NEWSLETTER-2017

166 NEWSLETTER 2017 Costs and Reduction of Costs in Arbitration* Att. Ezgi Babur von Schwander The issue of costs in arbitration is one of the factors to be consid- ered before deciding whether to resolve a dispute through arbitration or not. Indeed, arbitration is sometimes criticized as being an “expen- sive” dispute resolution mechanism. This article provides a general overview of costs and fees in arbitration, as well as the repartition of costs, in light of the survey conducted by the Chartered Institute of Arbitrators (“CIArb”) titled “CIArb Costs of International Arbitration Survey 2011” 1 (“Survey”) and, finally, addresses the issue of how to reduce costs in arbitration. In General Costs in arbitration may be analyzed under two different groups. The first group pertains to the fees related to the arbitration proceeding itself, which may not be attributed to a particular party. The second group is the costs related to the representation in arbitration, which are incurred directly by the parties during arbitration proceedings. In this article, the first group is referred to as “common costs” and the second group, as “party costs” 2 . The most important cost related to arbitration proceedings is the arbitrator’s fees. Administrative costs of the arbitration institution (as- suming that the parties opted for institutional arbitration) also belong to this group. Another group of costs and expenses are the costs related to the representation in arbitration, namely legal costs. This group is com- * Article of July 2017 1 CIArb Costs of International Arbitration Survey 2011, (“Survey”). Source: https://www.international-arbitration-attorney.com/wp-content/uploads/2017/01/ CIArb-Cost-of-International-Arbitration-Survey.pdf. 2 This classification is based on the wording used in the Survey.