1. Introduction

This paper discusses the interplay between two contrasting strategies available to a claimant or a respondent with regard to payment of an advance on costs.

The following scenario, which occurs increasingly frequently, sets the background for our analysis:

• The claimant files a hasty claim, while being waist-deep in financial trouble.

• In view of the claimant's situation, the respondent decides not to pay its share of the advance on costs, leaving the claimant to substitute for the respondent as per Article 37(5) in fine of the 2017 ICC Rules of Arbitration (the 'ICC Rules'): 'In all cases, any party shall be free to pay any other party's share of any advance on costs should such other party fail to pay its share.'

• Following said substitution, the claimant requests the arbitral tribunal to order the respondent to reimburse the claimant for the substitute payment.

• The respondent reacts by requesting the arbitral tribunal to order the claimant to provide security for the respondent's costs and expenses in the arbitration pursuant to Article 28(1) of the ICC Rules: 'Unless the parties have otherwise agreed, as soon as the file has been transmitted to it, the arbitral tribunal may, at the request of a party, order any interim or conservatory measure it deems appropriate.'

In this paper we shall first set out the circumstances of the case in question. We shall then present Claimant's main arguments in support of its Request for a Partial Award on Advance on Costs. This will be followed by a presentation of Respondents' counterstrategy, which was to oppose Claimant's request and, in turn, file their own Request for Security for Costs. We then analyse the arbitral tribunal's reasoning in its procedural order answering the parties' requests and, lastly, draw our conclusions.

2. Scenario

The relevant-and non-confidential-details of the case may be briefly summarised as follows:

1. The dispute arose out of a construction project proudly described as the 'project of the century' by the president of the country where it was located.

2. Respondents decided to tender jointly for the project. Claimant, a medium-sized local construction company, promised Respondents that, if their bid was successful, it would be able to handle a large part of the construction works.

3. As a fairly small enterprise, Claimant could not qualify as a joint venture partner, so the parties entered into a Collaboration Agreement, the main [Page33:] purpose of which was to jointly prepare the bid and set forth the main terms and conditions of a future subcontract to be concluded if the bid were successful.

4. Respondents' bid was accepted. However, shortly thereafter, an arrest warrant was issued against Claimant's president for corruption, and he went into hiding. Claimant stated that this greatly reduced its capacity to obtain credit and demotivated it. What is more, the company was losing employees and its future was uncertain.

5. Claimant refused to sign the subcontract and instead sought to renegotiate its key terms: it wanted to halve the amount of work it was given, and proposed providing bonds, rated as speculative, issued by a bank whose parent was located in a country undergoing an unprecedented financial crisis.

6. Yet, Respondents did not terminate the Collaboration Agreement, but continued to pursue their negotiations with Claimant, even though each day of delay exposed it to significant penalties.

7. In the end, the parties could not bridge their differences, and therefore, according to its own terms, the Collaboration Agreement came to an end. Claimant's foot-dragging and the need to find replacement contractors at short notice led to considerable costs for Respondents.

8. During the following years, Claimant did not raise any claim and, hence, accepted this course of events for what it was: a negotiation that failed because Claimant had wanted to alter the parties' deal.

9. Several years later, however, Claimant filed an application for postponement of bankruptcy proceedings in the relevant courts in its home country. It argued that an ICC arbitration (that had not even started at the time), in which it was claiming a substantial amount, was a factor that the bankruptcy court should take into account, since it would allegedly eventually improve Claimant's situation significantly.

10. Subsequently, Claimant filed a request for arbitration with ICC in which it claimed twice as much as the amount it had indicated in the bankruptcy proceedings, alleging a spectacular 'gross profit margin' and massive 'lost profits' amounting to figures completely unprecedented in the sector.

The reason for the arbitration was immaterial. Whether Claimant wanted to show the bankruptcy court that it was taking action, or hoped to pressurise Respondents into reaching a settlement, it was a lost cause.

In view of the above, Respondents exercised their right to decline to contribute to the advance on costs, whereupon the claimant stepped in and paid the advance in full, as per Article 37(5) in fine of the ICC.

