Produced in partnership with Shawn Kirby of Wikborg Rein

The following Arbitration practice note produced in partnership with Shawn Kirby of Wikborg Rein provides comprehensive and up to date legal information covering:

  • LMAA—costs
  • Disclosure of costs information
  • Applications for costs
  • Costs rationale
  • Security for costs
  • Security for a party’s costs
  • Security for the tribunal’s costs


The London Maritime Arbitrators Association (LMAA) Terms 2021 (the Terms) apply to arbitrations commenced on or after 1 May 2021 where the parties have agreed that they apply. The Terms replaced the 2017 version (LMAA Terms 2017) which apply to arbitrations commenced between 1 May 2017 and 30 April 2021. Relevant differences, including paragraph numbering, are noted below.

There is an express obligation in the Terms for the parties and tribunal to 'actively consider ways to make the arbitral process as cost-effective and efficient as possible' (Second Schedule, paragraph 13). That requires, inter alia, that the parties adhere to procedures set out in the Second and Fourth Schedules, unless an alternative approach can be justified in the interests of efficiency.

Costs in LMAA arbitrations can vary widely depending on the nature of the dispute and the approach taken by the parties and tribunal.

Unlike other arbitral rules, there is no central body to administer the application of the Terms so there are no institutional overheads to cover. The only fees paid by the parties, beyond their own legal expenses and disbursements, are to the arbitrators themselves.

Disclosure of costs information

In respect of the parties' costs, that is one matter which the parties are obliged to declare in the LMAA Questionnaire in the Third Schedule (the Questionnaire) (see: LMAA—commencement and arbitration procedure—the LMAA Questionnaire) that is exchanged after the

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