ICDR Arbitration Costs

The International Centre for Dispute Resolution (“ICDR”) is the international division of the American Arbitration Association (“AAA”). Those engaging in ICDR arbitration should understand the expected costs, payment timeline, and cost recovery options to ensure proper budgeting and avoid unforeseen financial risks.

In an ICDR arbitration, parties can expect the following categories of costs: (1) ICDR fees; (2) legal fees; (3) expert fees (if necessary); (4) hearing costs; and (5) other costs. A table of ICDR arbitration costs can be downloaded here.

Importantly, these amounts may be recoverable from the losing party.

This note will now examine in depth the costs associated with an ICDR arbitration under the 2021 International Arbitration Rules of the ICDR (the “ICDR Rules”) and the International Arbitration Fee Schedule (the “Fee Schedule”).

Heads of Costs in ICDR Arbitration

1. ICDR Fees

According to the ICDR’s Report on Time and Cost, the median institutional costs for all ICDR arbitrations awarded between 2015 and 2017 were USD 20,000. This figure includes the administrative and tribunal fees of the ICDR, but importantly does NOT cover legal, expert, hearing, or other costs.

The fees charged by the ICDR are broken down in further detail below:

A. Initial Filing Fee

Before the ICDR commences administration of arbitration proceedings, a claimant must pay an initial filing fee. The amount of the initial filing fee charged by the ICDR is determined according to the amount of any filed claim or counterclaim, as listed in the following table (however, cases with three or more arbitrators are subject to a minimum initial filing fee of USD 4,825):

The initial filing fee can be calculated using the ICDR’s Online Fee Calculator.

The initial filing fee is payable in full by the party filing a claim, counterclaim, or additional claim at the time of filing.

USD 4,825 is the minimum filing fee for any case requesting nonmonetary relief. When a party makes claims for both monetary and nonmonetary relief, it must pay the higher of the two filing fees.

If the arbitration application is found to be deficient, for example, because the parties have not agreed to ICDR arbitration or because the claimant’s demand for arbitration is incomplete, the ICDR will keep USD 750 of any initial filing fee paid if the defect is not remedied.

Where a case is settled or withdrawn, the filing party may recover portions of the initial filing fee (except a USD 750 non-refundable minimum fee), depending on when the settlement or withdrawal occurs:

• • If the case is settled within 5 days of filing, the party can recover 100% of its fees.
  • If the case is settled between 6 and 30 days of filing, it can recover 50%.
  • If the case is settled between 31 and 60 days of filing, it can recover 25%.

However, if any arbitrator has already been appointed, no refunds will be given.

B. Final Fee

The final fee is a fee that is paid upon the scheduling of a case’s first hearing that is evidentiary in nature, including hearings on dispositive motions and motions/requests for interim relief or awards. This fee is determined according to the amount of the claim, following the table below (however, cases with three or more arbitrators are subject to a minimum final fee of USD 4,175):

The final fee can be calculated using the ICDR’s Online Fee Calculator.

As with the initial filing fee, USD 4,175 is the minimum filing fee for any case requesting nonmonetary relief. When a party makes claims for both monetary and nonmonetary relief, it must pay the higher of the two filing fees.

If the case is settled or withdrawn prior to the first hearing but a final fee has been paid, the parties will be refunded (or credited) 50% of the final fee.

C. Additional Party Fee

If there are more than two parties represented by different counsel in any arbitration, an additional 10% of both the initial filing fee and the final fee will be charged for each additional separately represented party. However, it will not exceed 50% of the initial filing fee and final fee unless there are more than 10 separately represented parties.

The party naming the additional party, whether the claimant or the respondent, will be responsible for paying this fee.

D. Fees of the Arbitral Tribunal

Article 38 of the ICDR Rules provides that as soon as practicable after the commencement of the arbitration, the ICDR will designate an appropriate daily or hourly rate of compensation for the arbitral tribunal, in consultation with the parties and all arbitrators. The ICDR must set reasonable fees and will do so by taking into account the arbitrators’ stated rate of compensation (included in their resumés, which are typically given to the parties during the arbitrator selection process), and the size and complexity of the case.

Across all ICDR cases awarded from 2015 to 2017, the median tribunal fees were USD 14,000.

2. Legal Fees

In addition to the above institutional costs, parties must also budget for the legal fees incurred for counsel and their teams, which typically represent the most significant portion of total costs, as a well-defended arbitration case can take over 1,000 hours of work on the part of a party’s legal team.

Aceris Law, valuing transparency and predictability in costs, has made available online its own Arbitration Legal Fee Calculator, based on the amount in dispute. Aceris Law offers reasonable, capped legal fees for legal representation in international arbitrations, ensuring that clients benefit from high-quality advocacy with clear and upfront cost expectations. Alternatively, clients may opt for legal fees on a competitive hourly basis.

3. Expert Fees

Expert evidence is frequently used in international arbitration. Experts are appointed by parties to give their independent opinion on issues beyond the arbitral tribunal’s expertise, such as quantum, delays, and foreign law, thereby assisting the arbitral tribunal in its decision-making process.

