How are the costs of arbitration proceedings estimated and allocated?

International Arbitration (4th edition)

Argentina Small Flag Argentina

Provided that the parties have not agreed otherwise, the arbitral tribunal shall decide on arbitration costs (Art. 772 CP). Under Argentine law, the “losing party pays” principle applies with respect to the allocation of costs. The arbitral tribunal could, however, depart from this rule and decide on a different cost allocation if the circumstances justify. Departure from this general principle must be justified in the award (Art. 68 CP). In general, costs are proportionally divided where parties have prevailed on some claims and lost on others.

Austria Small Flag Austria

Unless the parties have agreed otherwise, they are entitled to recover legal costs (encompassing the reasonable costs of legal representation, the fees of the arbitrators and — where applicable — the administrative costs charged by the institution). Both Austrian law and the Vienna Rules foresee that the arbitral tribunal must render a decision on costs upon termination of the proceedings. The general practice with regard to allocating costs between the parties is to take into account all circumstances of the case, with a particular focus on the outcome of the proceedings.

Bulgaria Small Flag Bulgaria

The allocation of the costs is based on the principle that the costs (arbitration fees and expenses, expenses for gathering evidence and reasonable attorneys’ fees made) are to be borne by the unsuccessful party. The costs for institutional arbitration are governed by Tariffs of the respective institution to be paid in advance.

United States Small Flag United States

The FAA is silent on costs, and courts diverge on the question of how the costs of arbitration proceedings should be estimated and allocated. However, costs are generally handled as a matter of contractual agreement between the parties or according to the institutional rules that govern a proceeding.

Canada Small Flag Canada

Subject to the arbitration agreement, the arbitral tribunal generally has broad discretion with respect to the apportionment of costs. The general practice is that the successful party is entitled to its reasonable proven costs on a full indemnity basis.

Cyprus Small Flag Cyprus

Article 23 of Cap. 4, provides that any provision in the arbitration agreement, to the effect that the parties, will bear their own costs of the reference or award or any part thereof, shall be void. Any such provision shall not be void when it forms part of an agreement to submit to arbitration, in a dispute arising out of the signing of such agreement.

The estimation of such costs is at the discretion of the Court.

UAE Small Flag UAE

Estimation of Costs
Assessment of the cost of arbitration proceedings is dependent on the rules of the arbitral institution which governs the proceedings.

The DIAC and ADCAAC provide a costs schedule based on the value of the claim.
To this schedule, additional fees / costs may be added, for example, those fees levied by the arbitral institution or fees for tribunal appointed experts.

The DIFC-LCIA Arbitration Centre, in contrast to the above, determines the cost of the arbitration based on the hourly rate of the appointed arbitrators, the institution’s staff and the general expenses of both.

Allocation of Costs
The parties must agree to empower the Arbitral Tribunal to award legal costs. This agreement is also normally recorded within either the Terms of Reference or within the rules of the applicable arbitral institutions.

In practice whether that power will be exercised by a given Arbitral Tribunal remains at its discretion and there is no definitive rule necessarily applied of “costs following the event”.
Often tribunals are influenced by the procedural law governing litigation in their home jurisdiction and may be reluctant to award substantial legal costs, even if empowered to do so and even if a party has been entirely successful.

The currently applicable DIAC Rules do not contain any provision for an Arbitral Tribunal to award legal costs.

The DIFC-LCIA Arbitration Rules (Article 28) empowers arbitrators to award legal costs.
The ADGM Regulations (Regulation 50(5)) provide that the costs of an arbitration should be set out within the arbitral award.

Should the Arbitral Tribunal fail to do so, a party has 30 days from receiving the arbitral award to apply to the Arbitral Tribunal for a ‘further order on costs’.

The term “costs” under the ADGM Regulations (Regulation 50(5)(f)) includes:

‘the costs for legal representation and assistance of the successful party if such costs were claimed during the arbitration, and only to the extent that the arbitral tribunal determines that the amount of such costs, or a part of them, is reasonable.

Legal costs may, therefore, be claimed by the successful party to an arbitration, subject to the Arbitral Tribunal’s assessment as to whether such costs are reasonable.

United Kingdom Small Flag United Kingdom

The 1996 Act allows the parties to agree what costs in the arbitration are recoverable (s.63(1)). If there is no agreement, the tribunal may determine the recoverable costs of the arbitration on such basis as it deems appropriate (s.63(3)).

