The conundrum of costs allocation in international investment arbitrations: a proposed practical solution to enhance predictability of costs decisions

Abstract This paper analyses how international investment tribunals constituted under the ICSID and UNCITRAL Arbitration Rules addressed the matter of costs allocation. After a review and classification of some of the most relevant decisions of the last decades on the topic, the paper concludes that costs decision in investment arbitration are extremely erratic and unpredictable still today, with negative consequences for the parties’ interests that should not be underestimated. For this reason, the paper puts forward a new practical approach which might be adopted by arbitral tribunals in investment cases, and that—while ensuring full compliance with the applicable arbitration rules—would enhance predictability and lead to more rational and ‘just’ costs decisions.