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Costs in Arbitrations

Our Arbitral Practice

Our Mr White takes a pragmatic approach to assessing costs.

Our Mr White's approach has been upheld in the only reported costs case involving the new UNCITRAL legislation.

Typically, the level of detail required by a Court is not required and instead the costs assessments proceeds on a “gross sum” basis whether or an a party/party basis or a solicitor/client basis with any costs awarded being payable within 14 days of a costs award.

Typically most costs decisions are made within 2 weeks of the parties completing their submissions in relation to same.

He does not, unless directed otherwise by all parties, refer costing decisions back to the Court as that can result in delays of up to 12 months before costs are assessed and paid2)

Some further questions often arise in relation to the award of costs.

The first is whether or not costs should be taxed or settled on a

The second is whether or not the costs should be payable now (and therefore assessed now) or at the end of the litigation.

The third is whether or not any costs orders have to modified by the application of the principles set out in Calderbank v Calderbank (as modified over time).

An issue which may arise from time to time is whether or not a company in liquidation or administration is liable for costs.

Can I get interest on my award?

Yes, broadly speaking interest is available depending on the particular circumstances:

  • Pursuant to the Agreement
  • Pursuant to the Applicable Rules of the Arbitration
  • Pursuant to Statute
    • International Arbitration Act s25, s26
    • Commercial Arbitration Act 2010 (NSW) s33E, s33F

Can I get the costs of on my award?

Yes, broadly speaking costs are available depending on the particular circumstances:

  • Pursuant to the Agreement unless agreed to the contrary
  • Pursuant to the Applicable Rules of the Arbitration
  • Pursuant to Statute
    • International Arbitration Act s27


  • Altain Khuder LLC v IMC Mining Inc and IMC Mining Solutions Pty Ltd (No.2) 4) Croft J (Enforcement of a Foreign Arbitral Award) (set aside)
    • The Second Defendant pay the Plaintiff’s costs as taxed or assessed on an indemnity basis such that all costs shall be allowed except in so far as they are of an unreasonable amount or have been unreasonably incurred, and any doubts which an Associate Judge may have as to whether the costs were unreasonably incurred or unreasonable in amount shall be resolved in favour of the Plaintiff.
    • In the above decision, the judge referred to the usual rule that is applied by Australian courts, namely, that costs are ordered to be paid on a party and party basis unless there are special circumstances in a particular case that warrant the exercise of the court’s discretion to order costs on a different basis.
    • With great respect to his Honour, we can find nothing in the Act or in the nature of the proceedings that are available under the Act which of itself warrants costs being awarded against an unsuccessful award debtor on a basis different from that on which they would be awarded against unsuccessful parties to other civil proceedings.
    • Accordingly, his Honour acted on a wrong principle in embracing the approach that has been adopted by the Hong Kong Court of First Instance.
    • We note also that the Civil Procedure Act 2010 was not in force when his Honour heard this proceeding.
    • Even if it were in force, it would not have warranted the order he made.
    • In proceedings under the Act, as in other civil proceedings, costs will ordinarily be awarded against the unsuccessful party on a party and party basis unless the successful party can establish special circumstances.
    • The principles for determining the existence of special circumstances are well established.
    • Special circumstances, if they exist, are found in the facts of the case at hand, and the exercise of the judicial discretion is not otherwise conditioned on whether those facts are comprehended by a category of case or cases in which a special order has been made.
    • The fact that an award debtor fails to establish a ground for resisting enforcement of a foreign arbitral award cannot, of itself, constitute special circumstances.
    • Nor can a finding that the award debtor’s case was ‘unmeritorious’ if all that is meant by that expression is that the award debtor failed to persuade the Court to accept his or her evidence and submissions.
    • In the present case, had his Honour been correct in refusing to set aside the ex parte order for the reasons given by him, there would have been nothing special about the circumstances of the proceeding – including the conduct of IMCS and its submissions – that would have warranted the making of an indemnity costs order.


    • Unless otherwise agreed by the parties, the costs of an arbitration (including the fees and expenses of the arbitrator or arbitrators) are to be in the discretion of the arbitral tribunal.
    • Unless otherwise agreed by the parties, the arbitral tribunal may direct that the costs of an arbitration, or of any part of the arbitral proceedings, are to be limited to a specified amount.
    • A direction may be varied at any stage, but this must be done sufficiently in advance of the incurring of costs to which it relates, or the taking of any steps in the proceedings which may be affected by it, for the limit to be taken into account.
    • The arbitral tribunal may, in making an award:
      • direct to whom, by whom, and in what manner, the whole or any part of the costs that it awards are to be paid, and
      • tax or settle the amount of costs to be paid or any part of those costs, and
      • award costs to be taxed or settled as between party and party or as between legal practitioner and client.
    • Any costs of an arbitration (other than the fees or expenses of an arbitrator) that are directed to be paid by an award are, to the extent that they have not been taxed or settled by the arbitral tribunal, to be assessed in the Court having jurisdiction under section 34 to hear applications setting aside the award.
    • If no provision is made by an award with respect to the costs of the arbitration, a party may, within 14 days after receiving the award, apply to the arbitral tribunal for directions as to the payment of those costs.
    • The arbitral tribunal must, after hearing any party who wishes to be heard, amend the award by adding to it such directions as the arbitral tribunal thinks proper with respect to the payment of the costs of the arbitration.
1) , 3) [2011] NSWSC 1567
2) see for example Perth Freightlines Pty Ltd & Ors v BM2008 Pty Ltd (in liq) & Ors [2011] VSCA 218 where an alternative approach was taken and orders were made by the Arbitrator, amongst others, that such costs to be taxed in default of agreement in the Supreme Court of Victoria
4) [2011] VSC 12
5) [2011] VSCA 248

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