Excessive Costs and Recoverability of Costs Awards in Investment Arbitration

In the era of the backlash against investor-State dispute settlement, the costs of proceedings have been a prime object of criticism. This article examines the problem of excessive costs and insufficient recoverability of costs awards. Firstly, it examines the issue of excessive costs in relation to both party costs (fees and expenses of counsel, experts, and witnesses) and tribunal costs (fees and expenses of arbitrators and arbitral institutions). Secondly, it discusses the impact of the length of proceedings on costs. Thirdly, it discusses the contribution of third-party funding to excessive costs. Finally, it analyses the issue of insufficient recoverability of costs awards and the availability of mechanisms to secure prompt payment of costs awards where there are insufficient resources or an unwillingness to pay. In examining each of these concerns, this article assesses the potential contribution of four different models for reform of investment arbitration.