Is It Possible to Recover Lawyer’s Fees in Arbitrations?

The very rule of claiming legal costs from the losing party is one of the most prominent differentiating factor between litigation and arbitration. Arbitration Lawyers of Dubai are glad to inform you that this article is certainly not about the differentiation between litigation and arbitration and will strictly stick to the possibility of claiming lawyer’s fee in arbitration and how it has been possible in past few cases.

Claiming legal or statutory costs is a key advantage of any arbitration process, especially in cases where the alternate legal procedure does not allow the winning party to claim full cost of the proceedings incurred by the claimant or defendant as the case maybe. The courts of UAE although allows the claimant (upon receiving a favourable judgment) to claim the court fees from the other party along with a very nominal amount of legal or lawyer’s fees which hardly covers the expense of the party. It is certainly discouraging for parties involved in petty claims where legal fees can be a triggering concern to not take up the matter to court. In such circumstances, the presence of an arbitration agreement between the parties may soothe the situation.

It is pertinent to understand for all our readers that claiming lawyer’s fees in an arbitration is mostly dependent on the wording of the arbitration agreement and the laws of the relevant arbitration institute. The country’s welcoming change is the recent practice amongst commercial parties to allow the arbitration tribunal to award legal costs to the wining party either specifying in the terms of reference or through a specific provision in the arbitration agreement. Nevertheless, the authority of the tribunal to grant legal costs to winning party can be a tough task to accomplish and certainly requires assistance of Top Lawyers of Dubai.

UAE is becoming a hub for most international arbitrations concerning the establishment of most international arbitration institutes with their own specific rules and regulations. Some laws of international arbitration institutes authorizes the tribunal to award legal or lawyer’s fees to the winning party, even though there is no parallel provision for the same in the local arbitration law. For instance the rules of Dubai International Financial Centre- London Court of International Arbitration (DIFC-LCIA) allows the tribunal to award legal or counsel fees to the winning party incurred in presenting the arbitration before the relevant authority.

On the other hand, Dubai International Arbitration Centre has different understanding towards rewarding lawyer’s fees. Article 4.2 of the Appendix to the DIAC Rules grants councils to fix the expenses of the arbitration and to allot them between the parties to the arbitration. Nevertheless, the expenses for an arbitration are defined under Article 2.1 of Appendix to DIAC arbitration rules which does include the arbitration fees yet fails to include the legal counsellor’s fees. Therefore, the power of arbitration tribunals to grant legal counsellor’s fees always remain a concern which is often viewed by courts of UAE. In reference to the new Arbitration Law, it although allows the tribunal to determine the arbitration expenses yet fails to explicitly mention the expenses for lawyer incurred by the parties. This issue is further left to the practitioners or the court to determine and interpret the wordings of the law. Considering the lack of an unambiguous provision for granting legal fees, it is recommended to appoint Best Lawyers in Dubai to ensure favourable arbitration outcome.

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