Costs of arbitration / Article 20(1) / Discretionary power of the arbitrators, yes / Consistency of Article 20(1) with Swedish law, yes / Guiding principles as to the allocation of costs / Costs include a party's reasonable costs for the preparation (including negotiation in view of the settlement of a dispute) and elaboration of the litigation together with counsel's fees / Costs also include compensation for a party's work and loss of time in connection with the litigation

'When applying Article 20(1) of the Rules the arbitrators have to use their best judgement. In

exercising their discretionary power in this regard the arbitrators may be guided by the laws in the countries of the parties and the countries where the arbitration procedure takes place.

With respect to the law of Sweden, where the arbitration procedure has taken place, the following is noted from the Swedish procedural law:

A losing party shall compensate the other party for its litigation cost unless otherwise stipulated.

If the winning party is found to have initiated litigation without having given the other party reason therefore, or if the winning party has otherwise wilfully or by negligence caused unnecessary litigation, it shall compensate the other party for its litigation cost, or if the circumstances so justify, each party shall bear its own costs.

If the circumstances on which the result was dependant were not known before the litigation by the losing party, and if in addition it could not have had knowledge thereof, it may be decided that each party shall bear its costs.

If in one and the same litigation there are several claims, and if each of the parties wins in part and loses in part, each party shall bear its own costs or adjusted compensation may be awarded to one of the parties or, if the costs for different parts of the litigation can be distinguished, the obligation to pay compensation may be decided accordingly. If what a party has lost is only of little importance it may, however, receive full compensation for its costs.

The foregoing applies if a party's claim is only partly granted.

Compensation for litigation costs shall fully correspond to the cost of the preparation of the litigation and for carrying it through together with a fee to counsel to the extent that the cost has been reasonably justified in order to advance or defend the party's rights. Compensation shall also be paid for the party's work and loss of time in connection with the litigation. Negotiation for settlement of a dispute which is of immediate importance for the party's claim is considered as a measure of preparation of the litigation.

The Tribunal has considered the above principles for the award of costs as well as German and Canadian law and is satisfied that in all there jurisdictions, and considering the ICC Rules, costs should be awarded for expenses which are reasonably necessary and justified in the circumstances.'