There can be little doubt that international commercial arbitration is expensive. A survey by PricewaterhouseCoopers in 2006 found that whilst 52% of respondents had spent U.S. $100,000 – U.S. $500,000 in their most recent international arbitration, 12% had spent in excess of U.S. $5 million. Similarly, 65% of respondents viewed international arbitration as more expensive than transnational litigation, 23% as about the same, and only 12% as cheaper.
These findings are not surprising. Unlike judges (who are salaried by the state), arbitrators require their fees and expenses to be paid, and these can be substantial. For example, if it is an ICC arbitration where fees are assessed on an ad valorem basis—a U.S. $50 million dispute would carry fees for the arbitrators in the range of U.S. $63,767 – U.S. $281,200 per arbitrator. The actual fee is fixed by the ICC Court taking into consideration the diligence of and time spent by the tribunal, the rapidity of the decision making and complexity of the subject matter. Moreover, there are the fees of the institution itself. Again, a U.S. $50 million dispute under the ICC commands a fee of U.S. $95,515. As an alternative to a fixed fee for the institution, there may be the fees and expenses of a secretary or registrar.
In an LCIA arbitration, the time of the tribunal is charged at no more than £450 per hour and the registrar is charged at £225 per hour.
A tribunal secretary can be separately remunerated or remunerated out of the remuneration of the members of the tribunal’s remuneration. Finally, the nature of the constitution of the tribunal is such that any tribunal will not have facilities to hold hearings. Rooms have to be hired for meetings and hearings, as well as stenographers, creating a layer of cost not found in litigation where the courts are generally provided free by the state albeit that court fees have to be paid.