Costs of arbitration / Article 20(2) of the ICC Rules / Normal legal costs / Discrepancy between legal costs submitted by Claimant and those submitted by Defendants / Fees of expert witness not included in normal legal costs

'In the final result, the Claimant has succeeded in its claim against the Defendants. In the circumstances, it is only fair that the costs of the arbitration, including the Arbitrator's fees as well as the administrative costs fixed by the Court, which together amount to US$ 98,000.-, should be borne solely by Defendants and I so order. Claimant having advanced 50% of the advance on costs, Defendants are thus ordered to pay Claimant US$ 49,000.-.

In addition to the above, Article 20(2) of the ICC Rules authorizes the Arbitrator to include in recoverable arbitration costs "the normal legal costs incurred by the parties". The parties have agreed to this specific rule which allows me to order Defendants whose defenses have all been denied to pay all of the Claimant's legal fees, including disbursements. However, having consulted many precedents of the Court, I am of the view that this authority should be exercised with moderation.

There is a significant discrepancy between the legal costs submitted by Claimant and those submitted by Defendants. Claimant has submitted legal costs of US$ 689,214.66 (including disbursements) while Defendants have submitted statements totalling US$ 340,821.22 (including disbursements).

This discrepancy is explained, in part, by the following. A cursory examination of both statements reveals that whereas professional services and disbursements in respect of this matter were billed to Claimant by its attorneys as of 1 June 1985, Defendants' attorneys only submitted invoices for services rendered after 1 November 1986 and disbursements after 17 July 1987. The legal fees submitted by Claimant before 1 November 1986 total US$ 88,257.93 and the disbursements incurred before July 1987 are in excess of US$ 21,000.

I point out in this connection that ICC Secretariat transmitted this file to the undersigned Arbitrator in March 1986 and that the Terms of Reference were signed by the parties and the Arbitrators as of 6 June 1986.

I have also noted that Claimant's statements include US$ 8,000.- representing the fees of an expert witness.

Article 20(2) of the ICC Rules does not authorize a party to an arbitration to claim the fees of this expert; rather, it authorizes the arbitrator to decree that the fees and expenses of an independent expert named by the tribunal shall form part of the costs of the arbitration. Thus, this sum cannot be allowed.

In the light of the foregoing, the real discrepancy between the two legal invoices is narrowed although not entirely bridged, which is not unusual. After having reviewed the statement of legal costs incurred by the Claimant as well as the whole arbitration process since I was designated as sole arbitrator and considering that the Claimant has prevailed, I order that Defendants pay to Claimant legal costs in the amount of US$ 550,000.'