Failure to pay ICC advance on costs is not fatal
Defendants in arbitration proceedings are often reluctant to pay their share of the advance on costs ordered by the arbitral institution. The temptation not to pay and to force the claimant to choose between paying the defendant’s share or letting the arbitration grind to a halt can be a strong one, especially if the health of the claimant’s finances is in doubt. There can be risks in this course of action, but the case of BDMS Ltd v Rafael Advanced Defence Systems (February 2014) has confirmed those risks are not as great as may have been feared.
In this case, the High Court decided that: the defendant’s failure to pay the International Chamber of Commerce (ICC) advance on costs was not a repudiatory breach of its arbitration agreement with the claimant; the arbitration agreement was still operative; and the claimant could therefore not withdraw from the arbitration proceedings and bring a claim through the courts.
A dispute arose between BDMS and Rafael over sums that BDMS, as claimant, alleged were due to it from Rafael, as defendant, for ‘success fees’ under a consultancy agreement. Pursuant to that consultancy agreement, all disputes arising out of the agreement were to be referred to the decision of a single arbitrator in accordance with ICC rules. The claimant started the arbitration process…
Click on the link below to read the rest of the Wragge & Co briefing.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from Wragge Lawrence Graham & Co
News from The Lawyer
Briefings from Wragge Lawrence Graham & Co
The defence of illegality – which prevents a claimant from bringing a claim that arises out of its own illegal acts – can’t be used where the company is claiming against its directors.
Principle of the free movement of capital upheld in recent decision.