3. Rules

Before analysing the parties' respective strategies as regards the advance on costs, we shall briefly review the rules of several leading arbitration institutions, in addition to ICC, that allow the advance on costs to be paid by substitution.

First, as regards ICC, which was the institution administering the case in question, Article 37(5) of the ICC Rules reads as follows:

In all cases, any party shall be free to pay any other party's share of any advance on costs should such other party fail to pay its share.

Should the advance on costs not be paid, Article 37(6) provides that:

after consultation with the arbitral tribunal, the Secretary General may direct the arbitral tribunal to suspend its work and set a time limit, which must be not less than 15 days, on the expiry of which the relevant claims shall be considered as withdrawn.

The ICC Rules do not contain a provision allowing the tribunal to issue a partial award ordering reimbursement of the part of the advance on costs paid by substitution. The only options it provides in the event of failure to pay part of the advance on costs is payment by substitution or discontinuation of the proceedings.

This contrasts with the approach taken by other leading institutional rules, such as the London Court of International Arbitration ('LCIA') or the Arbitration Institute of the Stockholm Chamber of Commerce ('SCC'), both of which contain express provisions entitling the substituting party to seek immediate reimbursement from the non-paying party 'as a debt immediately due', or a 'separate award for reimbursement'.

Articles 24.4 and 24.5 LCIA Rules (2014) read as follows:

[Page34:] In the event that a party fails or refuses to make any payment on account of the Arbitration Costs as directed by the LCIA Court, the LCIA Court may direct the other party or parties to effect a substitute payment to allow the arbitration to proceed (subject to any order or award on Arbitration Costs).

In such circumstances, the party effecting the substitute payment may request the Arbitral Tribunal to make an order or award in order to recover that amount as a debt immediately due and payable to that party by the defaulting party, together with any interest.

Article 45(4) SCC Rules (2017)1 reads as follows:

If a party fails to make a required payment, the Secretariat shall give the other party an opportunity to do so within a specified period of time. If the payment is not made, the Board shall dismiss the case in whole or in part. If the other party makes the required payment, the Arbitral Tribunal may, at the request of that party, make a separate award for reimbursement of the payment.

Other leading institutions have also adopted specific rules on measures available in the event of non-payment of the advance on costs. The following are some examples:

• Rule 57 ('Remedies for Nonpayment') of the Commercial Arbitration Rules of the American Arbitration Association:

If arbitrator compensation or administrative charges have not been paid in full, the AAA may so inform the parties in order that one of them may advance the required payment.

(a) Upon receipt of information from the AAA that payment for administrative charges or deposits for arbitrator compensation have not been paid in full, to the extent the law allows, a party may request that the arbitrator take specific measures relating to a party's non-payment.

(b) Such measures may include, but are not limited to, limiting a party's ability to assert or pursue their claim. In no event, however, shall a party be precluded from defending a claim or counterclaim.

• Annex III ('Provision of funds') of the Rules of the Civil and Commercial Arbitration Court in Madrid:

8. If at any time during the arbitration, the parties fail to pay in full the provisions, the Court will require the party in default to make the outstanding payment within ten (10) days. If the payment is not made within that period, the Court shall notify the default to the other party so that, if it deems appropriate, it may make the outstanding payment within ten (10) days. Should neither party make the outstanding payment, the Court, or as the case may be, the Arbitral Tribunal may refuse to continue with the proceedings. In this case, and after deducting the amount corresponding to administrative costs and, where applicable, fees for Arbitrators, the Court shall reimburse each party the amount advanced in excess.

9. In the event that a party has paid the provisions previously requested from the other party, the Court-or the Arbitral Tribunal, if it is already constituted-may issue an order to declare the credit the former holds against the latter, without prejudice to declaring it, if appropriate, in the award.

• Article 42 ('Advance on Costs') of the Rules of the International Arbitral Centre of the Austrian Federal Economic Chamber in Vienna:

(3) If the advance on costs allocated to one party is not received or is not received in full within the time limit specified, the Secretary General shall inform the opposing party and request it to pay the outstanding amount within 30 days of service of the request. The obligation of the non-paying party to bear its portion of the advance on costs pursuant to paragraph 2 of this Article shall not be affected thereby. If this share is not paid within the time limit specified, the Secretary General may declare the proceedings terminated (pursuant to Article 34 paragraph 4). This shall not prevent the parties from raising the same claims at a later time in another proceeding.

