The United Nations Commission on International Trade Law (“UNCITRAL”) is the central body within the United Nations system responsible for modernising and harmonising international trade law.[1] Although widely used in investment and commercial disputes, it is not an arbitral institution.[2] Instead, parties use the UNCITRAL Arbitration Rules in ad hoc arbitration proceedings or in proceedings administered by the Permanent Court of Arbitration (“PCA”) or a different arbitral institution.
The UNCITRAL Rules are neutral, flexible, and well-established.[3] They allow parties to maintain a high level of procedural control, although they can also lead to higher costs because the arbitrators set their own fees.
It is accepted today that ad hoc arbitration under the UNCITRAL Rules offers practically the same degree of predictability as any form of institutional arbitration and, if compared to institutional arbitration, UNCITRAL proceedings have one distinct advantage: more party autonomy as to procedure.[4]
This note provides an overview of the main heads of UNCITRAL arbitration costs and briefly examines how UNCITRAL tribunals allocate costs between the parties. An UNCITRAL arbitration typically includes the following major cost components: (i) the fees and expenses of the arbitral tribunal; (ii) expert witnesses’ fees and expenses (if any); (iii) legal fees incurred by the parties; (iv) the fees and expenses of the appointing authority (if any); (v) hearing costs and (vi) minor other costs.
I. Heads of Costs Under the UNCITRAL Rules
UNCITRAL arbitration costs are dealt with in Articles 40–43 of the UNCITRAL Rules:
- Article 40(2) provides a breakdown of all the items which comprise the costs of UNCITRAL arbitrations;[5]
- Article 41 deals with the fees and expenses of the arbitrators;
- Article 42 deals with the allocation of costs between the parties; and
- Article 43 deals with the “deposits of costs” (commonly known as advance on costs) to be made by the parties.
The arbitral tribunal is free to fix the costs of the arbitration in the final award or, if it deems it more appropriate, in another decision.[6]
A. Articles 40(2)(a) to (c) and 41: the Fees and Expenses of the Arbitral Tribunal
Article 41(1) provides that the fees and expenses of the arbitrators must be “reasonable in amount”. In order to assess such reasonableness, the amount in dispute, the complexity of the subject matter, and the time spent by the arbitrators are taken into account, in addition to any other relevant circumstances of the case.[7]
1. The Fees of the Arbitral Tribunal
These fees must be stated separately for each arbitrator. Unlike in institutional arbitrations, arbitrators fix their own fees, which must be in accordance with Article 41.[8] The allocation of fees between arbitrators is not dealt with by the UNCITRAL Rules. Frequently, arbitrators agree on fixed shares such as 50/25/25.[9]
If, however, there is an appointing authority and it applies a particular method for determining the fees for arbitrators, the arbitral tribunal in fixing its fees must take such method into account to the extent that it considers appropriate in the circumstances of the case.[10]
Once the tribunal is formed, it must promptly indicate to the parties how it plans to calculate its fees and expenses, including the rates it intends to charge. After receiving this proposal, each party has 15 days to ask the appointing authority to review it. The appointing authority then has 45 days to check whether the tribunal’s proposed fees comply with the rules under paragraph 1 of Article 40. If the appointing authority decides the proposal does not comply, it will adjust the fees, and the tribunal must accept those adjustments.[11]
When the tribunal later informs the parties of the actual fees and expenses it has decided on under Article 40, it must also explain how those amounts were calculated. After receiving the tribunal’s calculation, each party again has 15 days to request a review by the appointing authority. If there is no appointing authority, or it does not act in time, the review is done by the Secretary-General of the PCA. The appointing authority or PCA then verifies the tribunals’ fees. If necessary, they must adjust the fees within 45 days, and the tribunal must accept those adjustments. Any fee adjustments must be reflected in the tribunal’s award. If the award has already been issued, the tribunal must issue a correction to the award to implement the changes, following the correction procedure in Article 38(3).[12]
2. The Reasonable Travel and Other Expenses
Reasonable travel expenses and other expenses incurred by the arbitrators are covered by Article 40(2)(b). These expenses must have been incurred in connection with the arbitration.
