International Arbitration Update No. 9 The Use of Sealed Offers in International Arbitration
In the present economic climate, aggrieved parties considering whether to pursue a claim through international arbitration are acutely aware of the associated costs. This concern is particularly pertinent when taking into account the proportionality of the costs of an arbitration in comparison to the claim amount, and the fact that tribunals increasingly allow for “costs to follow the event”, i.e. a losing party in an arbitration will often be required to pay the winning party’s legal fees and costs of the arbitration.
Coupled with parties’ concerns pertaining to cost is the increasing tendency for arbitral institutions and tribunals to acknowledge their roles in ensuring that proceedings are conducted efficiently.
In this client alert, we explore the concept of sealed offers, a commonly-used mechanism in England & Wales and numerous other common law jurisdictions, and consider how this tool may be used in an international arbitration to reach an effective and economical conclusion to a dispute.