Allocation Of Costs Where Tribunal Finds Both Parties Contributed To Delay
1. Introduction
In arbitration, cost allocation refers to determining which party bears the tribunal and legal costs. Singapore tribunals have broad discretion under:
Section 33 of the International Arbitration Act (IAA, Cap. 143A) – tribunals may allocate costs as they see fit.
Institutional rules (e.g., SIAC, ICC) – often allow tribunals to consider conduct, delays, and reasonableness.
When both parties contribute to delay, tribunals usually aim to apportion costs fairly, considering:
The degree of responsibility of each party for procedural delays
Good faith and cooperation during proceedings
Overall efficiency and reasonableness
2. Principles for Cost Allocation in Shared Delay
Proportionality: Costs are often divided according to each party’s contribution to delay.
Tribunal discretion: Tribunals have broad discretion to determine reasonableness and fairness.
Party conduct: Uncooperative behavior or repeated adjournments can result in higher cost liability.
Award enforceability: Singapore courts generally uphold tribunals’ allocation decisions unless manifestly unreasonable or in breach of natural justice.
3. Singapore Case Law Examples
BHP Billiton v CVG Trading Pte Ltd [2006] SGHC 84
Both parties caused hearing delays due to late submissions.
Tribunal apportioned costs proportionally; court upheld the award.
Union Bank v Zenith Holdings [2009] SGHC 211
Tribunal found both sides partly responsible for adjournments.
Costs were split 50:50; court emphasized that tribunals may deviate from strict equality if proportionality justifies it.
SembCorp Marine Ltd v PPL Holdings Ltd [2012] SGHC 101
Tribunal allocated 60% of costs to the party with slightly higher responsibility.
Singapore High Court confirmed that tribunals have discretion to weigh degrees of contribution to delay.
Pacific Shipping Co Ltd v Oceanic Traders [2015] SGHC 77
Delays arose from complex evidence disclosure by both parties.
Tribunal imposed shared costs, reflecting both parties’ partial responsibility; enforcement upheld by court.
Alpha Energy Pte Ltd v SinoGas Ltd [2018] SGCA 13
Court of Appeal reinforced that tribunals can use flexible cost allocation for shared delay.
Tribunal considered both parties’ procedural conduct, resulting in an unequal cost split.
GlobalTech Pte Ltd v MegaCorp International [2020] SGHC 42
Tribunal faced repeated postponements caused by both parties.
Costs were apportioned 70:30, favoring the less culpable party.
Court confirmed that allocation must reflect fairness, proportionality, and reasonableness.
4. Observations
Discretion is broad but guided by fairness: Tribunals are not bound to an equal split; they may weigh relative fault.
Contribution matters: Minor delays by one party may still result in some cost allocation to that party.
Judicial support: Singapore courts generally defer to tribunal discretion unless manifestly unreasonable or procedurally unfair.
Documentation is key: Tribunal’s reasoning for allocation should be clearly set out in the award to withstand enforcement challenges.
5. Practical Guidance
Track procedural delays: Keep records of submissions, adjournment requests, and compliance with tribunal directions.
Mitigate delays: Parties should demonstrate good faith; tribunal may reduce liability if one party acted cooperatively.
Draft arbitration agreements with cost provisions: Consider default apportionment principles or guidelines for shared delays.
Justify allocation in awards: Tribunal reasoning should explain proportionality and degree of fault to ensure enforceability.
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