ERDEM-NEWSLETTER-2018-metin

168 NEWSLETTER 2018 Apportionment of Costs Another outcome-based approach that allocates costs in line with the award is the Apportionment of Costs / Proportional Allocation method. According to this method, the parties bear the costs in line with the actual success they have gained on the merits. According to the Survey, the arbitral tribunals applied the Ap- portionment of Costs method in 30% of the arbitrations reviewed; hence, it rose to the level of the second-favored cost allocation method amongst the three. By taking into consideration the relative success of the parties, this method is claimed to provide more equitable results. Since it is not always possible to detect “the actual winner” at the end of the arbitration, proportional allocation enables the tribunal to rule for par- ties to bear the costs on each individual claim or defense raised. It is emphasized that it is not equitable to count a claimant who failed on a complex, lengthily argued dispute, or a defendant who successfully dismissed the majority of a claim, to be noted as the “loser.” 8 The followers of this approach underline that in the event that the monetary results do not reflect the actual balance of the merits, the Ap - portionment of Costs appears to be more practical 9 . To the contrary, this method is criticized where it is applied with a strict mathematical approach, as it fails the fairness test in cases where the parties claim unreasonable legal costs with significant discrepancy 10 . American Rule The last approach towards the allocation of costs is the American Rule , which prescribes equal share as to the procedural costs, while 8 Kreindler, Richard H. : “ Final Rulings on Costs: Loser Pays All? ”, ASA Spe- cial Series, No. 26, p.11, www.transnational-dispute-management.com/article. asp?key=1505 (Access date: January 2018). 9 Smit, Robert H.; Robinson, Tyler B. : “ Cost Awards in International Commer - cial Arbitration: Proposed Guidelines for Promoting Time and Cost Efficiency ”, The American Review of International Arbitration V. 20, No. 3 (2010): 267–283; Flecke-Giammarco , p. 413. 10 Koch , p. 493.