NEWSLETTER-2017

167 ARBITRATION LAW posed of the costs incurred by the parties, mainly based on regal rep- resentation. The main element within this group is counsels’ fees and expenses. If experts are appointed by the parties, which is usually the case in international arbitration, the fees and expenses of these experts will also belong to this group. Institutional vs. Ad hoc Arbitration While institutional arbitrations are administered by one of the specialized arbitral institutions, such as the ICC, LCIA, or ISTAC (Istanbul Arbitration Centre), ad hoc arbitrations are not administered by such institutions. As there are no “administrative fees” concerning ad hoc arbitrations, it is useful to understand whether the latter is more cost-effective than institutional arbitrations. The Survey is based on 254 arbitrations, conducted between 1991 and 2010, 62% of which are institutional arbitrations 3 . However, the findings of the Survey state that “ It was not possible to make statisti- cal observations as to whether institutional arbitration is more or less expensive than ad hoc arbitration or if arbitrations administered by one institution were more expensive than those administered by another. ” 4 The fact that the parties would not have to pay administrative fees could be seen as an advantage with regard to ad hoc arbitration proceedings. However, it should be emphasized that there are many advantages with regard to institutional arbitrations, which justify the payment of these fees. Institutional arbitrations are conducted in ac- cordance with pre-established rules and procedures, which facilitate the proceedings. Additionally, arbitral institutions provide assistance with regard to the different stages of the proceedings. Accordingly, the non-payment of administrative fees should not be decisive in order to conclude that ad hoc arbitrations would be less expensive than insti- tutional ones. Another issue to emphasize here is that the arbitral institutions propose cost-effective fee scales. For instance, the fee scales offered by the Istanbul Arbitration Centre 5 are more cost-effective when com- 3 Survey, p.1. 4 Survey, p.2. 5 Istanbul Arbitration Centre Rules on Costs and Fee Scales, Appendix-3 to the Arbitration and Mediation Rules.