Singapore Small Flag Singapore

SIAC provides an online schedule of fees (at, which includes updated fee information depending on the circumstances of the case for the following fees:

  • case filing fee;
  • administration fees;
  • arbitrator’s fees; and
  • if applicable, emergency interim relief fees, challenge fees, Arb-Med-Arb fees,
    appointment fees, and assessment or taxation fees.

SIAC also provides a fee estimator (online at siaccalculator/?Itemid=448).

The ICC offers a similar explanation of costs and payments in ICC arbitration (online at and a cost calculator (online at

In ICC arbitration, the ICC International Court of Arbitration [the Court] sets an advance ‘payable in equal shares by the claimant and the respondent’ to cover the costs of the arbitration pursuant to Rule 37(2) of the ICC Rules of Arbitration. In SIAC arbitration, the Registrar sets the amount of deposits payable (generally 50% for each of the claimant and respondent sides in the arbitration), and parties are required to make deposit payments toward that amount during the course of the proceedings. In both ICC and SIAC arbitrations, the tribunal may make an award of costs (e.g., often in a favorable amount to the successful party in the final award, depending on a variety of factors).

South Korea Small Flag South Korea

Arbitral tribunals have the power to allocate costs of arbitration incurred in connection with the arbitral proceedings absent agreement between the parties (Article 34-2 of the Arbitration Act). The Arbitration Act does not stipulate how costs should be allocated. In practice, costs usually follow the event.

For proceedings conducted under the KCAB International Arbitration Rules (the “Rules”), arbitration costs are in principle borne by the losing party, unless the arbitral tribunal determines otherwise (Article 52(1) of the Rules). Legal costs and other necessary expenses incurred in connection with arbitral proceedings are allocated by the arbitral tribunal as it deems appropriate, unless otherwise agreed by the parties (Article 53 of the Rules).

Germany Small Flag Germany

Pursuant to section 1057 (1) ZPO, the arbitral tribunal decides how to estimate and allocate the cost of the proceedings. While the parties may provide a separate agreement, a decision by the Arbitral Tribunal is the general rule.

In its decision, the arbitral tribunal takes into account all facts and circumstances of the case as well as the Arbitration's outcome, section 1057 (2) ZPO. Similar to proceedings in German state court, the arbitral tribunal's decision follows the concept of "cost-follow-the-event". Nonetheless, the arbitral tribunal may deviate from such concept where it deems necessary.

The decision of the arbitral tribunal covers the costs of the arbitration, which include in particular institutional fees (of the arbitration institution as well as the arbitrator) and the reasonable lawyers' fees. In terms of "reasonableness" the award of costs is not limited to a statutory fee schedule as in district court proceedings. Instead, the arbitral tribunal may decide in its discretion to what extend costs and fees were necessary, and thus reasonable, for a party's proper conduct of the proceedings.

The arbitral tribunal's decision on costs may be included in the final award or can be issued as a separate award on cost following the conclusion of the arbitration proceedings, section 1057 (2) ZPO.

India Small Flag India

As per Section 31A of the Arbitration & Conciliation Act, 1996, the Court or the Arbitral Tribunal shall have the discretion to determine:

  1. Whether costs payable by one party to another;
  2. The amount of such costs; and
  3. When such costs are to be paid.

‘Costs’ are defined as

  1. The fees and expenses of the arbitrators, Courts and witnesses
  2. Legal fees and expenses;
  3. Any administration fees of the institution supervising the arbitration; and
  4. Any other expenses incurred in connection with the arbitral or Court proceedings and the arbitral award.

For the determination of the costs, the tribunal has to take into consideration four factors:

  1. the conduct of all the parties,
  2. whether a party has succeeded in the case,
  3. whether the party had made a frivolous counter-claim leading to delay in the disposal of the arbitral proceedings; and
  4. whether any reasonable offer to settle the dispute is made by a party and refused by the other party.

Indonesia Small Flag Indonesia

The tribunal has the authority to determine the arbitration costs. Different arbitration institutions may apply different cost calculations. For example, BANI will determine the arbitration fee based on the amount in dispute. Under the Arbitration Law, the losing party should bear the arbitration costs or, if the claim is partially granted, then the costs are shared proportionally among the parties. The arbitration costs include the arbitrators’ fee, travel and other expenses that they incur; expenses incurred by factual and expert witnesses; and other expenses arising from examination and administration.

