Conference on Rules for Institutional Arbitration and Mediation

20 January 1995, Geneva, Switzerland

Fees and Costs
by Francis Gurry, Director
WIPO Arbitration Center

Few subjects touch the interests of those involved in international commercial arbitration more closely than fees and costs. Despite its great importance, however, it is a subject that lends itself only with great difficulty to a comparative analysis, since many of the principal issues involve non-comparable data. Three examples serve to illustrate this problem of non-comparability.

The first example is the comparison between the costs of arbitration and the costs of court litigation. With the assistance of a number of assumptions, it may be possible to make an estimated comparison of the direct costs involved in each. However, account must also be taken of indirect costs, which involve a series of imponderables such as costs associated with appeals in the court system, opportunity loss as a result of delays incurred in waiting for court cases to be called, and the various costs associated with tactical and strategic decisions that would ordinarily be taken in the course of litigation. By their nature, these indirect costs can only be quantified after the fact and, since they require knowledge of the intentions of both parties, can only rather inaccurately be estimated in advance.

A second issue illustrating the problem of non-comparability is the comparison of the administrative fees and charges of the various arbitration institutions. The system for assessing such fees differs from one institution to another, some institutions’ fees being calculated by reference to the amount in dispute (such as the International Court of Arbitration of the ICC (ICC)), and others being based on the amount of time involved in the administration of a case (such as the London Court of International Arbitration (LCIA)) or partially dependent on the length of time for which the arbitral proceedings run (for example, the hearing fee and the processing fee levied by the American Arbitration Association (AAA)). Moreover, even if, with the help of some brave assumptions, a comparison is made, the nature of the administration of an arbitration provided by institutions differs, justifying different levels in the fees charged.

A third issue is the comparison of the method of determining, and the amount of, arbitrators’ fees. Some institutions determine such fees entirely by reference to time spent (for example, the AAA and the LCIA), while others determine them by reference to a percentage of the amount of the value in dispute (for example, the ICC).

The subject of fees and costs is also characterized by its vastness. The present paper does not purport to deal with all of the manifold issues involved. It will, rather, describe the system envisaged for the treatment of fees and costs under the WIPO Arbitration Rules and seek to explain why the main policy choices reflected in those Rules (never, in this area, matters that are without controversy) were taken.

ADMINISTRATIVE FEES OR CHARGES

Basis of Assessment

The majority of arbitration institutions assess their administrative fees on an ad valorem basis by reference to the amount in dispute. This is the case under the Arbitration Rules of the Chamber of Commerce and Industry of Geneva ("the CCIG Rules"), the ICC Rules of Arbitration ("the ICC Rules"), the International Arbitration Rules of the Chamber of National and International Arbitration of Milan ("the Milan Rules"), the Arbitration Rules of the Netherlands Arbitration Institute ("the NAI Rules"), the Rules of the Arbitration Institute of the Stockholm Chamber of Commerce ("the SCC Rules"), the Rules of Arbitration of the International Arbitral Centre of the Federal Economic Chamber, Vienna ("the Vienna Rules") and the International Arbitration Rules of the Zurich Chamber of Commerce ("the Zurich Rules").

A salient exception to assessment by reference to the value of the amount in dispute is the system practiced by the LCIA, whose Schedule of Costs provides for a flat registration fee and for other administrative costs assessed by reference to the amount of time spent by the Registrar, Deputy Registrar and Secretariat of the LCIA in the administration of an arbitration.

A further exception is to be found in the administrative fees of the AAA under its International Arbitration Rules ("the AAA IA Rules"), which provide for a composite system. Under the AAA IA Rules a filing fee is payable, which is assessed on an ad valorem basis by reference to the amount of the claim. In addition, a flat hearing fee is payable by each party for each day of hearing, as well as a flat processing fee, payable by each party 180 days after the initiation of a case and every 90 days thereafter.

The WIPO Arbitration Rules follow the system applied by the majority of institutions in assessing the administrative fees payable to the WIPO Arbitration Center on an ad valorem basis by reference to the amount in dispute. The criticism that has been made of the ad valorem system is that it does not necessarily, in any given case, reflect the amount of administrative time devoted to the arbitration by the administering institution. On the other hand, it accommodates the factor of responsibility on the part of the administering institution and has the great advantage of providing the parties with certainty in estimating their cost-exposure in respect of an arbitration.

