In a recent column, we discussed how interest awards in international arbitration often do not get the level of analysis and care that they probably deserve, especially considering the significant amounts that can be included in such awards.1 Many arbitration users probably consider that the awards of costs in international arbitration are likewise often the result of a black-box type determination. There is evidence, notably as seen in published awards in investor-state arbitrations, that some arbitrators appear not to delve into the reasonableness of parties’ costs and to accept the costs claimed by the prevailing party. Such an approach, of course, can unfairly reward and punish parties, should the costs have been excessive or there be significant issues as to which both parties prevailed. Other times, arbitral tribunals leave costs to be borne by the parties that incurred them, just as they generally are in U.S. court proceedings.
The International Chamber of Commerce (ICC) is now trying to shine light on this subject. A report recently published by the ICC’s Task Force on Decisions as to Costs surveyed the practices and institutional rules and guidelines on the assessment of costs in international commercial arbitration.2 The purpose of the report is to inform users of arbitration how tribunals may allocate costs in accordance with the parties’ agreement and/or any applicable rules or law.
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