{"id":187894,"date":"2024-05-14T05:57:27","date_gmt":"2024-05-14T04:57:27","guid":{"rendered":"https:\/\/legalvision.co.uk\/?p=187894"},"modified":"2024-05-28T05:52:32","modified_gmt":"2024-05-28T04:52:32","slug":"costs-international-arbitration-commercial-dispute","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/disputes-litigation\/costs-international-arbitration-commercial-dispute\/","title":{"rendered":"3 Key Points About Costs in International Arbitration for a Commercial Dispute\u00a0"},"content":{"rendered":"\n

As a business owner, running a company is not always easy. Instead, there may be some hurdles in your business activity that cause commercial disputes, especially when these activities are cross-border. When a commercial dispute arises, one way to resolve it is through international commercial arbitration. Although arbitration may be an alternative to the courts, there are still costs that you should be aware of. This article will, therefore, explain three critical points about costs in international arbitration to help you decide if it is suitable for your commercial dispute.<\/p>\n\n\n\n

What is Arbitration? <\/h2>\n\n\n\n

Arbitration is an alternative dispute resolution<\/a> (ADR) method for resolving a commercial dispute that takes place outside of the courts. Despite it being different to litigation, however, it is still fairly formal and has its own rules and procedures. Arbitration takes place in front of an arbitral panel consisting of one or more expert arbitrators. During the proceedings, the arbitrator will listen to the evidence from each party, which should result in them making a binding decision. This decision is called the arbitral award. <\/p>\n\n\n\n

International arbitration follows this basic definition but involves two parties from different countries. Therefore, you may also have to consider factors such as the location (also called the seat<\/a>) and which country\u2019s laws apply when you engage in international arbitration. One example of an international arbitration seat in the UK is the London Court of International Arbitration (LCIA<\/a>).<\/p>\n\n\n\n

What Do I Need to Know About Costs in Arbitration? <\/h2>\n\n\n\n

If you are deciding whether to use international arbitration to resolve your commercial dispute, costs are an important factor to consider. Below, we look at three key points about costs that you should be aware of. <\/p>\n\n\n\n

1. How High Are Overall Costs? <\/h3>\n\n\n\n

It is usually encouraged to try to resolve commercial disputes out of court, and one of the reasons for this is that court litigation can be expensive. However, you may not realise that arbitration, despite being an ADR method, can also be costly. It is even possible for international arbitration costs sometimes to be higher than commercial court litigation. Nonetheless, the likelihood of this occurring is lower because the parties to the arbitration proceedings have some control over the proceedings. This means that you can make decisions that result in lower costs. For example, you and the other party may cut costs by having truncated or shortened proceedings.  <\/p>\n\n\n\n

2. What Do Arbitration Costs Consist of?<\/h3>\n\n\n\n

In order to properly evaluate international arbitration costs, you should be aware of where expenses may be incurred. Costs in international arbitration can include the following fees:<\/p>\n\n\n\n