The Fees of WIPO Arbitration Center

Two fees are payable to the WIPO Arbitration Center in respect of an arbitration administered by it.

The first is a registration fee (1), which is payable with the Request for Arbitration. The basis for calculating the registration fee is set out in the Schedule of Fees to the WIPO Arbitration Rules.

The registration fee is not refundable. It must be paid in order to set in motion the various steps in the arbitral procedure, since action will not be taken on a Request for Arbitration by the Center until the registration fee has been paid. If a Request for Arbitration is received by the Center without the payment of the registration fee, the arbitration would, by virtue of Article 7 of the WIPO Arbitration Rules, nevertheless have a date of commencement for the purposes of determining the suspension of the running period of any applicable statute of limitations. A claimant could not, however, merely file such a request without ever paying the registration fee in order to take advantage of an indefinite suspension of the running period of an applicable statute to limitations, since Article 67(d) of the WIPO Arbitration

Rules provides that a claimant shall be deemed to have withdrawn its Request for Arbitration if it fails, within 15 days after the second reminder in writing from the Center, to pay the registration fee.

The second fee payable to the WIPO Arbitration Center is an administration fee (2), the basis of the assessment of which is also set out in the Schedule of Fees to the WIPO Arbitration Rules.

The administration fee is payable by the claimant within 30 days after the commencement of the arbitration. For this purpose, the Center notifies the claimant of the amount of the administration fee as soon as possible after receipt of the Request for Arbitration. In addition, where the respondent makes a counter-claim, an administration fee is also payable by the respondent within 30 days after the date on which the counter-claim is made. Again, the Center notifies the respondent of the amount of the administration fee as soon as possible after receipt of notification of the counter-claim. Since the Statement of Claim and the Statement of Defence may be filed separately from the Request for Arbitration and the Answer to the Request and since, in such cases, they are submitted direct to the Arbitral Tribunal (3), Article 68(f) provides for the tribunal to inform the Center of the amount of claim or counter-claim in order to enable the Center to notify the claimant or the respondent of the administration fee payable.

Where a claim or counter-claim is increased, the amount of the administration fee will be correspondingly increased.

The registration fee and administration fee cover all the services provided by the WIPO Arbitration Center, which include

The fees do not cover the provision of recording services or interpretation, translation and secretarial assistance requested by the parties or the tribunal, which, where made available by the Center, are separately billed at cost.

The Determination of the Amount of a Claim or Counter-Claim

While the amount of the claim or counter-claim may, in the ordinary case, be apparent from the written submissions, three situations raising special questions in relation to the determination of the amount of the claim or counter-claim deserve particular mention.

The first situation is where the amount of the claim is not specified at the time of submitting the Request for Arbitration so that the claimant cannot calculate the amount of registration fee payable. In this situation, the Schedule of Fees to the WIPO Arbitration Rules provides for a registration fee of $1,000 to be payable, subject to adjustment when the Statement of Claim is filed and the amount of claim specified.

The second situation is unliquidated claims. In this situation, the Schedule of Fees to the WIPO Arbitration Rules provides for the Center to determine an appropriate administration fee. The Center will do this after consultation with the parties and the arbitrators.

The third situation concerns the treatment of interest claims. The general rule is that interest claims will not be taken into account in determining the amount of the claim or counter-claim for the purposes of determining the registration fee or administration fee payable. There are two exceptions. The first is where the interest claim constitutes the main claim itself, such as a claim for the interest, but not the principal, due on a loan. The second situation is where the interest claim exceeds the amount of the main claim, in which case the interest claim will replace the main claim as the basis for calculating the registration fee and the administration fee (4).

The Effect of Settlement on Fees

Settlement of a case after the submission of the Request for Arbitration and payment of the registration fee does not affect the registration fee or give rise to any right to reimbursement of that fee, which is, by Article 67(b) of the WIPO Arbitration Rules, non-refundable.

However, the administration fee is levied with a view to the administration of an arbitration until delivery of the final award. Early settlement should, therefore, have an effect on the administration fee. The following principles are applied in order to determine that effect:

ARBITRATORS’ FEES

The determination of the fees payable to the arbitrators is one of the principal functions of the administering authority. The administering authority constitutes a buffer between the parties and the arbitrators, thereby avoiding the necessity for the parties to engage directly in negotiations with the arbitrators about fees with the consequent fear, expressed by some, of offending the arbitrators or putting them off-side.

