It is always important to have a full understanding of the various costs regimes before starting an arbitration process. Our brilliant team can advise you on this and more. Contact us today for help

It is vitally important to understand who bears the costs in an Arbitration process – our brilliant team at FWJ can help guide you through this.

As with any dispute, costs are often a very high concern for the parties. Costs can include:

  • legal representative fees;
  • expert’s fees, or
  • tribunal fees.

As arbitration is a contractual method of dispute resolution, the parties can pre-agree how costs are to fall. Usually this would either take the form of either both parties agreeing to bear their own costs, or for the loser to pay the winner’s costs. Curiously enough, this aspect of arbitration rarely makes it into an arbitration clause, leaving the parties at the mercy of the tribunal.

Wider powers of Arbitrators in England & Wales

In England and Wales, under the Arbitration Act 1996, arbitrators have far wider powers than the Court in ordering costs.

By way of example, success fees are not recoverable at Court (under Conditional Fee Agreements concluded after 1 April 2013), nor are any premiums payable under ATE insurance policies. However, the Arbitration Act allows under s59(1) c, makes provision for the arbitrator to award also the “legal or other costs of the parties”. Insofar as these costs are connected with the arbitration, they appear to be recoverable, as seen in Essar Oilfields Services Limited v Norscot Rig Management Pvt Limited (2016) QBD, where the winning party recovered not just the legal fees, but also the success fee which the winning party had to pay to a third party. This was not an insignificant sum, as it was 300% of the sum advanced by the funder to the winning party, equating some £1.94 million.    

In England and Wales, the default position under the Arbitration Act is that costs should be awarded to the winning party. This is also the case under the UNCITRAL Arbitration rules, but is not necessarily the default position in other jurisdictions or for different arbitral institutions, and parties must take care to investigate this further, ideally prior to drafting their arbitration clause or request for arbitration.

Whatever your Arbitration enquiry – our team has the expertise to help you. FWJ are experienced in helping clients domestically and internationally resolve their disputes through the use of Arbitration and regularly advice on the question of Arbitration costs. No matter what your claim or dispute – call our team of experts today and we can help.

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