SECURITY FOR COSTS according to the ICC 2021 Arbitration Rules and the UAE Federal Law no. 6 / 2018 (Arbitration Law)


Under Article 28 of the ICC Arbitration Rules as applicable to the present Case, an arbitral tribunal has the authority to grant “any interim or conservatory measure it deems appropriate”.

Although said article does not give a precise definition of “interim measure” or “conservatory measures”, it is clear and it is also stated in the Secretariat’s Guide to ICC Arbitration that a security for costs is one of the different types of measures that, according to the ICC Rules, the Arbitral Tribunal has the power to grant.

The same conclusion is reached even when the power of this Arbitral Tribunal to order security for costs is verified under the national law regulating the procedure. The granting of such order is generally considered to be a matter of procedure and therefore falls under the law governing the arbitration procedure, that is the law of the place of the arbitration (lex arbitri)[1].

In the case at issue the lex arbitri is undisputedly the United Arab Emirates law as stated in the Arbitration Agreements in the contracts.

The discipline of arbitration in the UAE is represented by the Federal Law No. 6/2018 on Arbitration. In relation to the possibility to grant interim measures, Article 21 is the provision to be taken into consideration. It provides that upon request of a party, or on the arbitral tribunal’s own initiative, arbitrators have the power to “order either one to take interim or precautionary measures as it may deem necessary and as required by the nature of the dispute”.

So, as of now, it is undisputed that in the present ICC Case, the Arbitral Tribunal has the power to order security for costs by way of an interim measure under Article 28 of the ICC Arbitration Rules, as well as by virtue of Article 21 of the UAE Federal Law No. 6/2018 on Arbitration, which is the lex arbitri.

In addition, Article 28 of the ICC Rules “does not set out any prerequisites that must be met for conservatory or interim measures to be granted[2], nor the Rules contain any guidelines on how such requirements should be determined, nor they define a specific procedure for requesting security or any other interim measures.

However, publicly available awards, procedural orders, and other sources also tribunals often rely on – for instance The Secretariat’s Guide to ICC Arbitration as well as The International Arbitration Practice Guideline, Applications for Security for Costs of the Chartered Institute of Arbitrators– may assist the tribunal when deciding on the possibility to grant interim measures and therefore security for costs.

The 2016 Guidelines issued by the Chartered Institute of Arbitrators in relation to security for costs applications suggest that tribunals should take into account:

  1. The prospects of success of the claims and defense.
  2. the claimant’s ability to satisfy a future adverse cost award and the availability of the claimant’s assets; and
  3. whether it is fair in the circumstances to make the order.

As it will be shown below, each of the above considerations favore an order for security for costs.

The fairness to grant security for costs in the present circumstances.

When determining whether to make an order on security for costs, an Arbitral Tribunal should also take into account the fairness to require one party to provide security for costs in light of all the circumstances, as suggested by Articles 1 and 4 of the International Arbitration Practice Guideline, Applications for Security for Costs of the Chartered Institute of Arbitrators.

With the request of security for costs, the applicants  aim at protecting their right of defense against a claim which won’t be voluntarily enforced at the end of the proceedings for lack of funds. Therefore, it would be procedurally unfair to force the applicants to defend themselves incurring costs which eventually could not be recoverable and thus expose them to the risk of substantial damage.

So, the applicants believe that the considerations of fairness that the Arbitral Tribunal will make, will eventually require the respected Arbitrators to grant the requested security for costs.

While conducting the fairness assessment the Tribunal may consider the following elements: the conduct of the applying party and proportionality of the measures.

Quoting the CIArb Guidelines, the Tribunal “should consider the conduct of the party applying for security both before and during the course of the arbitration to date and all of the surrounding circumstances in order to determine whether it would be fair to require security[3].

It is undisputed that since the beginning of the arbitration, all the applicants have facilitated the conduct of the proceedings, complying with all the requests submitted and communicating in a clear, organized manner. The applicant Parties have also always fully respected its payment obligations laid down in the Agreements – despite what the opposing Parties allege.

Formal security sought by the applicant.

To be made by way of deposit or through a bank guarantee.


[1] J. FRY, S. GREENBERG, F. MAZZA, The Secretariat’s Guide to ICC Arbitration, A Practical Commentary on the 2012 ICC Rules of Arbitration from the Secretariat of the ICC International Court of Arbitration, International Chamber of Commerce, 2012, p.290).

[2] ICC-PO3-2020-227, ICC Dispute Resolution Bulletin, Procedural Order 3, at. §8 (2014).

[3] Chartered Institute of Arbitrators, International Arbitration Practice Guideline, Applications for Security for Costs (2016), p. 10.