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Introduction
Decision
Comment
Introduction
In RCBC Capital Corporation v Banco de Oro Unibank Inc (GR 196171,
December 10 2012) the respondent refused to pay its share of the
advance on arbitration costs, as fixed by the International Chamber of
Commerce (ICC) International Court of Arbitration. The respondent claimed
that the amount of the claim was substantially higher more than 40 times
than the total amount of the counterclaims. The court instructed the
arbitration tribunal to suspend its work unless the parties paid the balance
of the advance within 15 days. In view of the respondent's ongoing refusal
to pay its share, the claimant was compelled to pay all advance costs and
sought to declare the respondent in default, with no right to participate in
the proceedings.
Decision
In a letter to the parties, the chairman wrote that the tribunal had no power
under ICC rules to order the respondent to pay the advance costs sought
by the ICC or to give the claimant relief. It may have been possible for the
claimant, in the course of the arbitral hearing, to make submissions based
on the failure of the respondent to pay its share. Relief, if any, would need
to be determined by the tribunal after hearing submissions from the
respondent.
The majority of the tribunal rendered a first partial award, which reserved a
resolution on costs to a further or final award.
In another letter, the claimant reiterated its plea that the respondent be
declared in default and the counterclaims deemed withdrawn. In response,
the chairman ruled that the tribunal had no jurisdiction to declare that the
respondent had no right to participate in the proceedings. Article 36(4) of
the ICC rules applies only to counterclaims. The tribunal interpreted the
claimant's letter as an application to the tribunal for the issuance of a
partial award against the respondent in respect of its failure to pay. The
claimant confirmed the tribunal's interpretation.
In the ensuing hearing, the chairman advised the parties as follows:
"1. The Tribunal acknowledges the Respondent's response to the
Claimant's application for a Partial Award, based on the Respondent's
failure to pay its share of the costs, as requested by the ICC.
2. The Tribunal notes that neither party has referred to an article by
Mat[t]hew Secomb on this very subject which appears in the ICC
Bulletin Vol. 14 No.1 (Spring 2003). To assist both sides and to
ensure that the Tribunal does not consider material on which the
parties have not been given an opportunity to address, I attach a