(4) If a party fails to fulfil its part of the payment obligations pursuant to paragraphs 1 and 2 of this Article, and if the other party pays the respective share pursuant to paragraph 3 of this Article, upon the paying party's request the arbitral tribunal may order the non-paying [Page35:] party by an award or other appropriate form to reimburse the paying party, to the extent it finds that it has jurisdiction over the dispute. This shall not affect the arbitral tribunal's authority and obligation to determine the final allocation of costs pursuant to Article 37.

In sum, unlike the LCIA and the SCC Rules, the ICC Rules (both the 2012 and 2017 versions) do not provide for immediate reimbursement of any substitute payment of the advance on costs. At the same time, it should be noted that Article 38(4) of the ICC Rules establishes that the costs are to be allocated in the final award.

4. Tactics

a. Claimant's Request for a Partial Award on Advance on Costs

After paying Respondents' share of the advance on costs per Article 37(5) in fine of the ICC Rules, Claimant submitted a Request for a Partial Award on Advance on Costs, in which it asked the arbitral tribunal: (i) to order Respondents to reimburse Claimant for the amount it paid by substitution, and (ii) to do so 'instantly' by way of a partial award and, in any event, prior to ruling on the prayers for relief submitted by Claimant in its request for arbitration.

In support of its request, Claimant put forward three main arguments, which are briefly summarised below:

1. Respondents' acts amounted to a breach of the parties' arbitration agreement. In both arbitral case law and literature it is affirmed that a respondent has a contractual obligation towards a claimant to contribute to the advance on costs e in ICC proceedings2, and that a respondent's refusal to contribute to the advance on costs would lead to the award of remedies to the claimant3. Accordingly, if a claimant is forced to substitute for a defaulting respondent, then the claimant is entitled to claim reimbursement from the respondent.

2. Claimant's financial position was not a reason for Respondents not to pay their share of the advance on costs. Respondents' obligation to pay was, thus, unconditional. Although the ICC Rules allow for the claimant to substitute for the respondent, this should not be interpreted as meaning that respondents have the option to pay or not to pay. Accordingly, Article 37(5) of the ICC Rules could not be used to support Respondents' breach of their obligation towards Claimant. Rather, said Article defines a process to deal with Respondents' breach of the arbitration agreement.

Claimant also referred to paragraph 3-1356 of The Secretariat's Guide to ICC Arbitration, indicating that the ICC Rules require 'each side to pay the advance on costs in equal shares' and that 'therefore, a respondent is obliged to contribute to the advance on costs irrespective of whether the respondent makes any claims'4.

On this basis, Claimant concluded that Respondents were 'obliged', under both the arbitration agreement and the ICC Rules, to contribute to the advance on costs.

3. Last, but not least, Claimant argued that in both arbitral case law and literature arbitral tribunals are regarded as having the power to order a respondent to reimburse a claimant for the amount the claimant paid towards the advance an costs on the respondent's behalf, and that they could do so by means of a partial award5. Claimant highlighted that the arbitral tribunal's decision on the allocation of costs in the final award is separate and distinct from its decision on reimbursement in a partial award.

Claimant further alleged that the arbitral tribunal's power to rule at the end of the arbitration on the proportions in which the parties should bear the costs of the arbitration is irrelevant, since the effect of Respondents' breach of the obligation to pay the advance on costs would already have become irrevocable.

Hence, given that the decision on the final allocation of costs is distinct and separate from the decision on the payment of the advance on costs, the arbitral tribunal could take a final decision on the latter issue by way of a partial award instead of issuing only a procedural order.

[Page36:] Claimant also asked that Respondents be ordered to pay interest to Claimant from the date on which Claimant made the substitute payment.

In sum, Claimant asked that Respondents be ordered jointly and severally to pay Claimant the amount paid by substitution, plus interest from the date of payment until full reimbursement by Respondents.

b. Respondents' counterstrategy: Opposition and Request for Security for Costs

In response to Claimant's Request for a Partial Award on Advance on Costs, Respondents not only filed their Opposition to said Request, but also submitted a Request for Security for Costs.

