ABSTRACT: This article considers, from the standpoint of an economic approach to law, the regimens for the allocation of costs in international arbitration. The author analyses the manner in which such regimens encourage parties to negotiate or mediate on realistic bases, before or during the arbitration proceedings. The American and the English methods of cost distribution are studied from an economic perspective of law and the use of game theory, in order to observe the extent to which they succeed in effectively give rise to incentives for settlement. Finally, we set out some considerations as to the establishment, by arbitral institutions or by the parties themselves, of more efficient and balanced rules as to the distribution of costs, including provision for the impact on costs of an offer to settle.
Revista Brasileira de Arbitragem