Overreaction Or Creation Of Awareness: Major Challenge On Decisions On Security For Costs

An ICSID Tribunal ordered RSM, an investor company from United States which admitted that it had received funding from a third party, to post a guarantee of US$750,000 to ensure that it could pay Respondent Saint Lucia's legal costs if it was ordered to do so at the end of the arbitration proceedings. The same tribunal had previously obligated RSM in the same proceedings to pay all of the advances towards the administrative costs of the arbitration which is traditionally split evenly between the two parties.

This provisional award also received significant attention given its potential impact on ongoing investor-state claims that are being supported by third party funders. From a state's perspective, this award clearly illustrates the tribunals' concern that a claimant may not comply with a costs award rendered against it, since, in the absence of security or guarantees being offered, it is doubtful whether the third party will assume responsibility for honoring such