The arguments it put forward in support of its submissions are briefly set out below:

c. As regards Respondents' Opposition to the Request for a Partial Award

1. Respondents did not breach the arbitration agreement between the parties. Absent an express provision in the arbitration agreement or the applicable institutional rules obliging the parties to pay their share of the advance on costs, no such obligation or any right of the substituting party to an award ordering immediate reimbursement could be inferred. This was a view shared internationally by several leading scholars.6

2. Claimant did not suffer any damage, even if arguendo there was such an obligation. Respondents referred to the following scholar's reasoning in this regard:

The payment of a deposit could not result in a damage claim considering that a deposit paid to the ICC first becomes a claim against the ICC (which holds such funds in escrow for the payee), and later, when the deposit is applied to the payment of the compensation owed to the arbitrators and the ICC, it becomes a cost claim subject to the arbitral tribunal's cost award.7

Respondents further argued that, even if Claimant could be considered to have suffered damage by having to make the substitute payment, the claim would also have to be dismissed because Claimant had failed to mitigate its damage.

In this regard, it must be noted that the ICC Rules (Article 1(7) of Appendix III) allow the substituting party to 'pay the unpaid portion of the advance owed by the defaulting party by posting a bank guarantee'. Respondents argued that, since Claimant had chosen to pay cash and not post a bank guarantee, it had neglected its duty to mitigate damages.

3. Claimant did not request interim relief and, even if the arbitral tribunal were prepared to consider Claimant's request as one for interim relief, the prerequisites for interim relief were not met.

Namely, Claimant had not demonstrated either (i) that Respondents were obliged to contribute towards the advance on costs (fumus boni juris) or (ii) that Claimant would be likely to suffer irreparable harm or harm not adequately reparable if the measure were not ordered (periculum in mora).

Indeed, if Claimant were eventually to prevail in the arbitration, it would-unlike Respondents, given Claimant's very weak financial situation-be able to recover the arbitration costs. Conversely, if Claimant were to lose, it would have to bear these costs.

Therefore, any decision on reimbursement should be made in the final award at the end of the arbitration, and not in a partial award at the beginning.

4. Finally, Respondents argued that Claimant's claim would have to be rejected in view of the specific circumstances that justified Respondents' non-payment.

In this regard, Respondents referred to several international scholars who had recognised that in certain circumstances a respondent could be justified in not paying. Such circumstances included8:

• An inflated claim leading to an equally inflated advance on costs;

• A claimant's dubious financial position jeopardising the respondent's ability to recover the advance on costs at the end of the arbitration, or failure by the claimant to post adequate security.

[Page37:] Both of these circumstances, Respondents argued, applied in the case at hand.

First, Claimant's claim was clearly massively inflated. Claimant had initiated the ICC arbitration because it needed to present to the bankruptcy court an action plan to stave off insolvency. What is more, so eager was Claimant to avoid insolvency that it claimed twice as much in the arbitration as it submitted in the insolvency proceedings. Respondents argued that they should not be required to contribute to an excessively large advance on costs resulting from a claim that Claimant had greatly inflated for strategic reasons.

Second, as explained above, Claimant was in a precarious financial situation. Hence, there was a real risk that Respondents would not be able to recover their share of the advance on costs-or, for that matter, any of the arbitral costs-so, a fortiori, they could not be expected to contribute to the advance on costs.

d. As regards Respondents' Request for Security for Costs

1. Respondents additionally requested that Claimant be ordered to provide security for Respondents' costs and expenses in the arbitration in accordance with Article 28(1) of the ICC Rules, which allows arbitral tribunals to grant interim or conservatory measures as soon as the case file it is transmitted to them.

