Originally from American Review of International Arbitration - ARIA

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There have been two important developments concerning the issue of
international arbitration and security for costs. These developments occurred
almost simultaneously, although dealing with very different aspects of this broad
issue. Chronologically, the first development concerns the UNCITRAL Model
Law on International Commercial Arbitration (the “Model Law”) and arose during
the discussions of the UNCITRAL Working Group II in September 2007. This
Working Group is currently charged with the responsibility of updating the
UNCITRAL Arbitration Rules. The second development can be found in the
English Court of Appeal decision of Gater Assets Ltd. v. Nak Naftogaz Ukrainiy1
and concerns an application for security for costs in enforcement proceedings. In
the words of Lord Justice Rix:2
It is unsatisfactory that [it] should still be subject to any degree of controversy.
One possibility, however, is that [it has] been deliberately left uncertain, because
of the importance of the issue in the special context of international arbitration -
or simply because, with the problematical exception of Dardana there never
appears to have been any attempt to claim security for costs in enforcement
proceedings.
I. SECURITY FOR COSTS AND THE MODEL LAW
Nowadays a number of modern sets of arbitration rules specifically enable an
arbitral tribunal to order security for costs.3 A notable exception is the current