’ and then, at the time of the final award, make a costs award that, to the tribunal, does justice between the parties. There is something to commend that. By that stage the overall ‘winner’ is known as is the history. The disadvantage is that, with the best will in the world, the tribunal may pay insufficient regard to costs that the losing party might legitimately expect to be entitled to, for example, for successfully applying for some interim relief.

The range of costs orders is large. Some of the more popular orders that might be made with the effect of the term set against them are in Appendix 28.

The tribunal has a wide and unfettered jurisdiction on costs and can craft a costs order to do justice to the particular situation. Those in the appendix are the more usual examples