Investor Presentaiton
148
INVESTOR-STATE DISPUTE SETTLEMENT: A SEQUEL
Tribunals have taken at least seven different approaches to
costs: (1) costs follow the event victor takes all; loser pays all
costs of the arbitration and all attorneys' fees; (2) costs follow the
event "pro rata" loser pays all costs and prevailing party's
attorneys' fees proportional to the outcome; (3) costs follow the
event "modified" loser pays all costs but does not pay prevailing
party's attorneys' fees; (4) costs shared equally, including attorneys'
fees and irrespective of differences in their amount; (5) costs shared
equally, but attorneys' fees borne by the party retaining the
attorneys; (6) the "American Rule" each party bears its own costs
and attorneys' fees; (7) the "American Rule" exception - if there is
manifest fraud, corruption, or the like, the culpable party would bear
some or all of the costs of arbitration and/or some or all of the
opposing side's attorneys' fees. 173
.174
Empirical evidence suggests that most investment tribunals have
ordered parties to share equally in the costs of the proceedings and
to bear their own legal fees;" although in some cases the losing
party has been ordered to pay all, or some, of the costs incurred by
the winning party (see examples in box 2).
Box 1. Examples of costs in ISDS cases
In Ioannis Kardassopoulos and Ron Fuchs v. The Republic of
Georgia (ICSID Case Nos. ARB/05/18 and ARB/07/15), the
tribunal ordered the respondent to pay the claimants' costs of the
arbitration proceedings in the total sum of US$ 7.9 million, which
included legal fees, expert fees, administrative fees and the fees of
the tribunal. Obviously, the respondent State also had to bear its
own legal fees (approx. US$ 4.8 million) and other costs (approx.
US$ 1.5 million).
In Plama Consortium
V. Bulgaria (ICSID Case No.
173
Kreindler, 2010.
174
See Franck, 2011, pp. 843-844.
UNCTAD Series on International Investment Agreements IIView entire presentation