The determination of the arbitrators’ fees takes place after consultations between the administering authority and the arbitrators and between the administering authority and the parties. The consultations take place at the time of the appointment of the arbitrators.

Principal Systems for Determining the Arbitrators’ Fees

Two main systems are used by arbitration institutions for determining the remuneration of arbitrators: remuneration based on time spent and remuneration based on a percentage of the amount in dispute.

The time-based system is used by the AAA under the AAA IA Rules and by the LCIA, both of which envisage the determination of daily or hourly rates and the payment of the arbitrators according to those rates for the amount of days or hours spent on the arbitration.

The system of remuneration determined as a percentage of the amount in dispute was pioneered by the ICC and is used also under the Milan Rules and the Vienna Rules.

Both the CCIG Rules and the Zurich Rules use interesting combinations of the time-based and amount-in-dispute systems. The CCIG Rules (6) provide for the fees of the arbitrators to be calculated "according to the time reasonably spent on the resolution of the dispute at an hourly rate," but subject the total amount of fees payable to a ceiling, which is expressed as a percentage of the amount in dispute. The Zurich Rules (7) inverse the two measures. Arbitrators’ fees are calculated as a percentage of the amount in dispute, but with the proviso that a minimum amount, calculated by reference to an hourly fee, must be paid.

Both the time-based and amount-in-dispute systems have their supporters and the arguments for and against each are well-known (8).

The time-based system has the advantage of relating remuneration to actual work done and can accommodate responsibility, complexity and other relevant factors by reflecting them in higher hourly or daily rates. On the other hand, it does not provide an incentive for efficiency in the individual case. The safeguard against abuse lies in the system’s capacity to correct itself by punishing inefficiency with the threat and practice of ensuring that the inefficient arbitrator receives no futher appointments.

The system based on a percentage of the amount in dispute has the disadvantage, from the arbitrators’ point of view, that the amount of remuneration will not necessarily correspond to the amount of time spent, with the consequence that appointment in large cases generally subsidizes appointment in smaller cases (9). It has, however, the advantages of being easy to apply, transparent and providing predictability to the parties in relation to their cost-exposure in an arbitration. It has been said to create an incentive for efficiency since the absence of a time-based rate gives the arbitrators no reason to prolong the case (10).

The system based on the amount in dispute also has the advantage of providing the parties with a measure of control over their cost-exposure. In this respect, one observation frequently heard in relation to the system is that it usually creates a disparity between the total remuneration received by arbitrators and that received by counsel (11). However, it must be borne in mind that parties have the opportunity to exercise some cost-control over counsel by terminating their retainer, whereas this mechanism is not available to the parties in relation to the arbitral tribunal.

The WIPO Provisions

The system followed in the WIPO Arbitration Rules provides for the Center to determine the arbitrators’ fees on the basis of a percentage of the amount in dispute ("the amount of claims"). The relevant scale is set out in the Schedule of Fees. Like the ICC scale, it sets out minimum and maximum fees in respect of each of a series of successive ranges of amounts of claims. The decision to locate the arbitrators’ remuneration at a point within the range of minimum and maximum fees is taken on the basis of the circumstances of the dispute, including, in particular, "the estimated time needed by the arbitrator for conducting the arbitration, the amount in dispute, the complexity of the subject-matter of the dispute, the urgency of the case and any other relevant circumstances of the case" (Article 69(b)).

The scale sets out minimum and maximum ranges both for a sole arbitrator and for three-person tribunals. In general, the total remuneration for a three-person tribunal corresponds to two and a half times the remuneration that a sole arbitrator would receive (12), the factor of three being discounted to two and a half on the basis that work and responsibility are shared where more than one arbitrator is appointed. As to the division of the total remuneration amongst the members of a three-person tribunal, the Schedule of Fees to the WIPO Arbitration Rules (13) provides for the fees to be distributed between the three persons in accordance with the unanimous decision of those three persons. In the absence of such a decision, the distribution is 40% for the presiding arbitrator and 30% for each of the other two arbitrators.

While the WIPO Arbitration Rules provide for remuneration on the basis of a percentage of the amount of claims, they also allow other methods of determining remuneration where the parties and the arbitrators so agree (see Article 69(b)). Thus, if the parties in a case wish to have the arbitrators’ fees determined on the basis of time spent, they would be free to so agree with the arbitrators.