3. The Reasonable Costs of Expert Advice and Other Assistance
Reasonable costs of expert advice and of other assistance required by the arbitral tribunal are also covered by Article 40(2)(c). These include tribunal-appointed experts,[14] rather than party-appointed experts.[15] The category of “other assistance required by the arbitral tribunal” may, inter alia, include the costs incurred with respect to interpreters, court reporters, and an administrative secretary.[16]
B. Articles 40(2)(d): The Reasonable Travel and Other Expenses of Witnesses
Reasonable travel and costs of witnesses, including party representatives and expert witnesses, to the extent such costs are approved by the arbitral tribunal, are covered by Article 40(2)(d). Party-appointed expert costs are not expressly listed as a separate category in Article 40. In certain cases, tribunals have alternatively characterised them as “other expenses incurred in relation to the arbitration proceedings” under Article 40(2)(e), where they consider this more appropriate.
Three conditions are required for these costs to be covered:[17]
- they must have been incurred in connection with the arbitration and therefore have been necessary;
- they must have been reasonable;
- they must have been approved by the arbitral tribunal.
The arbitral tribunal has discretion to approve these costs but must provide reasons for its decision. The arbitral tribunal may also decide that the costs incurred by a party in connection with a particular witness were unnecessary and hence are not recoverable.[18]
Expert evidence is frequently used in international arbitration. Experts are appointed by parties to give their independent opinion on issues beyond the arbitral tribunal’s expertise, such as quantum or foreign law, often in the form of expert reports and expert testimony at the hearing, thereby assisting the arbitral tribunal in its decision-making process. If such evidence is necessary, parties choose the expert they wish to appoint and initially pay for their fees (in addition to their expenses).
Generally, parties should budget between USD 50,000 and USD 500,000 for a competent expert per case (yes, there is tremendous cost variation). These fees vary depending on the expert’s specialisation, experience, and the scope of work, and should always be carefully negotiated in advance. The fees of a party-appointed expert cannot be linked to the outcome of the case in order to preserve the independence of the expert.
The prevailing view is that party-appointed expert fees are recoverable, provided they are both reasonable and necessary for the presentation of the party’s case. Tribunals routinely scrutinise the necessity, amount, and evidentiary substantiation of expert costs, and may adjust or cap them where required. Factors commonly considered include the complexity of the dispute, the relevance and quality of the expert evidence, and the proportionality of the costs claimed.
C. Article 40(2)(e): The Legal and Other Costs Incurred by the Parties
In addition to the above-mentioned costs, parties must also budget for the legal fees incurred for the work of counsel and their teams. These typically represent the largest portion of the overall costs, as an arbitration often requires more than 1,000 hours of work by a party’s legal team. Valuing transparency and predictability, Aceris Law offers reasonable, capped legal fees for representation in international arbitrations, ensuring that all clients benefit from clear and upfront cost expectations. To help parties predetermine expenses, Aceris Law has made available its online Arbitration Legal Fee Calculator, which allows parties to determine costs based on the amount in dispute. Alternatively, clients can opt for legal fees on a competitive hourly basis.
The UNCITRAL Rules also allow the parties to recover their reasonable legal and related costs, including fees for representation and assistance. Generally, these costs must be expressly claimed, unless the applicable law allows recovery without a specific request. Article 42 governs how such costs are allocated, and they qualify as “costs of the arbitration” only if the three conditions mentioned in the previous section are met.[19]
Although the provision does not mention internal costs (e.g., in-house counsel, accountants, or engineers), tribunals often accept them when they are proven. Indeed, as discussed in the Aceris Law note on “The Recovery of In-House Costs in UNCITRAL Arbitration”, in-house costs may be regarded as “other costs incurred by the parties” under Article 40 if they are reasonable, necessary, and substantiated. Some commentators argue that excluding internal costs may unfairly disadvantage parties that rely on internal resources and benefit those who outsource all work externally. As commentators further note, nothing in Article 40(2)(e) prevents tribunals from considering such internal costs.[20]
D. Article 40(2)(f): Fees and Expenses of the Appointing Authority
Article 40(2)(f) covers the fees and expenses of any appointing authority as well as those of the Secretary-General of the PCA. These fees and expenses typically vary based on the institution that is selected (ICC, PCA, or others).