Liechtenstein Small Flag Liechtenstein

As soon as the arbitral proceedings are concluded, the arbitral tribunal has to decide on the compensation for costs, unless the parties have agreed otherwise. The arbitral tribunal has to take all circumstances of the case into consideration including the outcome of the arbitral proceedings. The decision on the compensation for costs needs to be made in the form of an arbitral award.

The Liechtenstein Rules contain more detailed provisions in that respect. Under the Liechtenstein Rules, the costs of the arbitration shall in principle be borne by the unsuccessful party to the extent it was unsuccessful (see Article 27 of the Liechtenstein Rules).

Malaysia Small Flag Malaysia

The estimated costs of an arbitration proceedings would normally depend on, amongst others, the arbitral institution chosen by parties.

In respect to the allocation of costs, although the general principle is that ‘costs follows the event’, Section 44 of the Arbitration Act provides that unless otherwise agreed by parties, the costs and expenses of an arbitration shall be in the discretion of the arbitral tribunal. In this respect, the arbitral tribunal can apportion costs in any manner it determines reasonable taking into consideration the circumstances of each case (see Court of Appeal decision in SDA Archtiects (sued as a firm) v Metro Millenium Sdn Bhd [2014] 2 MLJ 627)

France Small Flag France

There are no specific provisions related to arbitration costs under French law. Usually, in ad hoc arbitration, fees are determined in agreement between the parties and the arbitral tribunal. Institutional arbitration rules usually include specific provisions on costs.

In general, parties can freely choose a legal fee structure such as flat fees or an hourly rate. Lawyers admitted to practice in France cannot be paid on a purely contingency fee basis. Success fees are only allowed in addition to a non-contingent fee arrangement. However, success fees are permitted in international arbitration if allowed by lawyers’ home bar rules (Société International Contractors Group v. Me X., Paris Court of Appeal, 10 July 1992, Rev. Arb. (1992), 609-614).

There is also no method under French law to calculate costs and fees, such as the fees and expenses of the arbitrators and the parties’ legal and other related costs (travel cost, hearing costs, administrative fees and expenses, experts’ fees). Both parties are liable to the arbitral tribunal for the payment of their fees (Getma v. Republic of Guinea, Paris Court of Appeal, 30 June 2015).

The allocation of costs between or among the parties is not determined by specific rules. Therefore, arbitrators have wide discretion to divide the costs unless the parties have agreed otherwise.

Egypt Small Flag Egypt

The EAL does not include any provision relating to the allocation of costs which accords the tribunal a broad discretion in assessing the reasonableness of the fees and allocating the fees and costs between the parties, unless otherwise agreed between the parties. In practice, it is not uncommon for arbitral tribunals seated in Egypt to follow international practice as to costs’ allocation by adopting the ‘costs follow the event’ rule insofar as winning party is able to justify and substantiate its fees and costs.

Mexico Small Flag Mexico

According to article 1455 of the Commerce Code, the costs of the arbitration shall be borne by the defeated party. However, the arbitral tribunal may divide the elements of these costs between the parties if it decides that the apportionment is reasonable, taking into account the circumstances of the case.

Regarding the cost of representation and legal assistance, the arbitral tribunal will decide, taking into account the circumstances of the case, which party must pay such cost or may apportion it among the parties if it decides that is reasonable.

Nigeria Small Flag Nigeria

Section 49 of the ACA empowers the arbitral tribunal to fix costs in its award. These costs include the (a) fees of the arbitrators, (b) travel and other expenses incurred by the arbitrators, (c) cost of expert advice and other assistance required by the arbitral tribunal, (d) travel and other expenses of witnesses to the extent that such expenses are approved by the arbitral tribunal and (e) reasonable costs for legal representation and assistance.

Except the parties otherwise agree, the costs of arbitration are in principle borne by the unsuccessful party as the unsuccessful party will be required to indemnify the successful party. The tribunal may, however, apportion such costs between the parties if it determines that apportionment is reasonable, taking into account the circumstances of the case. No additional fees may be charged by an arbitral tribunal for the interpretation, correction or completion of the award.

Norway Small Flag Norway

Save for any agreement with the parties to the contrary, the arbitral tribunal determines its own remuneration. The parties are jointly liable for the tribunal’s costs. The arbitral tribunal may order a party to pay the other party's costs to the extent it deems appropriate.

The arbitral tribunal can order security for its own costs, but not for the parties' costs.

