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

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ARTICLES In ICC Case 13139, the arbitral tribunal considered that even if the parties’ obligation to pay the advance on costs could only be considered as a procedural contractual obligation, it nevertheless has the power to issue a partial award for immediate reimbursement in favor of the party substituting the advance on costs on behalf of the defaulting party: “53. As a matter of legal doctrine, the Arbitral Tribunal finds the conclusion inescapable that if a contractual obligation, even if it is a procedural contractual obligation, has been breached, it has jurisdiction to issue immediately a Partial Award in favor of the party that substituted itself for the defaulting party. […]” 74 (emphasis added). The cases cited above illustrate the arbitral tribunal’s power to render a partial award on the immediate reimbursement in favor of the claimant that has paid the entire advance on costs, even if the applicable arbitration rules (e.g. the ICC Rules, UNCITRAL Rules, Swiss Rules, etc.) do not contain corresponding specific provisions. The arbitral tribunal’s power to render a partial award in favor of the claimant who paid the advance on costs on behalf of the respondent was also confirmed by the Supreme Court of the Canton of Zurich 75 : “Ob der Einzelschiedsrichter den Rückgriff für die Hälfte des Vorschusses in freier Ergänzung der Verfahrensordnung des Schiedsgerichtshofes oder in deren Ergänzung durch die ZPO eingeräumt hat, ist ohne Belang, weil ein Verfahrensgrundsatz, der dies verbieten würde, weder der Verfahrensordnung noch der ZPO zu entnehmen noch von der Beklagten nachgewiesen worden ist.” 76 However, there are cases where some arbitral tribunals took a different view and considered that they do not have the power to issue a partial award for immediate reimbursement of the substituted advance on costs. For example, in ICC Case 12491 77 , the arbitral tribunal dismissed the claimant’s claim for reimbursement with the argument that only the ICC Court is competent in financial matters, and not the arbitral tribunal: 74 75 76 77 Partial award dated 2005 in ICC Case 13139 (unreported), supra note 34, at 1421. Decision of the Supreme Court of the Canton of Zurich dated 29 April 1985, partially publ. in: ASA Bull. (1986), at 129. Free translation into English: “Whether the Sole Arbitrator granted the regress for half of the advance on costs based on a free amendment of the procedural rules of the Court of Arbitration or based in their extension by the Code of Civil Procedure is irrelevant because a procedural principle which would forbid [such recourse] can neither be derived from the procedural rules, nor from the Code of Civil Procedure, nor has it been demonstrated by the respondent.” Partial award no. 2 dated 1 June 2004 in ICC Case 12491, publ. in: ASA Bull. (2006), at 281; discussed by MICHA BÜHLER, supra note 5, at 294 et seq. 568 29 ASA BULLETIN 3/2011 (SEPTEMBER)
T. ROHNER & M. LAZOPOULOS, RESPONDENT’S REFUSAL TO PAY ITS SHARE OF THE ADVANCE ON COSTS “[…] Que l’acceptation contractuelle du règlement CCI ne peut pas donner à la demanderesse un droit (au remboursement de la moitié de la provision intégralement versée) que le règlement CCI ne lui donne pas; […]” 78 A similar approach was taken in ICC Case 12895 79 . In this case, however, the arbitral tribunal dismissed the claimant’s request because the claimant did not make any substituted payment on behalf of the defaulting respondents, but rather asked the arbitral tribunal to order the defaulting respondents to pay their shares of the advance on costs. The arbitral tribunal left the question unanswered as to whether it would have granted a request for reimbursement had the claimant substituted the advance on costs of the defaulting respondents: “[…] Under the ICC Rules, it is the Court or the Secretary General, and not the Arbitral Tribunal, who has authority to deal with circumstances where a party fails to pay its share of the advance on costs. The underlying rationale for the Court or Secretary General being the competent authority is that the arbitrators have a personal interest in being paid their fees. If an arbitral tribunal were to order a party to pay its share of the advance on costs, its decision might be viewed as self-serving and lacking in independent and unbiased judgment. Such is not the case when one party has already paid the full advance on costs and requests the tribunal to order the nonpaying party to reimburse it […].” III. Summary Arbitration is a consensual mechanism of dispute resolution which implies the parties’ obligation to pay the advance on costs as requested by the arbitral tribunal, or – as the case may be – by the arbitral institution. The respondent who fails to pay its respective share of the advance on costs is in breach of its contractual obligation towards the claimant under the arbitration agreement. Disputes regarding the non-payment of the advance on costs fall within the scope of the arbitration agreement. Consequently, the arbitral tribunal has the power, upon request of the claimant, to render a decision on the 78 79 Free translation into English: “The mere contractual acceptance of the ICC Rules does not give the claimant a right (to the reimbursement of half of the advance paid in total) that the ICC Rules do not provide for him […].” Procedural order no. 10 dated 2005 (unreported) in ICC Case 12895, cited in: MICHAEL BÜHLER/THOMAS WEBSTER, supra note 27, at 437. 29 ASA BULLETIN 3/2011 (SEPTEMBER) 569
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ASAB 29-3 Thomas Rohner Michael Lazopoulos - Pestalozzi ...

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