Breakfast at SCC: Security for Costs in International Arbitration

The security for costs measure provides responding parties with the possibility, in certain circumstances, to ensure their legal costs will be covered in the event of a successful result in the case. It represents “a deviation from the principle that each party bears its own costs until the arbitral tribunal renders its costs decision.”  

Arbitral Tribunals undertake a careful balancing act, considering on the one hand the rights of the party requesting the measure and, on the other hand, the counterparty’s right to bring its claim or counterclaim. 

Arbitration practitioners have made use of this procedural tool, where available, as a deterrent against frivolous claims, increasing the efficiency of arbitration. However, the question of security costs also raises concerns, such as ensuring access to justice, which has even led to questions as to the legitimacy of arbitration as a dispute resolution mechanism. 

In the context of investment arbitration, the question of security for costs is currently under consideration before the UNCITRAL Working Group III, as detailed in its Working Paper 244, Draft Provision 5.  

Since the entry into force of the 2017 SCC Arbitration Rules, responding parties in SCC arbitrations have had the express possibility to request that the Arbitral Tribunal grant security for costs. Between 2017 and 2022, over 30 applications for security for costs were made under the SCC Rules. However, an order to provide security for costs will only be granted where circumstances are “exceptional”. 

Panelists

• Anna Joubin-Bret, Secretary of the United Nations Commission on International Trade Law and Director of the International Trade Law Division in the Office of Legal Affairs of the UN Secretariat 
• Monique Sasson, Partner DeliSasson and ARBITRA 
• Faris Nasrallah, Head of Arbitration, Crescent Petroleum 
• Jake Lowther, Specialist Counsel, SCC Arbitration Institute 

Moderator

• Crina Baltag, Assoc. Professor (Reader), Stockholm University

Join us for breakfast and discussion with a panel that will be addressing the nature and purpose of security for costs applications in both commercial and investment arbitrations, including with specific reference to both the legitimacy and efficiency of the arbitration proceedings.  

Date: 7 November 2024 
Time: Breakfast from 8.00 am and discussion between 8.30 am and 10.00 am 
Venue: SCC Arbitration Institute, Regeringsgatan 29, Stockholm