Essar applied under section 68(2)(b) of the Arbitration Act to set aside the arbitrator's award on the ground of a "serious irregularity", specifically "the tribunal exceeding its powers". Section 68(2)(b) has application only where an arbitrator has purported to exercise a power which he or she does not have. It does not apply where a tribunal erroneously exercised, or fell into error in the application of, a power that it did have. (Lesotho v Impregilo [2006] 1 AC 221.) Upholding Decision The Court said the arbitrator clearly had the power to award costs. If the arbitrator fell into error, it was an error as to the scope of such costs, and therefore there was no serious irregularity within the meaning of s68(2)(b). Notwithstanding, the Court went on to consider the construction issue (i.e. whether the expression "other costs" include the costs of obtaining litigation funding) and agreed with the arbitrator's finding. Sections 63(3) and 61(1) allow the arbitrator to determine the recoverable costs of the arbitration as he sees fit. Section 59(1)(c) then deliberately includes a head of costs, other than legal costs. The Court concluded that, "as a matter of language, context and logic", "other costs" can include the costs of obtaining litigation funding. The Court reasoned that the costs relate to the arbitration and are for the purpose of it as the costs have been incurred in order to bring the claim. It is, of course, a matter of the arbitrator's discretion whether to award it. In exercising his discretion to permit recovery of litigation funding, the arbitrator's findings as to the respondent's conduct was critical. The arbitrator said that Essar had set out to cripple Norscot financially by resolutely refusing to make certain payments. The arbitrator found that as a consequence of Essar's conduct "Norscot had no alternative, but was forced to enter into the litigation funding". The arbitrator found that "Essar was undoubtedly aware that Norscot's costs could not be financed from its own resources...and it was forced into 'litigation funding'..." The arbitrator concluded that Norscot's impecuniosity was deliberately caused, or substantially contributed to, by Essar. In addition, the arbitrator considered the funding costs (i.e. 300% of the sum advanced or 35% of the sum recovered) reflected standard market rates and terms for such a facility. An Australian Position Section 33B(1) of the Australian model Commercial Arbitration Act provides: "Unless otherwise agreed by the parties, the costs of an arbitration (including the fees and expenses of the arbitrator or arbitrators) are to be in the discretion of the arbitral tribunal". The relevant phrase is "the costs of an arbitration". It is not defined (unlike the English equivalent) and it is not given any context by other provisions of the Act. In Minister for Home and Territories v Teesdale-Smith (1924) 35 CLR 120, the High Court stated "the costs of an arbitration [include] the costs of every step necessary from the essential preliminaries to the final determination" and include costs incidental to the arbitration. Notwithstanding this case, Section 33B is unlikely to be read widely, to empower an arbitrator to award costs which are not legal costs. Such legal costs will include