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Advance on Costs in ICC Arbitration
*
Att. Ezgi Babur
Advance payments play an important role in International
Chamber of Commerce (“ICC”) arbitrations. Advance payment is
intended to ensure that the ICC holds sufficient funds to cover all ensu-
ing steps in the arbitration until the next payment is due
1
. With the
advance payments, the ICC administrative expenses, arbitrator’s fees
and expenses are ensured, and delays or interruptions of the arbitration
proceedings for financial reasons are prevented.
In General
The provisions on advance payment are set forth under Article 36
of the ICC Arbitration Rules (“the Rules”), and also under Article 1 of
Appendix III to the Rules.
The advance on costs is fixed pursuant to cost scales which are
used in determining ICC administrative expenses and arbitrators’ fees
2
.
The scales are based on the amount in dispute; however, the percent-
age of the costs decreases as the amount in dispute rises. Therefore, for
amounts that are quite high, the parties do not have to bear unreason-
able costs.
Allocation of the Advance on Costs between the Parties
Article 36(2) of the Rules provides that a single advance on costs
would be fixed based on the sum of the parties’ claims. The same arti-
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NEWSLETTER 2014
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Article of June 2014
1
Jason Fry, Simon Greenberg, Francesca Mazza
,
The Secretariat’s Guide to ICC Arbitration
,
ICC Publication 729 (Paris, 2012), p. 362 (“Secretariat’s Guide”).
2
These scales can be found in Article 4 of the Appendix III of the Rules.