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28 J. Int'l Arb. 115 (2011)
Arbitration Costs as Relief and/or Damages

handle is hein.kluwer/jia0028 and id is 119 raw text is: Journal of International Arbitration 28(2): 115-126, 2011. O 2011 Klinver Lau iternjouatin. Printed in The NHIrlands. Arbitration Costs as Relief and/or Damages Jose ROSELL* During the arbitration proceedings, tivo categ.ories of costs may be incurred by the parties. The arbitration costs, which are strictly related to the arbitration procedings, and the costs which are incurred in relation to parallel proceedings brought before the state courts by the parties. This article discusses the extent to whmich the costs of arbitration and of such parillel proceeliqns can be claimed, whether as an iremmi of relief or is dwiqges. The conidtct of the parties during the proceedings imiay have an imnpact on the allocotiont of all such costs in both commnercial and investor-state arbitrotions. When dealing with apportionment of costs related to arbitration, two important considerations arise: (i) the discretionary powers vested in the arbitral tribunals; and (ii) the lack of specificity in the arbitration rules and laws. Both issues bear on the same topic, that is, the parties' expectations of recoverability of certain arbitration costs. Even before the commencement of the arbitration, the parties legitimately expect to be informed as to the costs of proceeding in the dispute resolution process. These costs include not only the amount that a party will have to pay at the end of the arbitration but also, for example, the litigation costs which would be generated if procedural issues had to be resolved prior to the arbitration or if parallel arbitration and/or litigation were engaged during the arbitration proceedings. Once these costs are identified, the parties and their counsel will have to determine on which legal basis all these costs should be claimed. An arbitral tribunal in international arbitration has the power to make an award on costs that can require a party to pay all or part of the other party's legal and other costs. The discretion of the tribunal is restrained by the arbitration clause and the applicable arbitration law and rules. Every institution has its own rules as to how costs are to be allocated. Under the International Centre for Dispute Resolution (ICDR) Rules, the London Court of International Arbitration (LCIA) Arbitration Rules, the Rules of the Arbitration Institute of the Stockholm Chamber of Commerce (SCC) and the UNCITRAL Arbitration Rules, there is the principle that the losing party will have to compensate the successful party for its expenses. On the other hand, the Inter- national Chamber of Commerce (ICC) Rules of Arbitration and the ICSID Arbitration Rules are silent as to how costs are to be apportioned. Notwithstanding the governing institutional rules, the parties are also free to reach an agreement on recoverable costs. Indeed, it is not common practice in international arbitration to discuss cost issues at the outset of the proceedings. While the institutional rules can provide general directions on the apportionment of costs, they usually do not provide much guidance as to how costs should be assessed or * Partner and Co-chair of the firm's arbitration practice, Hughes Hubbard & Reed L.L.P., Paris.Written version of a presentation given at the Swedish Arbitration Days, Stockholm, September 16-17,2010.

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