The Recoverability of Outcome-Based Fees Related to Dispute Financing in International Arbitration: Does the Essar in Norscot Case Bring Anything New to the Table?

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Abstract

The article provides an in-depth analysis of the recent decisions made in Essar in the Norscot case , in which the arbitrator decided to order a non-funded party to recover the third party funder's uplift in its entirety. The follow-up discussion focused on the question of whether the arbitrator had the power to do so in the first place and the funder's uplift properly characterized as costs under applicable rules. This article follows this discussion and embeds it within international arbitration theory and practice to determine whether there are any novelties that are brought to the table by Essar in Norscot decisions when it comes to recoverability of outcome-based fees in international arbitration.

The article, besides addressing the arbitrator's mandate to decide on outcome-based fees and their characterization as costs , develops the discussion further and addresses the application of indemnity basis under the prevailing transnational standard of allocation in international arbitration. Finally, the last part of the article takes a step further from Essar in the Norscot case by posing a question as to whether the next similar case outcome-based fees can be recovered, if not as costs, then as damages under national substantive law.
Original languageEnglish
JournalSlovenska arbitrazna praksa
VolumeVI
Issue number1
Publication statusPublished - 31 Mar 2017

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title = "The Recoverability of Outcome-Based Fees Related to Dispute Financing in International Arbitration: Does the Essar in Norscot Case Bring Anything New to the Table?",
abstract = "The article provides an in-depth analysis of the recent decisions made in Essar in the Norscot case , in which the arbitrator decided to order a non-funded party to recover the third party funder's uplift in its entirety. The follow-up discussion focused on the question of whether the arbitrator had the power to do so in the first place and the funder's uplift properly characterized as costs under applicable rules. This article follows this discussion and embeds it within international arbitration theory and practice to determine whether there are any novelties that are brought to the table by Essar in Norscot decisions when it comes to recoverability of outcome-based fees in international arbitration. The article, besides addressing the arbitrator's mandate to decide on outcome-based fees and their characterization as costs , develops the discussion further and addresses the application of indemnity basis under the prevailing transnational standard of allocation in international arbitration. Finally, the last part of the article takes a step further from Essar in the Norscot case by posing a question as to whether the next similar case outcome-based fees can be recovered, if not as costs, then as damages under national substantive law.",
author = "Patricia Zivkovic",
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N2 - The article provides an in-depth analysis of the recent decisions made in Essar in the Norscot case , in which the arbitrator decided to order a non-funded party to recover the third party funder's uplift in its entirety. The follow-up discussion focused on the question of whether the arbitrator had the power to do so in the first place and the funder's uplift properly characterized as costs under applicable rules. This article follows this discussion and embeds it within international arbitration theory and practice to determine whether there are any novelties that are brought to the table by Essar in Norscot decisions when it comes to recoverability of outcome-based fees in international arbitration. The article, besides addressing the arbitrator's mandate to decide on outcome-based fees and their characterization as costs , develops the discussion further and addresses the application of indemnity basis under the prevailing transnational standard of allocation in international arbitration. Finally, the last part of the article takes a step further from Essar in the Norscot case by posing a question as to whether the next similar case outcome-based fees can be recovered, if not as costs, then as damages under national substantive law.

AB - The article provides an in-depth analysis of the recent decisions made in Essar in the Norscot case , in which the arbitrator decided to order a non-funded party to recover the third party funder's uplift in its entirety. The follow-up discussion focused on the question of whether the arbitrator had the power to do so in the first place and the funder's uplift properly characterized as costs under applicable rules. This article follows this discussion and embeds it within international arbitration theory and practice to determine whether there are any novelties that are brought to the table by Essar in Norscot decisions when it comes to recoverability of outcome-based fees in international arbitration. The article, besides addressing the arbitrator's mandate to decide on outcome-based fees and their characterization as costs , develops the discussion further and addresses the application of indemnity basis under the prevailing transnational standard of allocation in international arbitration. Finally, the last part of the article takes a step further from Essar in the Norscot case by posing a question as to whether the next similar case outcome-based fees can be recovered, if not as costs, then as damages under national substantive law.

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