The Determination of the Amount of Claims

The amount of claims on the basis of which the arbitrators’ fees are calculated is the total of the amount of all claims and the amount of any counter-claims.

Interest claimed is treated for the purposes of determining the arbitrators’ fees in the same way as for the purpose of determining the amount of the administration fee, that is, interest is not included in the amount of claims, except where the interest claim constitutes the principal claim or the amount of the interest claim exceeds the amount of the principal claim, in which latter case the amount of the interest claim would be considered to be the amount of the claim for the purpose of determining the arbitrators’ fees.

Similarly, unliquidated claims are treated in the same way in respect of the arbitrators’ fees as in relation to the administration fee. The Schedule of Fees to the WIPO Arbitration Rules provides, in this regard, that the Center shall determine an appropriate value for the unliquidated claim or counter-claim for the purpose of determining the arbitrators’ fees, after consultation with the arbitrators and the parties.

Effect of Settlement on Arbitrators’ Fees

Where a case is settled before the delivery of the final award, the amount of fees payable to the arbitrators will be determined in accordance with the circumstances of the case (14). The right to a fee on the part of the arbitrators will only arise after the transmission to them of the file in accordance with Article 37 of the WIPO Arbitration Rules (15). Should settlement occur after the transmission of the file, the amount of the fees due to the arbitrators will be determined having regard to the stage at which settlement occurs and the work already done by way of preparatory conferences held, study of the files, the commencement of evidentiary or other proceedings, and so forth. It may be borne in mind, however, that the performance characteristic of an arbitrator is the delivery of the award. In this respect, the arbitrators’ mission, in which the work emphasis falls more towards the concluding part of the arbitral procedure, may be contrasted with the role of counsel, for whom the work emphasis falls more towards the commencement of the arbitral proceedings and the preparation of the case.

DEPOSITS OF COSTS (ADVANCES TO COVER COSTS)

All Arbitration Rules require the payment of a deposit in order to provide financial security in advance for the costs of the arbitral procedure. The provisions governing such deposits in the WIPO Arbitration Rules are contained in Article 70.

The costs of the arbitration which are intended to be covered in advance by the deposits are referred to in Article 71 of the WIPO Arbitration Rules and consist of the arbitrators’ fees; the properly incurred travel, communication and other expenses of the arbitrators; the costs of expert advice and other assistance required by the tribunal; and other expenses necessary for the conduct of the arbitration proceedings (such as transcripts or recordings).

The amount of the deposits that must be advanced are determined by the WIPO Arbitration Center. It is difficult to give any general guidelines concerning the likely amount of deposits, since these amounts must be determined in view of all the circumstances of the particular case. It may be noted, nevertheless, that the Arbitration Institute of the Stockholm Chamber of Commerce publishes a guideline table for determining the amount to be paid by way of deposit of costs in arbitrations administered by it. It retains, however, the power to determine the exact amount in any given case (16).

The amount fixed initially by the Center for the deposits is provisional. Under Article 70(b), the Center may require the parties to make supplementary deposits in the course of the arbitration.

Most of the Rules of arbitration institutions require that the deposit of costs be advanced in equal shares by the claimant and the respondent (17), reflecting the fact that, by entering into the agreement to arbitrate, both parties commit themselves to the arbitration process and should be required to participate in financing that process until the decision on the merits and on the award of costs is taken by the arbitral tribunal (18). However, it remains the case in practice that parties sometimes default in their obligation to advance their share of the deposit of costs or engage in other delaying tactics, which have ramifications on the deposit of costs, with the intention of disrupting the arbitration. The WIPO Arbitration Rules contain two provisions directed at these sorts of practices.

The first provision is directed at the situation where one party does not pay its share of the deposit of costs. Article 70(c) of the WIPO Arbitration Rules provides, in this regard, that if the required deposits are not paid in full within 30 days after receipt of the corresponding notification from the Center, the Center shall so inform the parties in order that one or other of them make the required payment. A similar provision is to be found in most Arbitration Rules (19). If one party so advances the share of the other, defaulting party, it will be reimbursed should the defaulting party later pay its required share. Alternatively, the award on costs will deal with the question of reimbursement.

