Between rags and riches: rethinking security for costs in international commercial arbitration

Abstract

Abstract This article assesses the traditional approach adopted to making an order of security for costs in international arbitration, which focuses almost exclusively on the financial standing of the claimant. The article argues that this approach is inappropriate, and has the potential to undermine the purpose of the remedy itself; namely, to protect a respondent who has been dragged into an arbitration against his will, and may subsequently struggle to enforce a costs award against the claimant if he is successful in due course. The author therefore argues that the financial position of the respondent—and the impact of the proceedings on that respondent—should be hardwired into the assessment undertaken by arbitral tribunals when considering whether to order the claimant to provide security for the respondent’s costs.