English Commercial Court: article 30 of ICC Rules creates binding obligation to pay allotted share of advance on costs

By Matthew Saunders and Oliver Perez

The English Commercial Court has clarified the nature of an allotted share of an advance of costs pursuant to article 30 of the ICC Rules 1998 (in broad terms the same as article 36 of the ICC Rules 2012). 

The case is now the key decision of the English courts on this issue, confirming that article 30 of the rules (and therefore article 36 of the 2012 rules) creates a binding contractual obligation under English law to pay the allotted share and providing clarification to claimants on the options available where a defendant refuses to pay an advance on costs.

The underlying dispute in BDMS Ltd v Rafael Advanced Systems concerned sums allegedly due to the claimant from the defendant by way of ‘success fees’ under a consultancy agreement. Pursuant to clause 7 of the agreement, the parties had agreed to submit any disputes arising out of or in connection with the agreement to arbitration under the rules of the International Chamber of Commerce…

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