The second provision addresses the situation in which an inflated counter-claim is made by the respondent, with the consequence of inflating the deposit of costs and possibly disrupting the proceedings (20). Article 70(d) is directed at this sort of situation (21). It empowers the Center, in its discretion, to establish two separate deposits on account of claim and counter-claim, respectively, where the amount of the counter-claim "greatly exceeds the amount of the claim or involves the examination of significantly different matters, or where it otherwise appears appropriate in the circumstances." If two separate deposits are so established, the totality of the deposit on account of claim must be paid by the claimant, and the totality of the deposit on account of counter-claim by the respondent. Article 70(e) complements the provision in its mission of discouraging artificial and inflated counter-claims by providing that, if a party fails, within 15 days after a second reminder in writing from the Center, to pay the required deposit, it shall be deemed to have withdrawn the relevant claim or counter-claim.

The Center will consider the possibility of deposits being paid by instalments in appropriate circumstances. No rules are fixed in advance in this respect. While in cases where large amounts are at stake instalments can be advantageous to the parties, it must be borne in mind that frequent requests for contributions to the deposit can be an irritant to the parties and can introduce disruption and delay in the proceedings.

Separate accounts are established by the Center for deposits in each case and the interest accruing on the amounts held on deposit is credited to the parties.

THE AWARD OF COSTS

The provisions in Arbitration Rules on the award of costs, as well as the decision on costs in the award itself, share something of the same pathology as arbitration clauses in contracts. They come at the end of the process, after the stimulating issues on substance. Yet, like the arbitration clause that is acted on, the allocation of the costs of the arbitration and of the costs incurred by the parties in respect of the arbitration are very significant matters and important elements in evaluating the overall price of the arbitration process.

Costs are usually divided into two categories: first, the costs of arbitration, which cover the fees of the administering authority and the arbitral tribunal and the expenses of the arbitral tribunal in conducting the arbitration; and secondly, the costs incurred by each party in presenting its case, which cover mainly the amounts paid by each party for legal and technical assistance and in respect of party witnesses. The WIPO Arbitration Rules reflect this distinction, Article 71 dealing with the award of the costs of arbitration and Article 72 dealing with the award of costs incurred by a party.

The significance of the distinction is twofold. First, Rules usually impose an obligation on the arbitral tribunal to fix or determine the costs of arbitration in its award, whereas they often merely empower the tribunal to do so in the case of costs incurred by the parties (22). Secondly, the costs of arbitration correspond to the projected expenditure intended to be covered by the deposits of costs, which may, therefore, require an accounting and reimbursement between the parties if those deposits have not been advanced in equal shares. It is thus essential that the award deal with the allocation of those costs. In contrast, the costs incurred by each party in presenting its case are borne entirely by each party throughout the arbitral procedure.

Costs of Arbitration

As mentioned, the Rules of most institutions require the tribunal to fix or determine the amount of the costs of arbitration in its award. The Vienna Rules seem to constitute an exception in this regard. Article 23 of those Rules requires the Secretary of the International Arbitral Center of the Federal Economic Chamber in Vienna to fix the costs of arbitration, while Article 19 requires the tribunal to "state" the costs fixed by the Secretary in the final award.

In order to fix the costs of arbitration, the tribunal must, of course, decide which items are covered by the expression. Not all Rules provide detailed guidance. The CCIG Rules (23) and the NAI Rules (24) use the expression "costs of arbitration" without further definition. The WIPO Arbitration Rules follow the alternative practice of specifying a non-exhaustive list of the items covered by the expression "costs of arbitration." Article 71 provides in this regard that they shall consist of:

The above-mentioned costs, together with the registration and administration fees payable to the Center, are the amounts for which the tribunal is required in its award to allocate responsibility for payment.

Two main approaches are to be found in the various Rules in relation to the question of the principles on the basis of which the tribunal will allocate responsibility for the costs of arbitration.

The first approach sets out a general rule that the losing party shall bear the costs of arbitration, but gives the tribunal a discretion to vary the general rule in the light of the circumstances of the case. This approach is followed in the NAI Rules, Article 61(2) of which provides that the "losing party shall be condemned to bear the costs, except in special cases at the discretion of the arbitral tribunal"; the SCC Rules, Article 29 of which provides that the "losing party shall be ordered to pay such compensation and costs... unless the circumstances call for a different result"; and the Zurich Rules, Article 56 of which provides that the "costs of the proceedings are, as a rule, borne by the losing party," but allows the arbitral tribunal "for special reasons... [to] ... depart from this rule, especially if the proceeding became without object or if a party caused unnecessary costs."