Therefore, if such evidence is necessary, parties choose the expert they wish to appoint and pay for his/her fees and expenses. However, the fees of a party-appointed expert cannot be linked to the outcome of the case in order to preserve the impartiality and independence of the expert.

4. Hearing Costs

Hearings are an integral part of most arbitrations, and parties must also plan for hearing-related expenses, though this represents only a small portion of the overall arbitration costs.

The factors that play a role in determining the hearing costs include:

• • Whether the hearing is hosted virtually or in person.
  • If it is in person, what venue will be reserved and during what period of the year.
  • The length of the hearing.
  • The number of people attending (tribunal, party representatives, legal teams, experts, witnesses, etc.).
  • The cost of a court reporter.
  • The cost of lunch and coffee for the participants.
  • Whether translation services will be required.
  • The travel and hotel costs for the party, its legal team, witnesses, experts, and the arbitral tribunal.
  • Other costs, such as printing costs.

Further, if an arbitration case is bifurcated, the parties may have to fund two hearings – one on the preliminary issues and, if the arbitration proceeds, one final hearing on the merits of the dispute.

Typically, hearing costs are split equally between the parties, but they can then be recovered in the award.

5. Other Minor Costs to Consider

Parties must also consider that other discrete costs may arise throughout the arbitration process.

For example, arbitration often involves a document production phase, known as the “Exchange of Information” in ICDR arbitration, in which a party may request that the opposing party produce documents relevant to the case (Article 24). In some cases, this may require a party to wade through a great number of documents in order to produce those requested, which can take time and lead to the generation of additional expenses. However, tribunals may allocate costs of providing information among the parties, either in an interim order or in an award (Article 24(8)).

As another example, in some instances, tribunals may request that submissions be made both electronically and in hard-copy format or via flash drive. In these cases, parties must also pay for printing and/or the necessary equipment, as well as courier services, in order to fulfil the tribunal’s request.

Additionally, if documentary evidence referred to in the arbitration is in a language other than that of the arbitration or if witnesses speak different languages, parties should plan to spend additional funds on translations.

Thus, parties must always be ready for minor, additional unforeseen costs that may arise throughout the arbitration process.

Timing of Payments in ICDR Arbitration

In ICDR arbitrations, as already mentioned, the initial filing fee is paid up front by the party submitting claims or counterclaims, while the final fee is paid when the first evidentiary hearing is scheduled.

For the arbitral tribunal’s fees and other administrative expenses that may be incurred, Article 39 of the ICDR Rules provides that the ICDR may request that the parties deposit an advance payment, and, during the course of the arbitration, it may request supplementary deposits from the parties (Article 39(1) and (2)).

If a party asserting a claim or counterclaim fails to pay the required fees or deposits, its claim or counterclaim shall be deemed withdrawn (Article 39(3)). However, where a party (typically the respondent) declines to pay its share of the deposit, the ICDR will inform the claimant so that it can substitute and make the payment on the respondent’s behalf. In such a case, the tribunal may then make a separate award, on the claimant’s request, awarding the claim recovery of the amounts paid on the respondent’s behalf (Article 39(4)).

If the claimant is unwilling to substitute payment of the deposit for a non-paying respondent, however, the arbitral tribunal, or the ICDR if the tribunal has not yet been appointed, may order the suspension or termination of the proceedings (Article 39(5)).

If the deposits made by the parties exceed the costs and fees incurred during the procedure, the ICDR will return any unexpended balance to the parties after the final award has been made (Article 39(6)).

With regard to legal and expert costs, these are generally paid on a schedule agreed between the party and its counsel or experts. This often involves the payment of an initial retainer upon engagement of the lawyers or experts, followed by monthly or periodic invoicing.

Hearing costs are typically paid at the time of the hearing or earlier, when the venue, hotels, etc., are being reserved.

Allocation of ICDR Arbitration Costs by the Arbitral Tribunal

Article 37 of the ICDR Rules provides: “The arbitral tribunal shall fix the costs of arbitration in its award(s). The tribunal may allocate such costs among the parties if it determines that allocation is reasonable, taking into account the circumstances of the case.”

The costs of the arbitration may include:

• • Fees and expenses of the arbitrators, including taxes.
  • Costs of any assistance required by the tribunal.
  • Fees and expenses of the ICDR.
  • The reasonable legal and other costs incurred by the parties.
  • Costs incurred in emergency arbitration.
  • Costs incurred in connection with a request for consolidation.
  • Costs associated with information exchange.

Therefore, the heads of costs listed above can be recovered by the parties in the final award if the tribunal finds such recovery to be reasonable in the particular circumstances of the case.

Conclusion

Understanding the costs associated with ICDR arbitration is essential for effective case management and financial planning. While institutional and tribunal fees are relatively predictable, the largest variables usually lie in legal and expert costs, which can vary significantly depending on the dispute’s complexity.

Parties must keep in mind that even after obtaining an ICDR award, parties should budget for potential enforcement proceedings, in case the award is not complied with.

If you are considering commencing an ICDR arbitration or have had one brought against your company and have additional questions about the costs, Aceris Law would be pleased to provide you with more information.