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CS Professional · Arbitration, Mediation and Conciliation · Preparation and Execution of Arbitral Award

In an arbitration between Mehta Pharma and Rao Logistics, Mehta Pharma succeeds on two of three claims, and Rao Logistics had refused a reasonable settlement offer made earlier by Mehta Pharma. The tribunal decides to make a costs order. Which approach is consistent with section 31A?

The tribunal may order the unsuccessful party to pay costs, as the general rule, but must weigh all circumstances, including conduct, partial success and a reasonable settlement offer that was refused. It is not bound to order full costs or no costs.

  1. AThe tribunal must order each side to bear its own costs because success was partial
  2. BThe tribunal may order the unsuccessful party to pay costs, having regard to all circumstances including partial success and the refused reasonable offerCorrect
  3. CThe tribunal cannot consider the settlement offer because it is confidential
  4. DThe tribunal must award the entire costs to Mehta Pharma regardless of conduct

Explanation

Section 31A(2) states the general rule that the unsuccessful party pays the successful party's costs, but section 31A(3) requires regard to all circumstances, including partial success and whether a reasonable offer to settle was made and refused. No rule forces equal bearing or full costs.

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