If international arbitration wants to sustain its growth, it should always carefully listen to the voice of its participants. The issue of costs, and in particular the issue of costs allocation, definitely deserves more attention than it has been given to so far by arbitral institutions. The true source of the costs conundrum are practices governing costs allocation rather than high costs itself. Legal counsels, just the same as it usually happens before court proceedings, should be able to explain to businessmen what portion of the money invested in pursuing their claim, and under what conditions, they can expect to get back at the end of proceedings. The discretionary costs allocation standards should be reexamined in order to achieve more predictable rules of awarding arbitration costs. If left without an in-depth reflection, in the long run, the current not uniform standards may impede trust in international arbitration as well as obscure many of its undisputed advantages. Consequently, the authors propose to examine the possibility of introduction – or the further improvement, wherever it is already used – of the costs follow the event approach to costs allocation (and perhaps, but not necessarily, directing it towards the “winner-takes-all” rule). Alternatively, participants of each international case should frankly discuss all mechanics of costs allocation at the outset of the arbitral proceedings.
ASA Bulletin