Originally from Pro-Arbitration Revisited: A Tribute to Professor George Bermann from his Students Over the Years

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The focus of this essay is the pro- and anti-arbitration aspects of costs adjustments (apportionments) in arbitral awards. The importance of costs orders in international arbitration cannot be overestimated. Rising party fees and tribunal costs play a significant role in the decision whether to actually file a claim and also in subsequent procedural conduct. The times when speed and low costs were considered as clear advantages of arbitration are not necessarily over. However, parties frequently consider the risk of expensive protracted arbitration proceedings.

In his paper dedicated to the actual meaning of pro-arbitration methods and policies, George Bermann argues that policies and practices affecting international arbitration’s wellbeing are manifold. The same policy can on one hand promote goals strived for by the arbitration community while on the other hand fail to advance arbitration’s purposes in other criteria (George A. Bermann, “What Does it Mean to Be ‘Pro-Arbitration’?”, 34 ARB. INT’L 341 (2018)). This is especially relevant given that the factors influencing what is “pro” and what is “anti” arbitration are numerous. Both academics and practitioners should thus take as broad a view as possible to avoid advocating for one view while ignoring other factors of proposed policies potentially adverse to arbitration. This also applies to considerations on costs adjustments, no matter how pro-arbitration, e.g. the loser pays principle (as defined below) may seem.
To give the analysis some practical considerations, I am going to look at data on costs adjustments in investor-State dispute settlement (ISDS) as these awards are in a large number of cases public.