2. While the ICC Rules do not define 'interim and conservatory measures', Respondents referred to paragraph 3-1036 of The Secretariat's Guide to ICC Arbitration, which states as follows:

Common types of interim and conservatory relief include: … Security for costs. Where, for example, there is a substantial risk that a party (usually the claimant) may not be able to cover the opposing side's arbitration costs (i.e. if ultimately ordered to do so), the arbitral tribunal may be prepared to order that party to place funds into an escrow account that is either controlled by the arbitral tribunal or jointly by the parties. The costs may alternatively be secured by way of a bank bond or guarantee.9

3. Respondents argued that the two requirements for ordering security for costs were both met: (1) there was a potential, future claim for the award of arbitration costs; and (2) there was immediate danger of being unable to benefit from that claim, given Claimant's ongoing bankruptcy proceedings and precarious financial position.

In sum, Respondents requested (1) that Claimant's Request for a Partial Award be dismissed in its entirety, and (2) that Claimant be ordered to provide security for Respondents' costs and expenses in the arbitration in the form of a cash deposit with the arbitral tribunal or ICC, or in the form of a bank guarantee.

5. Procedural order: power of the tribunal to address the issues at stake

Claimant submitted a Reply to Respondents' Request for Security for Costs (as it turned on the merits and specific facts of the case, it will not be analysed here for reasons of confidentiality), after which the arbitral tribunal issued a procedural order in which it ruled as set out below.

1. The arbitral tribunal remarked at the start that 'both requests are subject to partly identical requirements, for which reason it will address those requirements together in the following considerations'. This showed that Respondents' counterstrategy of both opposing Claimant's request and filing their own request was central to obtaining the dismissal of the former

2. The arbitral tribunal then proceeded to address, first, Claimant's request that Respondents be ordered to pay their share of the advance on costs, considering that 'Claimant must demonstrate the fulfilment of the following requirements (1) the existence of an obligation of Respondents to pay, be it a contractual or a procedural obligation, and (2) no legitimate reasons for Respondents to refuse payment of their share of the advance on costs'.

3. In this regard, the arbitral tribunal examined only the second requirement, which it considered as clearly having not been met, 'because Respondents would in any case have legitimate reasons not to pay their share of the advance on costs'.

4. In reaching such a clear-cut conclusion, the arbitral tribunal based its reasoning on the evidence submitted by the Parties, indicating that 'based on the information received by [sic] the Parties, the Arbitral Tribunal is of the opinion that Claimant is currently in a difficult financial [Page38:] situation and that despite some positive trends shown by Claimant it cannot be excluded that the financial situation gets even worse'.

5. The tribunal determined that 'therefore, even though Claimant lists a number of facts that demonstrate a positive trend in the development of Claimant's situation (…) they are not sufficient to dissipate the Arbitral Tribunal's concerns that, in case of need, it could still be very difficult for Respondent to claim any money from Claimant'.

6. While admitting Respondents' argument that Claimant's claim should be rejected in view of its difficult financial situation, the arbitral tribunal interestingly decided not to rule on Respondents' argument relating to Claimant's allegedly inflated claim, reasoning as follows:

Respondents' second reason to withhold the payment of its share of advance on costs is the allegedly massively inflated claim of Claimant. However, based on the current facts on file, it is not possible and would be premature for the Arbitral Tribunal to assess this allegation conclusively.

In other words, the Arbitral Tribunal cannot assess at this point whether the amount claimed by Claimant in this arbitration is legitimate or not.

7. In short, the arbitral tribunal decided to dismiss Claimant's request for Respondents to be ordered to pay their share of the advance on costs, since: (a) Claimant's difficult financial situation was 'sufficient for the Arbitral Tribunal to conclude that there are indeed legitimate reasons of Respondents to locate [sic] a considerable risk that, should Respondents win the case, it could be difficult or even impossible to recover the costs of this arbitration from Claimant', and (b) Claimant had failed to 'demonstrate (on a prima facie basis) that it is likely to suffer irreparable harm or harm not adequately reparable if the reimbursement of the payment of Respondents' share is not ordered at this time (periculum in mora)'.

8. The arbitral tribunal then went on to address Respondents' request for security for costs and, as a preliminary issue, established its power to decide on interim and conservatory measures as per Article 28(1) of the ICC Rules, which also included the power to decide on any request for security for costs. It is worthy of note that the arbitral tribunal further established that it would 'follow the commonly accepted approach that this power should be exercised in a very restrictive manner only'.