E. Article 43: Deposit of Costs
Upon its constitution, the arbitral tribunal may request the parties to pay an advance on costs. The initial advance on costs is generally paid in equal shares between the parties.[21]
The tribunal’s request for an advance on costs is closely linked to how it will calculate its own fees and expenses. Although seeking an advance on costs is within the tribunal’s discretion, it benefits the parties to have the arbitration costs set as early as possible, as this enables them to assess the likely overall expenses of the proceedings.[22]
If the tribunal requests an advance on costs upon its establishment, it must base this request on an incomplete picture of the dispute and its value. Any such advance is inherently provisional and may later need to be increased under Article 43(2).[23]
The advance on costs is intended to cover the arbitrators’ fees (Art. 40(2)(a)) as well as their reasonable travel and other expenses (Art. 40(2)(b)) and the reasonable costs of any expert witnesses to assist the arbitrators (Art. 40(2)(c)). Because this requires estimating future expenses, the advance includes only costs likely to arise.[24]
The presiding arbitrator is generally responsible for setting up a dedicated bank account to hold the advance on costs in escrow during the arbitration, although the arbitrators may agree that another member of the tribunal will handle this task. Paying advances directly into each arbitrator’s personal account should occur only in exceptional situations and only with the parties’ explicit consent.[25]
Article 43(3) addresses the tribunal’s obligation to consult an appointing authority, if such an authority has been designated, regarding the amount of the advance on costs. Three conditions must be met:
- an appointing authority must either have been agreed upon by the parties or designated under Article 6(1)-(2);
- the appointing authority must be willing to assist the tribunal in setting the advance on costs;
- a party must request that the appointing authority review the tribunal’s determination of the advance amount.
Under paragraph 4, the advance on costs set by the tribunal must be paid within 30 days of receiving the request, and this deadline should be stated in the tribunal’s decision. If a party does not pay its share on time, the tribunal must ask the other party or parties to cover the shortfall. If they also fail to pay, the tribunal may suspend or terminate the arbitration. Before terminating the proceedings, the tribunal must follow Article 36(2) and notify the parties of its intention, which it may do in its second request for payment.[26]
Under the last paragraph, the arbitral tribunal must provide the parties with an accounting of the advance on costs. Any unused funds must be returned. If each party paid only for its own claims, the refund is made proportionally to their respective contributions. If one party paid the other’s share, the entire unexpended balance is returned solely to that paying party.[27]
F. Hearing Costs
Hearings are an integral part of most arbitrations, and parties must also plan for hearing-related expenses, although this represents only a small portion of overall UNCITRAL arbitration costs.
The factors that play a role in determining the hearing costs include:
- Whether the hearing is hosted virtually or in person;
- If it is in person, what venue will be reserved and during what period of the year;
- The length of the hearing;
- The number of people attending (tribunal, party representatives, legal teams, experts, witnesses, etc.);
- The cost of a court reporter (which may include travel and lodging);
- The cost of lunch and coffee breaks for the participants;
- Whether translation services will be required;
- The travel and hotel costs for the party, its legal team, and the arbitral tribunal;
- Other costs, such as printing costs or fees for electronic data-hosting services.
Further, if an arbitration case is bifurcated, the parties may have to fund two hearings – one on the preliminary issues and, if the arbitration proceeds, one final hearing on the merits of the dispute.
Typically, hearing costs are split equally between the parties, but they can then be recovered in the award.
G. Other Costs
Parties must also consider that other minor, discrete costs may arise throughout the arbitration process.
For example, arbitration often involves a document production phase, in which a party may request that the opposing party produce documents relevant to the case. In some cases, this may require a party to review a great number of documents to produce the specific category requested, which can take time and lead to the generation of additional expenses.