Philippines Small Flag Philippines

Costs and allocation of costs can be subject to the agreement of the parties. In default of such an agreement, costs, such as arbitrator’s fees, expenses of the arbitrators and witnesses, costs of expert advice, and legal representation and assistance, are generally fixed by the arbitral tribunal or the institution under the auspices of which tribunal was constituted. Fees of the arbitral tribunal are required to be reasonable in amount, taking into account the amount in dispute, complexity of the subject matter, and time spent by the arbitrators. Costs are borne by the unsuccessful party, unless the arbitral tribunal makes a reasonable apportionment between the parties, taking into account the circumstances of the case. (Art. 4.46 and 5.46, IRR).

Saudi Arabia Small Flag Saudi Arabia

Unless the parties to the arbitration agree otherwise, each party bears its own arbitration costs. However, the arbitral tribunal has the authority to allocate the costs to the losing party.

Czech Republic Small Flag Czech Republic

There are no special rules on the costs of arbitration and, therefore, the complementary provisions of the Civil Procedure Code will apply. The permanent arbitration tribunals adopt their own rules on the costs of arbitration.

Regarding allocation, the parties bear their own costs during arbitration, whereas the obligation to pay the counterparty’s costs of proceedings is usually imposed upon the losing party of the arbitration (the “loser pays” principle).

Chile Small Flag Chile

The ICA Act is silent on the matter. Hence it is governed by parties’ agreement or the applicable arbitration rules. Pursuant to Article 44 of the CAM Santiago arbitration rules, the arbitral tribunal shall decide on costs, at last, in the award, and such costs will be all the expenses actually incurred and proved.

Awards do not usually present a breakdown on costs. It can be generally stated that costs do not include actual attorney’s fees.

Switzerland Small Flag Switzerland

Swiss law does not stipulate how the costs of arbitration proceedings are estimated and allocated. In general, one can expect the arbitral tribunal to follow the costs follows the event-rules, because said rule is also followed by the state courts in Switzerland.

In Swiss Rules institutional arbitration, according to art. 38 Swiss Rules the arbitral tribunal shall determine the costs of the arbitration proceeding, as well as its apportionment in its award. In principle, also in Swiss Rules arbitration the costs are borne by the unsuccessful party. However, the arbitral tribunal may apportion the costs taking into account the circumstances of the case.

Greece Small Flag Greece

In domestic arbitral proceedings the final allocation of costs is made in the final award pursuant to article 882 para. 3 GrCCP. In international commercial arbitral proceedings having their seat in Greece the allocation of costs may also be made with a separate award following the issuance of the final award pursuant to article 32 para. 4 L. 2735/1999.In domestic arbitration the fees and expenses of the arbitral tribunal are regulated in articles 882 and 822A GrCCP. They are calculated as a percentage of the amount in controversy given the subject matter of the dispute based on a specific scale. In the event that such a valuation is objectively not feasible the fees shall be determined by the Arbitral Tribunal ex aequo et bono. The allocation of costs is governed by the provisions of articles 176 et seq. GrCCP which are applicable also to Court proceedings (application by analogy). The principal rule is that “costs follow the event”, meaning that the unsuccessful party is ordered to pay the costs of the successful party (articles 176, 178 GrCCP). That being said, it is not rare for arbitral tribunals to set off the costs between the parties on the premise that the dispute at hand involved the resolution of especially complex legal questions (article 179 GrCCP).In international commercial arbitral proceedings having their seat in Greece the allocation of costs is governed by the agreement of the parties. Absent such an agreement the allocation is made by the arbitral tribunal which, pursuant to article 32 para. 4 L. 2735/1999 shall consider the circumstances of the case, and, most importantly its outcome. Hence the rule that “costs follow the event” in the said sense is also dominant in this context. In any event, said provision allows the arbitral tribunal significant room and latitude to decide on the costs. Obviously, it prevails as lex specialis over the provisions of articles 176 et seq. GrCCP which are applied by analogy to domestic arbitration. Both in domestic as well as in international commercial arbitral proceedings arbitration costs include obviously legal fees and expenses. The arbitral tribunal’s allocation of cost is subject to scrutiny by State Courts upon a challenge brought against the award by any interested party.

Turkey Small Flag Turkey

Unless otherwise decided by the parties, the costs of proceedings shall be borne by the losing party. In the event that parties relief sought are partially accepted the tribunal shall distribute the costs in proportionate with the rate of success of each party.

Parties can always freely determine the fees to be paid to the arbitrators or refer to internationally accepted rules or institutional arbitration rules for such determination. If there is no prior agreement, the fees are determined based on the yearly published fee tariff issued by the Ministry of Justice.

Updated: January 20, 2020