9. The arbitral tribunal then described the requirements that had to be met to grant Respondents' request as follows: 'for Claimant to be ordered to provide security for Respondents' costs and expenses, Respondents must demonstrate the fulfilment of the following requirements: (1) the existence of a potential, future claim for reimbursement of costs worthy of protection and (2) the imminent danger of being deprived of such claim'.

10. Again, as in its first decision, the arbitral tribunal examined only the second requirement, because it considered that this second requirement had not been fulfilled.

11. What is more, the reason that led the arbitral tribunal to this conclusion was the same as in its earlier decision on Claimant's request, namely Claimant's financial situation at the time:

Claimant is not manifestly insolvent or bankrupt at this point and there are no bankruptcy proceedings, which would have been stayed for lack of assets. But these would be the kind of threshold to be met by Respondents in order to demonstrate an actual imminent danger of being deprived of their claim for reimbursement of costs and to legitimately request security for costs.

12. Hence, the arbitral tribunal concluded that 'the strict requirements to order Claimant to provide security for Respondents' costs and expenses are not met at this point in time' and, therefore, decided to dismiss Respondents' request for Claimant to be ordered to provide security for Respondents' costs and expenses in the arbitration.

13. Overall, on the basis of the above considerations, the arbitral tribunal ruled as follows:

Claimant's request to order Respondents' jointly and severally to pay to Claimant an amount of … as of the date of payment of Respondents' share by Claimant … and until reimbursement by Respondents is dismissed.

Respondents' request to order Claimant to provide security for Respondents' costs and expenses in this arbitration is dismissed.

[Page39:] Yet, what at first sight appeared to be a 'draw' between both parties ended up being to Respondents' advantage and Claimant's disadvantage, as shall be further analysed below.

6. Conclusions

Two main conclusions can be drawn from the parties' submissions in this case, based Articles 28(1) and 37(5) in fine of the ICC Rules:

A. Respondents' request for security for costs ultimately helped to defeat Claimant's request for reimbursement.

Throughout its procedural order the arbitral tribunal evaluated the requests of both sides in parallel, not only as regards the relevant requirements but also the facts that it decided to take into consideration, namely:

• As noted above, the arbitral tribunal indicated from the outset that 'both requests are subject to partly identical requirements, for which reason it will address those requirements together in the following considerations'.

• Accordingly, the arbitral tribunal gauged the prerequisites for each request side-by-side:

• As to Claimant's request for reimbursement by Respondents: 'Claimant must demonstrate the fulfilment of the following requirements (1) an obligation of Respondents to pay, be it based on a contractual or a procedural obligation, and (2) no legitimate reasons for Respondents to refuse payment of their shares of the advance on costs.'

• As to Respondents' request for Claimant to provide a security: 'Respondents must demonstrate the fulfilment of the following requirements: (1) the existence of a potential, future claim for reimbursement of costs worthy of protection and (2) the imminent danger of being deprived of such claim.'

• In doing so, the arbitral tribunal effectively paved the way for an answer that would be the most coherent in view of Claimant's difficult financial situation at the time.

• In this regard, it may be argued that Claimant's dubious financial situation may not have played such a key role in the arbitral tribunal's reasoning if it had been required to evaluate solely Claimant's request for Respondents to be ordered to pay their share of the advance on costs.

• While the arbitral tribunal might have in any case eventually dismissed Claimant's request, it is relevant to note that the fact that Respondents' request for security for costs was based on Claimant's financial situation helped to evidence Claimant's financial difficulties and underline the need for the arbitral tribunal to take them into account when deciding whether there were legitimate reasons for Respondents' refusal to pay their share of the advance on costs.

• While it may also be argued, as Respondents did in the arbitration, that Article 36(5) in fine of the ICC Rules simply allows payment by substitution but does not authorise the arbitral tribunal to issue a partial award ordering reimbursement of the substitute payment, the ground on which the arbitral tribunal eventually dismissed Claimant's request was Claimant's dubious financial situation, which provided 'indeed legitimate reasons of Respondents to locate [sic] a considerable risk that, should Respondents win the case, it could be difficult or even impossible to recover the costs of this arbitration from Claimant'.

B. Several of the tribunal's conclusions on the facts when considering the requests of both sides benefitted Respondents' overall position.