As another example, in some instances, tribunals may request that submissions be made both electronically and in hard-copy format or via flash drive. In these cases, parties must also pay for printing and/or the necessary equipment, as well as courier services, in order to fulfil the tribunal’s request.
Additionally, if documentary evidence referred to in the arbitration is in a language other than that of the arbitration or if witnesses speak different languages, parties should plan to spend additional funds on translations.
H. UNCITRAL Arbitration Costs of Investment Arbitrations
Investment arbitrations conducted under the UNCITRAL Rules tend to be costly, much like ICSID proceedings, and investment arbitration more generally.
Legal fees for counsel and their teams typically constitute the largest proportion of total costs. A fully contested UNCITRAL investment arbitration may require more than 3,000 hours of legal work, which contributes significantly to overall expenses. Expert evidence also materially increases the cost of proceedings.
Although investment arbitration is expensive, overall UNCITRAL arbitration costs can be substantially reduced through efficient case management, a well-organised legal team, and carefully planned procedural strategies. Aceris Law regularly helps clients achieve significant savings while maintaining the highest quality advocacy.
II. Allocation of the Arbitration Costs by the Arbitral Tribunal
Article 42(1) sets out the general rule for allocating UNCITRAL arbitration costs. Unless the parties agree otherwise, the default principle under the UNCITRAL Rules is that the unsuccessful party bears the costs of the proceedings (the “costs follow the event”). Parties are free to depart from this rule, for example, by agreeing that each will bear its own costs, and many jurisdictions recognise and permit such party autonomy.[28] If the parties have not agreed on a costs arrangement, the tribunal has discretion to apportion costs in a manner it considers reasonable in light of the circumstances.[29]
Under the “costs follow the event” or “loser pays” principle, the unsuccessful party is required to cover both the arbitration costs and the legal expenses of the successful party.[30] This principle may also be applied proportionally, with each party bearing costs according to the extent of its success or failure in the case. This is also known as the “relative success” rule. In such situations, a partial cost-shifting occurs, meaning the losing party pays a larger portion of the arbitration expenses and partially compensates the prevailing party for its legal costs.[31] The reasoning behind this principle is that a party wronged by an unlawful act should be reimbursed for the costs of pursuing its claim, while a party that successfully defends against an unfounded claim should be compensated for the expenses incurred in doing so.
Finally, the tribunal must specify in its final award, or in any other appropriate award, the exact amounts one party is ordered to pay the other as a result of the costs decision.[32] This requirement arises because, in practice, enforcement difficulties have occurred when awards failed to clearly state the amounts owed between the parties.[33]
Conclusion
UNCITRAL arbitrations can be expensive, whether commercial or investment, primarily due to legal fees, expert costs, and, in some cases, tribunal expenses. Parties should also be aware that, even after an UNCITRAL award is issued, additional expenses may arise if enforcement proceedings become necessary due to non-compliance by the losing party.
If you are considering commencing an UNCITRAL arbitration, whether commercial or investment, or if you are defending against such a claim and would like further information on potential UNCITRAL arbitration costs, please feel free to contact Aceris Law. With extensive experience representing clients in both commercial and investor-State UNCITRAL proceedings, as well as serving as arbitrators in major international disputes, we can provide clear guidance, strategic insights, and transparent cost estimates tailored to your matter.
[1] UNCITRAL, Homepage, https://uncitral.un.org/ (last accessed 26 November 2025).
[2] P.M. Patocchi and T. Niedermaier, Chapter XV, UNCITRAL Arbitration Rules – UNCITRAL Rules, in R. A. Schütze (ed.), Institutional Arbitration, Article-by-Article Commentary (2013), p. 1012.