The second approach, to be found in the AAA IA Rules (25), the ICC Rules (26), the LCIA Rules (27), the Milan Rules (28), the UNCITRAL Rules (29) and the Vienna Rules (30), either accords the tribunal full discretion in allocating responsibility for bearing the costs of arbitration, or qualifies that discretion only by a requirement to have regard to the circumstances of a case.

Article 71 of the WIPO Arbitration Rules tends to follow the first of these two approaches. It requires the tribunal to apportion the costs of arbitration "in the light of all the circumstances and the outcome of the arbitration," the latter part of the phrase implying that loss on the merits ordinarily carries responsibility for bearing the costs of arbitration.

There appear to be no fixed rules concerning those circumstances other than the result on the merits which will influence the decision on the allocation of responsibility for costs or modify the general tendency to award costs against the losing party. Certain factors seem, however, to assume particular importance (31). Those factors include the conduct of the parties in relation to the arbitration, particularly, whether there has been any undue delay in bringing a claim and dilatory or obstructive behavior in the course of the arbitral proceedings, and whether the claims raised questions of difficulty on which reasonable persons could in good faith disagree.

Costs Incurred by a Party

Article 72 of the WIPO Arbitration Rules empowers the tribunal to order, in its award, a party to pay the whole or part of reasonable expenses incurred by the other party in presenting its case. The provision provides the tribunal with the authority to do so, rather than imposes an obligation on the tribunal to do so, as a concession to the divergent practices in various legal systems concerning the award of legal costs, which can accordingly be accommodated by the tribunal in a given case.

Most Rules include a non-exhaustive indication of what expenses may be subject to the power (or obligation, where it exists) to order a party to pay. Article 72 of the WIPO Arbitration Rules uses the general formula of "expenses incurred ... in presenting its case," and provides that they shall include "those incurred for legal representatives and witnesses." The Rules do not, therefore, enter into the difficult question of whether a party may be required to pay the cost of in-house counsel or in-house expertise used by the other party, but leaves this for the determination of the tribunal.

Once the tribunal has decided which expenses incurred by a party may be taken into account, it must decide to which extent those expenses may be covered by the order for the other party to pay. Various formulae are used in Rules in this regard. In respect of the costs of legal representation, the AAA IA Rules use the qualification "reasonable" costs (32), the ICC Rules use the qualification "normal" (33) and the NAI Rules use "necessary" (34). In contrast, the CCIG Rules (35) and the LCIA Rules (36) leave the reference to legal costs incurred by a party unqualified. Article 72 of the WIPO Arbitration Rules uses the qualification "reasonable." The qualification serves at least to require the tribunal to address the question of the appropriateness or reasonableness of legal expenses incurred where it decides to make an order to pay, rather than simply accepting such expenses on face value.

The question of the principles according to which a tribunal may decide to order one party to pay the expenses incurred by the other party in presenting its case is treated in the various Rules in the same way as in relation to party costs. Thus, the CCIG Rules (37), the NAI Rules (38) and the SCC Rules (39) create a general rule favoring the award of party costs against the losing party, but subject that rule to the possibility of modification in the light of the circumstances of a case.

Article 72 of the WIPO Arbitration empowers the tribunal to award party costs "subject to any contrary agreement by the parties and in the light of all the circumstances and the outcome of the arbitration." The mention of any contrary agreement by the parties provides for the possibility that, particularly in large cases, the parties may have agreed in the arbitration agreement that each would bear the costs of presenting its case.

Again, no fixed rules prevail in determining what circumstances other than the result of the arbitration will influence the decision on party costs. Those factors which assume importance, however, are the practices of the legal systems of the parties, the conduct of the parties in the arbitration and the question of whether the claims raise issues on which good faith differences of opinion can reasonably exist.

Notes

1. See Article 67, WIPO Arbitration Rules.

2. See Article 68, WIPO Arbitration Rules.

3. See Articles 5, 41(a) and 42(a), WIPO Arbitration Rules and the paper on "The Commencement of Arbitral Proceedings," supra.

