Ad hoc arbitration fees and expenses
To ensure that the cost of the arbitration is proportionate to the amount in dispute, the arbitrator’s fees are capped based on the amount in dispute.
For the purpose of calculating the amount in dispute, the GST inclusive value of all claims, counterclaims, and affirmative defences in New Zealand dollars must be added together.
Interest will not be taken into account unless the interest claimed by a Party exceeds the aggregate principal amount, in which case the amount in dispute will be calculated on the value of the interest claim alone.
All sums stated are in New Zealand dollars and are inclusive of GST (if any).
PRELIMINARY PAYMENT | Security for arbitral tribunal’s fees and expenses
The arbitral tribunal’s appointment under the agreement for ad hoc arbitration is conditional upon the Parties:
- executing the arbitration agreement; and
- paying into the trust account of NZDRC, the prescribed security for the arbitral tribunal’s fees and expenses in accordance with the following schedule.
|Amount in dispute||Security Amount||Security Amount|
|1 Arbitrator||3 Arbitrators|
|$250,000.00 ≤ $499,999.99||$30,000.00||$65,000.00|
|$500,000.00 ≤ $999,999.99||$35,000.00||$75,000.00|
|$1,000,000.00 ≤ $2,499,999.99||$40,000.00||$85,000.00|
|$2,500,000.00 ≤ $4,999,999.99||$45,000.00||$100,000.00|
|$5,000,000.00 ≤ $9,999,999.99||$50,000.00||$115,000.00|
|$10,000,000.00 ≤ $49,999,999.99||$55,000.00||$125,000.00|
|$50,000,000.00 ≤ $99,999,999.99||$60,000.00||$140,000.00|
|Declaratory relief only||$30,000.00||$65,000.00|
ARBITRAL TRIBUNAL’S FEES AND EXPENSES
An arbitrator is entitled to fix a fee to be paid by the Parties that is reasonable having regard to the work done by the arbitrator, and which fee may not, except in exceptional circumstances, exceed the maximum amount in the following schedule (Scheduled Maximum Fee):
|Amount in Dispute||Scheduled Maximum Fee|
|$250,000.00 ≤ $499,999.99||$75,000.00|
|$500,000.00 ≤ $999,999.99||$85,000.00|
|$1,000,000.00 ≤ $2,499,999.99||$100,000.00|
|$2,500,000.00 ≤ $4,999,999.99||$125,000.00|
|$5,000,000.00 ≤ $9,999,999.99||$150,000.00|
|$10,000,000.00 ≤ $49,999,999.99||$200,000.00|
|$50,000,000.00 ≤ $99,999,999.99||$300,000.00|
|Declaratory relief only||$75,000.00|
In exceptional circumstances, including, but not limited to, matters involving complex technical and/or legal issues, large numbers of issues in dispute, large volumes of documents, applications for amendments to the arbitration timetable or pleadings, and applications for interim relief, joinder and/or consolidation, the arbitral tribunal may claim an additional amount over and above the Scheduled Maximum Fee (Additional Fee).
For the purpose of supporting a claim for an Additional Fee, an arbitrator’s hourly rate may not exceed an all-inclusive hourly rate of $850.00 for time engaged on the duties of the matters in respect of which the Additional fee is claimed.
In the event of any dispute arising in relation to any Additional Fee claimed by the arbitral tribunal, NZDRC will determine any Additional Fee that the arbitral tribunal is entitled to be paid after allowing every Party an opportunity to respond. If a Party wishes to exercise that right, that Party must within seven calendar days of receipt of notice of the Additional Fee, communicate its response to the arbitral tribunal and NZDRC.
Supplementary advances and interim payments
During the course of the arbitration, the arbitral tribunal may from time to time request one or several further supplementary, interim, and/or final advances and deposits from the Parties towards the fees and expenses of the arbitration, incurred or to be incurred on behalf of, or for the benefit of the Parties. All such advances are to be paid into the trust account of NZDRC on demand.
The Registrar may, from time to time on instruction of the arbitral tribunal, apply the advances and deposits paid by the Parties as security towards interim payments to the arbitral tribunal and render an updated statement of accounting to the Parties.
Any interest which may accrue on such deposits will be retained by NZDRC as its own property.
WHEN IS PAYMENT REQUIRED?
