[2025] EWCA Civ 998

The arbitral tribunal ordered CZR to pay 70% of Diag SE’s and Mr Stava’s legal costs of the arbitration, and assessed those costs in the sums of US$427,135.70, GBP739,205.77, CZK850,688.30, EUR165,700.21 and CHF18,225.65. It ordered also that CZR should reimburse Diag SE and Mr Stava 70% of their share of the arbitration costs, i.e. EUR378,442.86.

Mr Bastin submitted that this costs award might have been very different if the tribunal had appreciated that the claims by Diag SE failed in their entirety for lack of jurisdiction.

I would accept that it is possible that the tribunal might have made a different award of costs in these circumstances. As the award of costs is a matter of discretion, and that discretion needs to be exercised in the light of a full understanding of the issues in the arbitration and the conduct of the parties, I would have been minded to remit the issue of costs alone to the tribunal for reconsideration in the light of our judgment. But the resignation of the tribunal makes that course pointless. A new tribunal could not possibly put itself fully into the minds of the former tribunal members in order to reconsider the former tribunal’s exercise of discretion. For that matter, nor can this court. But we are in as good a position to do so as any new tribunal would be, and to constitute a new tribunal would take months and cause substantial further expense. That would be wholly disproportionate given the amount of costs at stake which, although substantial, is a modest sum when compared with the amount of the award. I consider, therefore, that we must do the best we can.

I would order that CZR should pay 70% of Mr Stava’s legal costs of the arbitration and should reimburse him 70% of his share of the arbitration costs. I would leave the figures awarded by the tribunal undisturbed. Although some of these costs will be attributable to the claim by Diag SE, in practice Mr Stava was Diag SE’s source of funding and it would be very difficult to disentangle costs properly attributable to Diag SE’s claim from those attributable to Mr Stava’s claim.

I recognise that there is an element of rough justice in this decision, but it arises as a result of the tribunal’s resignation which was deliberately procured by CZR in the knowledge that this court would have to consider remission of the award and that the need to constitute a new tribunal would inevitably cause substantial difficulty. Overall, therefore, I consider that this is a fair result as a matter of discretion.