The following Arbitration guidance note Produced in partnership with Stephenson Harwood provides comprehensive and up to date legal information covering:
The notion of ‘security for costs’ will be familiar to common lawyers but perhaps less so to civil lawyers, as it is closely related to the common law rule that, in general, the costs of bringing proceedings should ‘follow the event’ or, put more simply, the losing party should pay. In litigation in England and Wales, the general rule, if a court decides to make an order on costs, is that the unsuccessful party will be ordered to pay the recoverable costs of the successful party, although the court retains a wide discretion in this regard—see Practice Note: Cost orders—the general rule and the court's discretion. To bolster this principle, the mechanism of security for costs exists and allows a defendant (whether to the main claim or a counterclaim) to apply for an order that the claimant provides security for the likely recoverable costs the defendant will incur in defending the claim—see Practice Note: Security for costs—what is it, its use and the court's discretion. It is difficult to argue, as a matter of principle, that such a mechanism should not be available in international commercial arbitrations. However, whether an arbitral tribunal has the power to order security for costs in a particular international arbitration will depend on what powers the parties have agreed to vest in the tribunal (either expressly or impliedly by the incorporation of arbitration rules that provide such a power) and/or
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