Who is to bear the costs of an arbitration is a question as relevant as the corresponding question in civil litigation. Commentaries which advance the merit of arbitration as a mode of resolving commercial disputes invariably itemise the lower costs of the arbitral process. As with most generalities the assertion has an element of truth: it is nonetheless an argument presented with excessive confidence and misrepresents as actively as it informs. The increasing truth is that in many instances arbitration may be as costly, if not more so, than civil litigation. The economics of arbitration is a function not only of the innate characteristics of the arbitral forum and process, but also of the nature of the subject matter of the dispute and of the spirit with which the parties and their representatives come to the arbitral process. In the result, arbitral costs may frequently be substantial, even phenomenal, and rarely a matter of indifference.1

Subject to the express terms of an arbitration agreement an arbitrator is obliged to dispose of the question of costs.2 The jurisdiction in its customary form is discretionary in character and any order made forms a part of the arbitral award.3 A typical award will therefore be composed of two fragments; a substantive part and that which deals with costs. East part is subject to judicial review and with the conceptual basis of the court’s jurisdiction the same in each case. Just as the substantive part may be set aside or remitted to the arbitrator, so equally may be the part which deals with costs.4

With regard to the question of costs there exists a close analogy between the arbitral and judicial processes. Both arbitrator and Judge enjoy a discretion in the matter and an arbitrator is required to approach the question of costs in much the same manner as a Judge would adopt.5 In reviewing an arbitral decision as to costs the position and perspective of the High Court is similar to that adopted by