ASAB 29-3 Thomas Rohner Michael Lazopoulos - Pestalozzi ...

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ARTICLES C. Case Law Numerous arbitral tribunals under various arbitration rules have confirmed that a respondent’s unjustified failure to pay its respective share of the advance on costs constitutes a contractual breach which allows the claimant to request the grant of a partial award for reimbursement of the substituted advance on costs: In ICC Case 13139 63 , the arbitral tribunal considered that by entering into an arbitration agreement referring to the ICC Rules, each party undertakes the contractual obligation, save special circumstances, to pay its share of the advance on costs in the case that it should become a respondent in an arbitration pursuant to the arbitration agreement. It held that the respondent had no valid reason to refuse to pay its share of the advance on costs and due to its non-payment it had breached its contractual obligations towards the claimant. Hence, it granted the relief requested by the claimant and ordered the respondent to reimburse the claimant for the advance paid to the ICC in place of the respondent. “38. The Arbitral Tribunal agrees that by entering into the separable Arbitration Agreement […] contained in the Distribution Agreement and referring to the ICC Rules, [the Respondent] undertook, save special circumstances, to pay its share of the advance should it become a respondent in an arbitration pursuant to the Arbitration Agreement […]. 41. In the view of the Arbitral Tribunal, the agreement to arbitrate is a separable contract which differs in its nature from the contract on the merits inasmuch as it is a contract of a procedural nature, but it is a contract nevertheless, giving rise to a procedural obligation to provide the advance on costs. 42. The Arbitral Tribunal is of the view that [the Respondent] accordingly had an obligation to provide the advance on costs, unless he is excused from this. 49. Thus, in the Arbitral Tribunal’s view [the Respondent] is not excused from its obligation to make the advance on costs, and breached its contractual obligation in this arbitration by not doing so. 61. […] [the Respondent] shall pay [the Claimant] USD 210,000 within 28 days of the date of receipt of this Award, in 63 Partial award dated 2005 in ICC Case 13139 (unreported), supra note 34, at 1418 et seq. 564 <strong>29</strong> ASA BULLETIN 3/2011 (SEPTEMBER)
T. ROHNER & M. LAZOPOULOS, RESPONDENT’S REFUSAL TO PAY ITS SHARE OF THE ADVANCE ON COSTS reimbursement for [the Claimant] having paid this sum to the ICC in place of [the Respondent].” 64 (emphasis added). In ICC Case 7289 65 , the arbitral tribunal concluded that the ICC Rules impose a contractual obligation on the parties to bear half of the advance on costs and affirmed its jurisdiction to rule on financial matters such as the nonpayment of the advance on costs: “[…] En acceptant sa mission, l’arbitre s’engage à respecter et à faire respecter les pouvoirs de la Cour, et il n’a pas à s’immiscer dans les mesures d’ordre administratif ou financier que celle-ci a prises ou prendrait encore. […] Si la Cour, dénuée de pouvoir juridictionnel, se refuse à trancher ce litige, l’arbitre, en revanche, ne devrait pas se déclarer incompétent, lui que les parties ont choisi comme juge pour trancher tous les différends qui les opposent sur le fond ou en matière de procédure arbitrale. […] Il ne fait pas disparaître l’obligation de fond qui pèse contractuellement sur chaque partie d’avoir, dans l’arbitrage CCI, à participer également au paiement de la provision pour frais, obligation que chaque partie contracte réciproquement à l’égard de l’autre. […]” 66 (emphasis added). The same view was taken in ICC Case 17050 67 : “[…] By choosing to submit all their disputes to arbitration under the ICC Rules, the parties to the arbitration have thus agreed to pay half of the advances on costs.” In ICC Case 10526 68 , the arbitral tribunal affirmed its jurisdiction to rule on financial matters. It further stated that the reference in the parties’ 64 65 66 67 68 Partial award dated 2005 in ICC Case 13139 (unreported), supra note 34, at 1420 et seq. Partial award dated 2 September 1996 in ICC Case 7289 (unreported), supra note 26, at 1004 et seq. Free translation into English: “[…] In acceptance of his appointment, the arbitrator engages himself to respect and enforce the competences of the Court and he has no right to interfere with the administrative or financial measures which had been taken or will be taken by the Court. […] If the Court, lacking judicial power, refuses to settle this dispute, the arbitrator on the other hand has no right to decline his jurisdiction, since the parties have chosen him as a judge to rule on all disputes relating to the merits of the case or to the procedure of the arbitration. […] [by making the substitute payment] the material obligation contractually imposed on the parties to pay each half of the advance on costs in ICC arbitration does not disappear, an obligation to which each party agreed reciprocally towards the other […].” (emphasis added). Interim award dated 12 November 2010 in ICC Case 17050, para. 27 (unreported), supra note 37. Partial award dated 2000 in ICC Case 10526 (unreported), publ. in: Journal du Droit International (2001), at 1182. <strong>29</strong> ASA BULLETIN 3/2011 (SEPTEMBER) 565
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