Originally from American Review of International Arbitration - ARIA

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COST AWARDS IN INTERNATIONAL COMMERCIAL
ARBITRATION: PROPOSED GUIDELINES FOR PROMOTING TIME
AND COST EFFICIENCY
Robert H. Smit and Tyler B. Robinson∗
 

I. INTRODUCTION

Arbitration costs -- "procedural" (arbitrator fees and expenses and
administrative fees) and "party" (attorneys' and experts' fees and expenses) -- are
on the rise in international commercial arbitration and a growing source of user
disaffection. The more significant arbitration costs become, the more important
is the manner in which those costs are allocated and awarded as part of an arbitral
award. While parties are free to prescribe the manner of allocating arbitration
costs in their arbitration agreement, they seldom do; or they do so in such general
terms as to provide little concrete direction or guidance to the arbitral tribunal.
Cost awards, commentators have observed, are therefore by and large entrusted to
the broad discretion of the arbitral tribunal appointed in each particular case -- as a
result of which cost awards vary wildly from case to case and "sometimes
fundamentally without any apparent reason."3