[3] UNCITRAL, UNCITRAL Arbitration Rules, https://uncitral.un.org/en/texts/arbitration/contractualtexts/arbitration (last accessed 26 November 2025). The UNCITRAL Arbitration Rules were first adopted in 1976. Three other versions were then issued, with the latest being the 2021 rules, which are relied upon in the present note. Their purpose is to provide a comprehensive set of procedural rules for the conduct of arbitration proceedings. They are widely used in ad hoc arbitrations as well as administered arbitrations. The UNCITRAL Rules are not rooted in any particular legal tradition or national legal system. They are regarded as a set of arbitration rules suitable for use worldwide and have enjoyed broad acceptance for many years.
[4] P.M. Patocchi and T. Niedermaier, Chapter XV, UNCITRAL Arbitration Rules – UNCITRAL Rules, in R. A. Schütze (ed.), Institutional Arbitration, Article-by-Article Commentary (2013), p. 1016.
[5] Ibid., p. 1232.
[6] UNCITRAL Rules, Article 40(2):
“2. The term ‘costs’ includes only:
(a) The fees of the arbitral tribunal to be stated separately as to each arbitrator and to be fixed by the tribunal itself in accordance with article 41;
(b) The reasonable travel and other expenses incurred by the arbitrators;
(c) The reasonable costs of expert advice and of other assistance required by the arbitral tribunal;
(d) The reasonable travel and other expenses of witnesses to the extent such expenses are approved by the arbitral tribunal;
(e) The legal and other costs incurred by the parties in relation to the arbitration to the extent that the arbitral tribunal determines that the amount of such costs is reasonable;
(f) Any fees and expenses of the appointing authority as well as the fees and expenses of the Secretary-General of the PCA.”
[7] UNCITRAL Rules, Article 41(1).
[8] P.M. Patocchi and T. Niedermaier, Chapter XV, UNCITRAL Arbitration Rules – UNCITRAL Rules, in R. A. Schütze (ed.), Institutional Arbitration, Article-by-Article Commentary (2013), p. 1233.
[9] Ibid., p. 1233.
[10] UNCITRAL Rules, Article 41(2).
[11] UNCITRAL Rules, Article 41(4)(c).
[12] UNCITRAL Rules, Article 41(4)(b), (c) and (d).
[13] P.M. Patocchi and T. Niedermaier, Chapter XV, UNCITRAL Arbitration Rules – UNCITRAL Rules, in R. A. Schütze (ed.), Institutional Arbitration, Article-by-Article Commentary (2013), p. 1234.
[14] UNCITRAL Rules, Article 29.
[15] UNCITRAL Rules, Article 27(2).
[16] P.M. Patocchi and T. Niedermaier, Chapter XV, UNCITRAL Arbitration Rules – UNCITRAL Rules, in R. A. Schütze (ed.), Institutional Arbitration, Article-by-Article Commentary (2013), p. 1234.
[17] Ibid., p. 1234.
[18] Ibid., p. 1234.
[19] Ibid., p. 1235.
[20] Ibid., p. 1235.
[21] UNCITRAL Rules, Article 43(1).
[22] P.M. Patocchi and T. Niedermaier, Chapter XV, UNCITRAL Arbitration Rules – UNCITRAL Rules, in R. A. Schütze (ed.), Institutional Arbitration, Article-by-Article Commentary (2013), p. 1245.
[23] Ibid., p. 1245.
[24] Ibid., p. 1245.
[25] Ibid., p. 1246.
[26] Ibid., p. 1247.
[27] Ibid., p. 1248.
[28] Ibid., p. 1243.
[29] UNCITRAL Rules, Article 42(1).
