the costs associated with running the arbitration, including expert costs, witness costs and the like. However, legal costs will not include costs incurred in respect of employees of a party giving instructions or the financing of litigation. The jurisdiction of arbitrators to award costs can be derived from the legislation (e.g. Section 33B) or can be extended by agreement. The arbitration agreement may include the arbitral rules of an institution. If so, those rules form part of the agreement and have the capacity to extend the jurisdiction of an arbitrator. For example, Rule 44 of the ACICA Rules3 provides as follows: "The Arbitral Tribunal shall fix the costs of arbitration in its award. The term "costs of arbitration" includes only: a. the fees of the Arbitral Tribunal, to be stated separately as to each arbitrator, and to be fixed in accordance with Article 45; b. the travel (business class airfares) and other reasonable expenses incurred by the arbitrators; c. the costs of expert advice and of other assistance required by the Arbitral Tribunal; d. the travel (business class airfares) and other reasonable expenses of witnesses to the extent such expenses are approved by the Arbitral Tribunal; e. the legal and other costs, such as the costs of in-house counsel, directly incurred by the successful party in conducting the arbitration, if such costs were claimed during the arbitral proceedings, and only to the extent that the Arbitral Tribunal determines that the amount of such costs is reasonable; f. ACICA's administration fee;
g. fees for facilities and assistance provided by ACICA in accordance with Articles 9 and 47.4; h. ACICA's registration fee; and i. the costs associated with any request for emergency interim measures of protection made pursuant to Article 33.1(a)." Rule 44(e) uses the same expression 'other costs' which the English High Court considered in the context of Section 59 of the Arbitration Act 1996 (UK). It is therefore arguable that the ACICA Rules are wide enough to allow a party to recover the costs of litigation funding. However, the language of Rule 44 of the ACICA Rules is different. Time will tell whether the general words 'other costs' should be constrained by the surrounding words, in particular the words 'such as the costs of in-house counsel'. Those words provide an example, which suggests a narrower ambit for the expression 'other costs'. In any event, where the ACICA Rules apply, respondents arbitrating in Australia should not be alarmed. Even if 'other costs' are given a wide meaning, an arbitrator's discretion to include in "other costs" the costs of litigation funding will not be exercised in the case of all successful claimants who are funded by litigation funders. In Essar Oilfields Services Limited v Norscot Rig Management Pvt Limited, the arbitrator exercised his discretion because of the respondent's egregious conduct (as described above) which "forced" Norscot into litigation funding and because the funding arrangement in question reflected standard market rates. The authors submit that a similar factual scenario would be required. Finally, we note that the potential consequences of this case is one reason why litigation funding arrangements should be disclosed by a claimant at the outset of an arbitration (other reasons being potential conflicts of interest and applications for security for costs).