Most interestingly, the importance attached to Claimant's financial difficulties in the arbitral tribunal's reasoning assisted Respondents in the wider context of the arbitration as a whole. It showed that the arbitral tribunal shared Respondents' concerns over the timing of the claim (filed several years after the termination of the parties' Collaboration Agreement and straight after the suspension of Claimant's bankruptcy proceedings) and the risk that Respondents would not be able to recover the arbitration costs from Claimant.

Notably, the Arbitral Tribunal issued a specific ruling in favour of Respondents, as follows:

In light of the Arbitral Tribunal's and the Parties' duty to conduct the arbitration based on good faith not only in an expeditious and cost-effective but also in a transparent manner, the Parties are encouraged to cooperate and, in order to avoid further unnecessary procedural motions, agree on a reasonable exchange of information on Claimant's financial situation going forward, i.e. on the submission to Respondents of the Trustee Reports. The Arbitral Tribunal would welcome if Claimant would share those Reports in the future with Respondents without the need of a motion by the latter.

[Page40:] That ruling led to evidence of Claimant's ongoing financial difficulties, which had ultimately caused it to initiate arbitration proceedings against Respondents.

In the end, the arbitral tribunal held that Claimant was in breach of the Collaboration Agreement and that Respondents, therefore, lawfully withdrew from it. Claimant had its claim dismissed and was ordered to pay Respondents' arbitration costs.

Where, as in the case discussed above, a claim is brought in haste by a claimant in financial difficulties, there are useful lessons to be learned from the counterstrategy adopted by Respondents and the specific requirements considered by the arbitral tribunal in its procedural order when deciding on each party's requests.

1
Note that a similar provision appeared in the 2010 SCC Rules, with slight differences of wording, including the term 'required' in the second sentence and 'such party' instead of 'that party' in the third sentence: 'If a party fails to make a required payment, the Secretariat shall give the other party an opportunity to do so within a specified period of time. If the required payment is not made, the Board shall dismiss the case in whole or in part. If the other party makes the required payment, the Arbitral Tribunal may, at the request of such party, make a separate award for reimbursement of the payment.'

2
See Savage & Gaillard (eds), Fouchard Gaillard Goldman on International Commercial Arbitration, (Kluwer Law International, 1999) § 1254; Webster & Bühler, Handbook of ICC Arbitration: Commentary, Precedents, Materials (Sweet & Maxwell, 2009) §§ 30-33; X. Company (Panama) v. Y. S.A. (Suisse), Partial Award, 27 March 2001, (2001) 19:2 ASA Bulletin 285 at 288, 290. Rohner & Lazopoulos, 'Respondent's Refusal to Pay its Share of the Advance an Costs' (2011) 29:3 ASA Bulletin 553 at 564 et seq.

3
See Rohner & Lazopoulos, supra note 2 at 556; Fadlallah, 'Payment of the Advance to Cover Costs in ICC Arbitration: the Parties' Reciprocal Obligations' (2003) 14:1 ICC International Court of Arbitration Bulletin 53, § 14.

4
See Fry, Greenberg & Mazza, The Secretariat's Guide to ICC Arbitration (2012) § 3-1356.

5
See Derains & Schwartz, A Guide to the ICC Rules of Arbitration (Kluwer Law International, 2005) at 347; Fadlallah, supra note 3 at 12; Rohner & Lazopoulos, supra note 2 at 556.

6
See Bühler, 'Note - Sentence Partielle du 1er juin 2004 dans l'affaire CCI No 12491/KGA/EC' (2006) 24:2 ASA Bulletin 290 at 299 et seq.; Derains & Schwartz, supra note 5 at 347 ; Favre-Bulle, 'Les conséquences du non-paiement de la provision pour frais de l'arbitrage par une partie - Un tribunal arbitral peut-il condamner un défendeur au paiement de sa part de l'avance de frais?' (2001) 19:2 ASA Bulletin 227.

7
Bühler, supra note 6 at 298.

8
See Rohner & Lazopoulos, supra note 2 at 560 et seq.

9
See Fry, Greenberg & Mazza, supra note 4, § 3-1036.