The Advance on Costs in International Arbitration and the Scope of Tribunal Discretion

p class="MsoNormal"This article examines the issues that arise when a respondent defaults on the advance on costs in international arbitration. It provides an overview of the advance on costs provisions contained within various arbitral institutional rules, with a particular focus on mechanisms addressing a respondent’s failure to pay their share. This article also discusses the legal basis of the obligation to pay the advance on costs. In this regard, it explores the different remedies available to nondefaulting parties when seeking reimbursement of their substitute payment. The remainder of the article discusses the scope of the arbitral tribunals’ discretion in deciding whether to issue an order or award for reimbursement. The authors consider which circumstances may justify a respondent’s default on the advance on costs, drawing upon existing arbitral jurisprudence and related caselaw. The analysis highlights the lack of explicit guidance in most institutional rules and the implications of this uncertainty for tribunals and parties.o:p/o:p