The Preliminary Payment must be made to NZDRC either before or immediately after submission of the Application for Arbitration.
The arbitral tribunal may from time to time request one or more Supplementary Payments from the Parties towards the fees and expenses of the arbitration, incurred or to be incurred on behalf of, or for the benefit of the Parties.
The Parties must pay all Supplementary Payments within seven calendar days of receipt of request by NZDRC for such additional fees and expenses.
If any required deposit or advance is not paid in full within seven calendar days after receipt of the request, the Registrar will so inform the Parties in order that one or another of them may make the required payment. If payment is not made within a further seven calendar days, the arbitral tribunal may order the suspension or termination of the arbitration.
If the fees and expenses of the arbitration are less than the amount held by NZDRC as security, NZDRC will provide the arbitral tribunal’s award to the Parties as soon as practicable after the arbitral tribunal has made its award.
In the event that the fees and expenses of the arbitration are greater than the amount held as security, the Parties will be advised as soon as practicable by NZDRC of the arbitral tribunal’s actual fees and expenses, and the Parties will be requested to pay the balance in order to uplift the award. When the balance is paid in full, a copy of the award will be provided to each of the Parties by NZDRC.
As soon as practicable after the final award has been provided to the Parties, NZDRC will render a final statement of accounting to the Parties of deposits and advances received and payments made to the arbitral tribunal, and NZDRC will reimburse any unexpended balance of the security amount to the Parties in the manner determined by the arbitral tribunal.
LIABILITY FOR PAYMENT
The Parties are free to make any arrangements as between them for payment of the arbitral tribunal’s fees and expenses.
However, and notwithstanding any agreement as between the Parties, the Parties shall be jointly and severally liable to pay the arbitral tribunal’s fees and expenses, whether the arbitration is abandoned, suspended, withdrawn, or concluded by agreement or otherwise before the arbitral tribunal makes an award fixing the costs and expenses of the arbitration, together with any additional costs incurred by the arbitral tribunal in recovering any overdue monies on a full indemnity basis.
METHODS OF PAYMENT
Payment of all fees and expenses may be made by direct credit, bank transfer, or by credit card (Visa and MasterCard only). A merchant transaction fee of 2.95% is payable in addition to the required fee for all credit card payments.
All fees, expenses, and costs related to the arbitration will be invoiced in New Zealand dollars, but may be paid in other convertible currencies at rates prevailing at the time of payment, provided that any transfer and/or currency exchange charges must be borne by the payer.
SETTLEMENT OR WITHDRAWAL
In the event that the dispute is settled or the arbitration agreement is withdrawn by the Parties before a partial award is made that determines all of the matters at issue, the arbitral tribunal’s fees and expenses incurred prior to that date, including any entitlement to cancellation fees will be deducted from the amount paid as security by the Parties for the costs of the arbitration.
The balance of the security monies will be refunded to the Parties in the proportions in which the security amount was paid, unless the Parties agree otherwise and instruct the arbitral tribunal and NZDRC accordingly in writing within seven calendar days of notice of settlement or withdrawal of the arbitration agreement.
In the event that the arbitral tribunal’s fees and expenses are greater than the amount held as security, the Parties must pay the balance within seven calendar days of receipt of notification by NZDRC of such additional fees and expenses.
In any case where a Party notifies the arbitral tribunal in writing that a scheduled conference, inspection, or hearing date is to be vacated, whether or not the dispute between the Parties has been settled, or the conference, inspection, or hearing is adjourned by agreement, or the application for arbitration is withdrawn or terminated by the Parties for any reason whatsoever, and the notice is received by the arbitral tribunal between 14 and 8 calendar days from and including the date of the scheduled conference, inspection, or hearing, the arbitral tribunal may charge a fee in the amount of 50% of the arbitral tribunal’s daily charges for the entire period of time set aside for attendances on the same (Cancellation Fee).
If such notice is received 7 calendar days or less from and including the date of the scheduled conference, inspection, or hearing, the arbitral tribunal may charge a Cancellation Fee in the amount of 75% of the arbitral tribunal’s daily charges for the entire period of time set aside for attendances on the same.
For the purpose of calculating Cancellation Fees, an arbitrator’s daily charges may not exceed six hours at an all-inclusive hourly rate of $850.00.