[30] See, e.g., Olympic Entertainment Group AS v. Ukraine, PCA Case No. 2019-18, Award, 15 April 2021, paras. 189-196 (“In accordance with Article 40 of the UNCITRAL Rules, the Tribunal sees no reason why it should depart from the principle that costs follow the event. This rule is well established. The Tribunal nevertheless retains the discretion to assess a reasonable sum to be paid by the losing party and may take into account the conduct of the Parties and the amount awarded compared to the amount claimed. The amount claimed by the Claimant in these proceedings was EUR 12,404,000. The Claimant has been successful as to EUR 7,500,000. It is true that this is less than the sum claimed, but it is far from a trivial sum. The Tribunal has not been informed of any offer to settle this dispute for more than the sum awarded. It is not infrequent that tribunals award less than the sum claimed. Accordingly, the Tribunal does not think it appropriate to reduce the recoverable costs solely on the ground that the Claimant has received less than it claims. Its claim was always moderate and the assessment of damages in these cases is not an easy task. […] The Claimant complains that the Respondent has not paid its share of the deposits requested by the PCA. The Claimant has been forced to pay these amounts on behalf of the Respondent and hopes that it will recover these sums from the Respondent. Such sum is indeed included in the Award on costs. Taking everything into account, the Tribunal sees no reason why, in the exercise of its undoubted wide discretion as to costs, it should not order the Respondent to pay the Claimant’s costs (which will include the deposits paid to the PCA for itself and the Respondent) in the sum of EUR 2,750,000.”).
[31] See, e.g., Deutsche Telekom AG v. The Republic of India, PCA Case No. 2014-10, Final Award, 27 May 2020, paras. 352-353 (“The Tribunal starts with the outcome of the arbitration. The Claimant has prevailed on jurisdiction and liability. On quantum, it has partially prevailed as the damages awarded were less than what it claimed, and the two primary valuation methodologies which it had proposed were dismissed by the Tribunal. In assessing the outcome, however, it bears noting that the Claimant would not be made whole had it not resorted to arbitration, which could not be done without incurring costs whatever the amounts claimed and awarded. Thus, considering the outcome of the claims and ‘the circumstances of the case’ (Article 40 UNCITRAL Rules), the Tribunal determines that the cost allocation that most appropriately reflects the outcome of the proceedings is the following: 1. The Respondent shall bear the entirety of the costs of the proceedings (Tribunal and PCA fees and expenses); 2. The Respondent shall bear the Claimant’s legal fees and other expenses incurred for the jurisdiction and liability phase; 3. Each Party shall bear the legal fees and other expenses which it incurred in the quantum phase.”); see also Fynerdale Holdings BV v. The Czech Republic, PCA Case No. 2018-18, Award on Costs, 16 August 2021, paras. 36-38 (“It is evident that the Claimant has not succeeded with its case. It has not persuaded the Tribunal that the Tribunal has jurisdiction over the dispute between the Parties, and accordingly no decision by the Tribunal will be made on the substance of its claims. Moreover, the Respondent’s objection related to the legality of the Claimant’s investment was substantial and involved the consideration of documentary, witness and expert evidence. At the same time, the Tribunal is cognizant of the fact that the Respondent did not succeed with its ‘intra-EU’ objection. While that fact does not affect the outcome of the case, it cannot be said that the Claimant was the ‘unsuccessful party’ in every respect. A large proportion of the Parties’ pleadings as well as an amicus curiae submission from the European Commission related specifically to the ‘intra-EU’ objection. The Tribunal, for its part, dedicated a substantial part of its Award to that objection. The Tribunal thus concludes that it is appropriate for the Claimants to bear the greater part, but not all, of the costs of arbitration. Specifically, the Tribunal determines that apportionment in the following proportions is reasonable, taking into account the circumstances of the case: (a) As regards the Tribunal Costs pursuant to Articles 38(a) to (c) of the UNCITRAL Rules [current Article 40(2)(a) to (c)], the Claimant will bear two thirds and the Respondent will bear one third of these costs; (b) As regards the Costs of Legal Representation pursuant to Article 38(e) of the UNCITRAL Rules [current Article 40(2)(e)], the Claimant will bear its own costs; the Respondent will bear one half of its own costs and will be entitled to recover one half of its costs22 from the Claimant.”).
[32] UNCITRAL Rules, Article 42(2).
[33] P.M. Patocchi and T. Niedermaier, Chapter XV, UNCITRAL Arbitration Rules – UNCITRAL Rules, in R. A. Schütze (ed.), Institutional Arbitration, Article-by-Article Commentary (2013), p. 1244.