The Arbitration Rules and the Rules for Expedited Arbitration of the Finland Chamber of Commerce entered into force on 1 June 2013. Appendix II to the Rules contains Tables A and B regarding the determination of the FAI Administrative Fee and the arbitrators’ fees.
One of the main objectives of the 2013 FAI Rules revision process was to make arbitration more cost-efficient. To achieve this goal, the provisions governing the determination of the costs of the arbitration were fully revised. One of the key amendments was to grant the Board the sole power to determine the costs of the arbitration, thereby deciding exclusively also on the fees payable to the arbitrators.
The Arbitration Institute determines the FAI Administrative Fee in accordance with Table A. The fees of a sole or presiding arbitrator are determined, for their part, in accordance with Table B. The Institute may deviate from the fee amounts stated in Table B only in exceptional circumstances. When fixing the arbitrator’s fee, in addition to the monetary value of the dispute, the Institute shall consider the complexity of the case, the time spent on it, and the diligence and efficiency shown by the arbitrator. As a starting point, the arbitrator’s fee is fixed at the median amount calculated in accordance with the value of the dispute, unless there are particular reasons to deviate from this rule.
Four years have now passed since the entry into force of the FAI Rules. In the meantime, the FAI practice has shown that, occasionally, the arbitrators’ fees remained unreasonably low in proportion to the amount of work they had put into the case. This conclusion is also supported by the FAI statistics. In 2016, the arbitrators’ fees comprised merely 10.7% of the total costs of the arbitration, whereas the share of the FAI Administrative Fee was only 2.4% but the share of the parties’ legal costs as high as 86.9%. By way of comparison, in 2015, the arbitrators’ fees accounted for 16.7% of the total costs of the arbitration; and in 2014, that figure was 14.3%.
The FAI endeavours to meet both the arbitrators’ and the parties’ justified expectations with regard to a reasonable level of fees and costs. Taking also into account that other leading arbitration institutions have recently amended their schedules of fees and costs, the Finland Chamber of Commerce, too, has found it necessary to update the fee tables applicable in FAI arbitration proceedings. Accordingly, in arbitrations pursuant to the FAI Rules, the arbitrators’ fees will be increased to some extent, whereas the FAI Administrative Fee will be raised only moderately. Further, in arbitrations pursuant to the FAI Expedited Rules, the arbitrators’ fees will be increased quite considerably, but the FAI Administrative Fee will remain virtually unaltered.
The revised Tables A and B enter into force on 1 June 2017. They replace the prior Tables, effective as of 1 June 2013, in respect of all arbitrations commenced on or after 1 June 2017, irrespective of the version of the Rules applying to such arbitrations.