How to appeal arbitration costs award for procedural error?

Procedural irregularity grounds for appeal

An appeal against an arbitration costs award often hinges on whether the tribunal denied parties a fair opportunity to present their case regarding the allocation of expenses. As noted by Blake, Cassels & Graydon, the British Columbia Court of Appeal recently set aside such an award because the parties lacked the chance to make submissions on costs. This principle aligns with international standards, where procedural fairness is paramount. If the tribunal fails to engage with new arguments raised in closing submissions, as highlighted in recent legal analyses, it creates a fundamental defect. The Alberta judge’s decision to strike an appeal due to late filing underscores the strict timelines involved, yet procedural errors remain a valid ground for challenge if they prejudice the outcome.

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The core issue lies in the tribunal’s duty to consider all relevant submissions before determining costs. When a party raises a novel argument about expense allocation, the tribunal must provide a reasonable opportunity to respond. Failure to do so creates a reasonable apprehension of bias, necessitating the setting aside of the award. This approach ensures that decisions are not made in a vacuum. Practitioners must carefully document all submissions and highlight any ignored points in their appeals. The combination of international regulations and domestic precedents reinforces that procedural integrity is essential. Without this safeguard, the arbitration process loses its legitimacy, making it crucial for appellants to demonstrate exactly how the lack of engagement directly impacted the costs decision.

Opportunity to make submissions

A costs award is usually challenged by an application to the supervising court to set it aside for procedural unfairness, rather than by a fresh appeal on the merits. The unresolved point is best settled this way: if the tribunal decides costs on a basis the parties had no fair chance to address, that is a reviewable procedural error even when the final amount looks reasonable. The B.C. Court of Appeal’s decision is instructive because it set aside a costs award where the parties lacked an opportunity to make submissions.

The applicant should therefore identify the specific issue—such as a new costs argument raised in closing or a proposed allocation never put to the parties—and show that the omission was material, not merely a harmless irregularity. Courts will not reopen costs for every misstep, but they should intervene where the process denied a fair opportunity to respond. Practical evidence includes the procedural order, submissions, correspondence, and the tribunal’s reasoning. Relief is typically remittal for fresh submissions on costs, not automatic substitution of the applicant’s preferred figure.

Bias and reasonable apprehension

An appeal of an arbitration costs award for procedural error typically begins with the court assessing whether the tribunal breached the parties' right to be heard. In the British Columbia decision noted by Blake Cassels, the court set aside a costs award because the parties were given no opportunity to make submissions on the costs issue before the tribunal ruled. The court treated this as a fundamental procedural failure rather than a mere irregularity, since the parties had been deprived of the chance to address a matter central to the outcome. That reasoning suggests a party seeking to challenge a costs award should first document exactly what submissions it was prevented from making and how the tribunal's process foreclosed them.

The practical route is to apply to court under the applicable arbitration statute to set aside the award, framing the denial of the opportunity to be heard as a ground going to procedural fairness. Where the failure also involves a tribunal's refusal to engage with arguments raised in closing, the applicant should connect that omission to the apprehension of unfairness, since tribunals that ignore live issues risk the award being set aside on that basis alone.

Late filing and irregularities

A costs award may be challenged separately where the tribunal denied a party a fair opportunity to address costs. The B.C. Court of Appeal’s decision in Blake, Cassels & Graydon illustrates the workable route: instead of reopening the merits, the aggrieved party should seek set-aside or appeal under the applicable arbitration statute, framing the defect as a procedural irregularity that caused real prejudice. The unresolved point is whether a late objection forfeits that route. It should not automatically do so. If the party raised the issue promptly after learning of the costs disposition, or could not reasonably have known earlier, courts should entertain the challenge; otherwise finality wins.

Practically, the applicant must show more than an unfavourable allocation. It must identify the missing submission opportunity, explain what it would have said about costs, and tie that to the tribunal’s reasoning or exercise of discretion. A tribunal’s failure to engage with a new costs argument raised only in closing submissions may strengthen the complaint, but the safer course is to seek a brief opportunity to respond before the award is finalized.

Third party funding costs

Addressing procedural errors in arbitration costs requires a precise focus on the denial of natural justice, specifically the lack of opportunity for parties to make submissions. Recent precedents, such as the B.C. Court of Appeal’s decision, establish that awards must be set aside when tribunals fail to engage with new arguments raised in closing submissions. This oversight creates a reasonable apprehension of bias, a rule solidified by Vento’s legal analysis. When a tribunal ignores critical evidence or legal positions presented by one side, it fundamentally undermines the fairness of the proceedings. Consequently, the affected party must demonstrate that this procedural irregularity materially impacted the outcome. The appeal process hinges on proving that the tribunal’s failure to consider these submissions deprived the party of a fair hearing. This is not merely a disagreement over the calculation of fees but a fundamental breach of procedural integrity.

Furthermore, the timing and justification for such appeals are critical, as illustrated by an Alberta judge who struck an appeal due to procedural irregularities causing late filing. Parties must ensure their challenge is filed promptly and clearly articulates the specific procedural failure. The ICLG’s 2026 regulations on international arbitration emphasize that courts scrutinize whether the error was acknowledged and addressed. If the tribunal’s decision-making process excluded relevant submissions, the award lacks the necessary procedural foundation. Therefore, the appeal must clearly link the procedural error to the resulting injustice. It is essential to argue that the tribunal’s inaction created an unfair advantage or disadvantage, warranting judicial intervention. This approach aligns with broader principles of transparency and accountability in arbitration, ensuring that costs awards reflect a truly fair and open process.

Appealing Costs vs Setting Aside Awards

For a procedural error affecting a costs award, the safer route is usually a set-aside application under the applicable arbitration statute, not an appeal. Show a material denial of the opportunity to make costs submissions or another serious irregularity; ask the court to set aside and remit. An appeal is limited to permitted points of law and rarely succeeds on costs discretion alone.