The “Instant Cost Order” is the practical implementation of a means to address the much discussed issue of (the lack of) cost efficiency in international arbitration. It also tackles the question of how pro-active tribunals should be in order to control party-driven arbitral proceedings.
The majority of the costs incurred in an arbitral proceeding does usually have its base in the legal and other costs of the parties. The arbitration costs, i.e., arbitrators’ fees, administrative charges of arbitral institutions, and hearing facilities will add to the total cost of an arbitration proceeding. In order to control the development of costs, it appears that parties require the tribunal’s guidance in relation to legal and other costs, which will necessarily impact the arbitration costs.
Counsel are faced with the problem that although they might wish to keep the costs on a reasonable level they have to do the outmost for their clients to present their case. This is often translated in over-sized submissions, numerous applications for purely strategic reasons, and voluminous production of documents requests.