The Exception in Theory, a Unicorn inPractice? Revisiting Security for Costs froma Practitioner’s Perspective

Abstract

ARBITRAL TRIBUNALS HAVE THE POWER: NOW WHAT? 

In international arbitration, security for costs (cautio iudicatum sovlvi) has long played a fairly limited role. With third-party funding gaining traction in recent years, the international arbitration community has revisited the instrument. Both in theory and in practice, however, these discussions focused primarily on the implications of the non-applicant being funded by a third party. We take this development as a reason to revisit security for costs more generally.
What can be regarded as settled nowadays is that arbitral tribunals have the power to order security for costs. Some national arbitration laws or institutiona rules explicitly vest the arbitral tribunal with this power. Absent such a provision (or an express agreement between the Parties), the power to order security for costs stems from the arbitral tribunal’s broad powers under the applicable national arbitration laws and/or the applicable institutional rules to issue provisional and conservatory measures.