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Arbitration (Scotland) ACT 2010

Rule 62 – Liability for recoverable arbitration expenses Default

215.Rule 62 allows the tribunal to allocate liability for the recoverable expenses (or any part of those expenses) between the parties and decide how much one party may recover from the other. For example, if the parties have paid an equal share of the arbitrator’s fees and expenses in advance and the tribunal makes an award allocating liability for expenses 70% to party A and 30% to party B then party A has the right to recover 20% of the expenses from party B.

216.As this is a default rule, parties are free to agree how to divide these expenses between themselves. Failing such agreement, rule 62(1) gives the tribunal the power to allocate expenses as it thinks fit. Rule 62(2) provides that this must be done with regard to principle that expenses follow award. In making an award allocating the parties’ liability for expenses, the tribunal can take into account whether the parties have fulfilled their duties towards the arbitral process and whether, for example, they have been guilty of delay or obstruction.

217.Until an award for recoverable expenses is made or where the tribunal does not make an award, rule 62(3) imposes joint liability on the parties for any part of the recoverable arbitration expenses in respect of which the tribunal does not allocate liability by award (and so makes each liable, as between themselves, for a 50% share). This express right of relief in the Act is why it is unnecessary to make this liability “joint and several”.

218.Rule 62(4)(a) makes it clear that parties’ liability to each other in respect of recoverable tribunal fees and expenses (and other recoverable third party expenses) does not relieve the parties of their own liability to the tribunal or third parties, for example, just because a tribunal orders Party A to reimburse Party B in respect of legal costs does not relieve Party B of its liability to pay its lawyers. Rule 62(4)(b) makes it clear that the rule does not create a jus quaestium tertio (that is, continuing the example, it does not give the third party lawyers a title to sue Party A).

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