Costs of arbitration / Application, as to the burden of costs, of Articles 696 and 700 of the French Code of Civil Procedure which are consistent with Article 20 of the ICC Rules

'Article 20 of the Rules provides that the Arbitral Tribunal, after having dealt with the merits of the case, shall decide which of the parties shall bear the costs of arbitration or in what proportions the costs shall be borne by the Parties, such costs consisting in those which the Court will fix (administrative costs and arbitrators' fees) and in the normal legal costs incurred by the Parties.

Further to Procedural Order No. 3 of November 1991, Claimant submitted a statement of the legal costs which he has incurred in this arbitration amounting to a total of DM 8,184, out of which an amount of DM 4,624 corresponds to costs incurred in participating in the arbitral session held in Paris and another amount of DM 3,580 refers to fees paid for legal advice (i.e. 89 hours at DM 40/hour).

Defendant did not submit any statement of his legal costs and neither did he make any comment on the statement of costs submitted by Claimant.

By its Procedural Order No. 1, the Arbitral Tribunal decided to apply French procedural law, if and when necessary to supplement the provisions of the ICC Rules of Arbitration.

As to the burden of costs, Articles 696 and 700 of the New Code of Civil Procedure (NCPC) are relevant.

Under Article 696 NCPC, (like under German law: paragraph 91-1 ZPO), the losing party shall bear the costs of the litigation or of the arbitration. In the present case, Defendant is clearly the losing party and he shall consequently bear the costs of arbitration fixed at US$ 16,000.

Under Article 700 NCPC, the judge, and in the same way the arbitrator, may consider unequitable that one party should bear the costs incurred above and over those referred to in Article 696 of the same code, i.e. in practice its costs for legal assistance and counsel, travel costs and the like, and decide that such costs, for an amount that he will determine, shall be borne by the other party. This provision of French law is consistent with the notion of "normal legal costs incurred" in Article 20 of the ICC Rules of Arbitration.

In the present case, the record of the proceedings earlier made shows clearly that Defendant, by his dilatory tactics, is responsible for the time spent and the complications thus generated in this arbitration, which is in direct relation to legal costs incurred by Claimant. Observing indeed that the larger part of such costs was generated by Claimant's participation in the arbitral session held in Paris, an arbitral session which was requested by Defendant only but in which, although put on his guard against such an eventuality, he failed to appear, the Arbitral Tribunal holds that it would certainly be unequitable for Claimant to bear these costs.

The Arbitral Tribunal, after careful examination, of Claimant's statement of costs, also holds that they are "normal" in the sense of Article 20 of the Rules.

Defendant who, as earlier reported, did not pay any advance on arbitration costs shall consequently reimburse to Claimant the costs of arbitration fixed by the Court at US$ 16,000, plus pay an amount of DM 8,184 for legal costs incurred.'