Originally From Arbitration Law of Sweden: Practice and Procedure

Costs

9.1 Introduction

When arbitrators resolve a dispute, it is incumbent upon them to decide several important matters relating to costs. They have to determine the fees payable to each arbitrator and decide whether one party shall be ordered to pay the opposing party’s costs. The parties and the arbitrators, however, may have cause to ponder various problems of costs during the proceedings, and perhaps even before they have begun. In certain cases, the contracting parties should consider the need for contractual provision on matters of costs when entering into a contract with an arbitration clause.

9.2 The arbitrators’ fees and expenses

9.2.1 The amount of fees

The fees payable to the arbitrators are often considerable, and so the parties have an interest in being able to gauge the cost in advance. If a party’s claim involves a limited amount, he may only consider arbitration to be worthwhile if the opposing party consents to having the dispute resolved by a sole arbitrator. In a complicated dispute which can be expected to involve heavy fees, it may be that a claimant with poor finances cannot even afford the deposit which three arbitrators demand in order for the proceedings to begin. If so, he should not commence arbitration until he has procured the necessary finance.

If fees are determined in accordance with the vague statutory rule, it is hard for a party to tell in advance what the cost will be. Section 37 (1) requires the parties to pay reasonable compensation to the arbitrators for their work and expenses.1 It is often difficult for a party to estimate the time the arbitrators need to devote to examining the dispute, and there is a risk that the opposing party, with or without justification, will make the proceedings more expensive in a way the claimant could not have foreseen. With arbitration, as with many other more or less indispensable human performances, be they property repairs or meals in restaurants, things often turn out to be more expensive than had been bargained for.