4. This is the solution adopted in paragraph 2.1, Schedule of Arbitration Costs, Zurich Rules. For the ICC practice, see Eric A. Schwartz, "The ICC Arbitral Process, Part IV: The Costs of ICC Arbitration" (1993) 4 ICC International Court of Arbitration Bulletin 8-23, 13.

5. Cf. the approach adopted in the SCC Rules, Article 29: "If a case is terminated before an award has been rendered, the arbitral tribunal may decide that the parties shall pay compensation to the Institute and the arbitrators. If a case is terminated before it has been referred to the arbitral tribunal, the Institute will determine the amount of compensation due to it."

6. See Article 34.1 and the Schedule for Arbitrators’Fees.

7. See Schedule of Arbitration Costs, paragraphs 2.1 and 2.2.

8. See Alan Redfern and Martin Hunter, Law and Practice of International Commercial Arbitration (1991, 2nd ed., Sweet & Maxwell) 250-252; W. Lawrence Craig, William W. Park and Jan Paulsson, International Chamber of Commerce Arbitration (1990, 2nd ed., Oceana) 38-41 and 353-357; Michael Bühler, "Costs in ICC Arbitration: A Practitioner’s View (1993) 3 American Review of International Arbitration 116-152, 129-132

9. Craig, Park and Paulsson, op.cit. 357; Redfern and Hunter, op.cit. 250.

10. Craig, Park and Paulsson, op.cit. 356.

11. Ibid. 357.

12. Cf. Article 24(6) of the Vienna Rules: "The rates quoted in the Schedule for arbitrators’ fees are the fees for sole arbitrators. In any case they shall be raised to two-and-a-half times the amounts quoted if an arbitral tribunal is appointed and up to three times those amounts in the event of the particular difficulty of a case."

13. See paragraph 6 of the Notes on Arbitrators’ Fees in the Schedule of Fees; cf. paragraph 2.3 of the Schedule of Arbitration Costs of the Zurich Rules.

14. Cf. Schwartz, op.cit. 13-14. See also NAI Rules, Article 62(2).

15. Cf. Bühler, op.cit. 131.

16. See SCC Rules, Article 13 and the Appendix entitled "Regulations for the Determination of the Amount to be paid as Security for the Costs of the Proceedings and for the Determination of the Amount of Compensation to the Institute".

17 See CCIG Rules, Article 35(3); ICC Rules, Article 9(2); Milan Rules, Annex A, paragraph 2(d); SCC Rules, Article 13; UNCITRAL Rules, Article 41(1); Vienna Rules, Article 23(2); cf. the NAI Rules, Article 59(1), which authorizes the Administrator "to require that the claimant pay a deposit from which, to the extent possible, the fees and disbursements of the arbitrator(s) are to be paid" (emphasis added).

18. See Craig, Park and Paulsson, op.cit. 245 and 246.

19. See AAA IA Rules, Article 34(3); CCIG Rules, Article 35(3); ICC Rules, Article 9(2); Milan Rules, Annex A, paragraph 2(d); SCC Rules, Article 13; UNCITRAL Rules, Article 41(4); Vienna Rules, Article 23(4); Zurich Rules, Article 55.

20. See the discussion in Craig, Park and Paulsson, op.cit. 246-247, and Schwartz, op.cit. 19.

21. Cf. ICC Rules, Article 9(1)

22. This is the case under the WIPO Arbitration Rules, Articles 71 and 72; LCIA Rules, Articles 18(2) and 18(3); NAI Rules, Articles 60 and 61. In contrast, the ICC Rules, Article 20, and the Milan Rules, Article 40(2) and (3), seem to require the tribunal to fix and decide on the allocation between the parties of both the costs of arbitration and the parties’ legal costs.

23. Article 36(1).

24. Article 61(1).

25. Article 32.

26. Article 20(1).

27. Article 18(2).

28. Article 40(2).

29. Article 38.

30. Article 19.

31. See the analysis contained in Schwartz, op.cit. 21-23; and, generally, J. Gillis Wetter and Charl Priem, "Costs and their Allocation in International Commercial Arbitrations" (1991) 2 American Review of International Arbitration 249-349.

32. Article 32(d). See also the UNCITRAL Rules, Article 38(e).

33. Article 20(2).

34. Article 60.

35. Article 36(2).

36. Article 18(3).

37. Article 36(2).

38. Article 60.

39. Article 29.

Commentary - Werner Melis
Commentary - Stephen R. Bond
Discussion

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