Investor Presentaiton
147
This provision prompts the disputing parties to consult on the
fees to be paid to arbitrators in advance of the establishment of the
tribunal. If the disputing parties reach an agreement, arbitrators must
accept the offered fees or decline appointment. Even if the parties
fail to take advantage of this opportunity, the IIA caps arbitrator fees
at the level set in the ISCID schedule.
2. Cost allocation: arbitral rules and practice
There is no uniform rule with respect to the final allocation of
costs by the tribunal. Some arbitral rules contain presumptions about
the allocation of costs. For example, Article 42(1) of the
UNCITRAL Rules (2010) provides that:
"The costs of the arbitration shall in principle be borne by the
unsuccessful party or parties. However, the arbitral tribunal
may apportion each of such costs between the parties if it
determines that apportionment is reasonable, taking into
account the circumstances of the case."
The costs-follow-the-event presumption in the UNCITRAL
Rules applies both to the prevailing party's arbitration costs and
attorney's fees. In contrast, the 1976 UNCITRAL Rules
distinguished between costs and fees, and did not establish the
presumption that attorneys' fees should be shifted to the losing
party. The ICSID Arbitration Rules contain no presumption about
the allocation of costs.
However, a presumption is only a presumption. Its existence
notwithstanding, arbitral tribunals retain a great deal of discretion to
decide the appropriate allocation of costs and have, on occasion,
exercised this discretion to distribute the costs in accordance with
the relative success of the parties' arguments (see examples in box 1
below).
UNCTAD Series on International Investment Agreements IIView entire presentation