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Security for Costs

An arbitral tribunal’s power to order interim and conservatory measures under the ICC Arbitration Rules is generally thought to include the power to order security for costs. However, this is a power used rarely and restrictively. In six out of the nine cases reported here arbitrators rejected outright an application for security for costs, while in the other three cases the application was granted only in part or subject to certain conditions. Exceptional circumstances that were considered to justify ordering security for costs included a degree of impecuniousness beyond mere insolvency or financial weakness, a change of circumstances so severe as to jeopardize the enforceability of a future award of costs, and the deliberate alienation of funds to avoid liability. In the rare cases where it was granted, security for costs was limited to future anticipated costs and amounts not already covered by the ICC advance on costs.

Readers are reminded that a procedural order is a decision made by a particular arbitral tribunal in the exercise of its duties under the ICC Arbitration Rules in light of the circumstances of the case. Unlike awards, procedural orders are not subject to scrutiny by the ICC International Court of Arbitration.

For the purpose of publication, the procedural decisions reproduced here have been redacted so as to remove names of parties and other details not indispensable for their intelligibility. The decisions are reproduced in their original language. The footnotes form part of the original texts, unless otherwise stated, but have been renumbered in a continuous sequence.

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Security for Costs