Arbitrator fees after termination: separate remuneration from the costs decision

When an arbitrator leaves before the final award, two questions must be kept separate: what remuneration may the former arbitrator claim, and which party ultimately bears that payment? Section 590 of the Austrian ZPO governs early termination of the arbitrator’s mandate. It does not by itself determine the amount of remuneration or the final allocation of costs.

The remuneration analysis starts with the agreement with the arbitrator and the applicable procedural rules. If no remuneration was agreed and gratuitous service was not intended, section 1152 ABGB may imply reasonable remuneration. The amount then depends on the assignment, work performed, procedural stage and agreed calculation basis.

The later costs decision follows a separate analysis. Under section 609 ZPO, the arbitral tribunal decides reimbursement of costs when the arbitration ends unless the parties agreed otherwise. A remuneration claim and the question which party bears that amount are therefore different issues.

What section 590 ZPO regulates

Under section 590 paragraph 1 ZPO, an arbitrator’s mandate ends when the parties agree or the arbitrator resigns. Subject to the court decision addressed in paragraph 2, the parties may also agree a procedure for ending the mandate.

If the arbitrator is unable to perform the duties or does not perform them within a reasonable period, either party may apply for a court decision on termination under section 590 paragraph 2. That decision is not subject to appeal.

Section 590 paragraph 3 also provides that resignation or a party’s consent to termination does not acknowledge the alleged ground for termination. The form of termination should therefore be recorded separately.

Review the remuneration claim separately

Section 590 ZPO ends the mandate but does not set a particular fee. The first question is what was agreed about remuneration. This may include an express fee agreement, institutional rules or appointment documents that define the remuneration basis.

If remuneration was not agreed and gratuitous service was not intended, section 1152 ABGB implies reasonable remuneration. That does not identify the correct amount by itself. The assignment, scope of work, procedural stage, questions handled and invoice must be assessed together.

In practice, the word “removal” may describe several legal events. The file should therefore show whether the arbitrator resigned, the parties agreed to termination or a court decision under section 590 paragraph 2 was made.

Organise work performed and the invoice

Prepare a chronology for the invoice review. Record appointment, acceptance of the mandate, procedural orders, submissions, hearings, consultations, questions already addressed and the date of termination. This shows which work was completed or started before the arbitrator left.

Compare the payment request with the remuneration agreement and procedural record. Review the item, calculation basis, payments already made, outstanding work and any invoicing requirements. A focused objection identifies the precise discrepancy and the clarification requested.

Replacement of the arbitrator or repetition of procedural steps requires a separate analysis. This article concerns remuneration for the former arbitrator and its later treatment as a cost item.

Separate interim payment from final reimbursement

Payment to the former arbitrator initially concerns performance of a possible remuneration obligation. It does not decide which party will finally bear the amount as between the parties. That second question becomes relevant in the costs decision.

Under section 609 paragraph 1 ZPO, the tribunal decides reimbursement of costs when the arbitration ends unless the parties agreed otherwise. It considers the circumstances of the case, in particular the outcome. Reimbursement may include reasonable costs required for pursuing or defending the claim.

A party that makes the initial payment should therefore keep the payment record, invoice, remuneration agreement and termination documents. The initial payment alone does not establish the later reimbursement result.

Understand the costs decision under section 609 ZPO

Section 609 paragraph 3 ZPO provides that, together with the decision on the obligation to reimburse costs, the tribunal fixes the amount where this is already possible and the costs are not set off. The obligation to reimburse and the amount are closely connected, but they remain separate analytical steps.

If assessment is not yet possible or was omitted, section 609 paragraph 5 ZPO permits a separate award. For the former arbitrator’s remuneration, the file should therefore show whether the amount is fixed, still requires review or may only be considered in a later costs decision.

A focused costs argument should address the outcome, the parties’ conduct, the reason for termination and the reasonableness of the amount claimed. The weight of each factor depends on the case and any agreement between the parties.

Secure the documents for the review

Bring together the arbitration agreement, appointment documents, remuneration agreement, applicable procedural rules, resignation or termination notice, any court decision and the invoice. Add the procedural timetable, hearing records and payment evidence.

Use a table to record the date of each service, agreed or claimed remuneration, payments already made and the outstanding amount. A separate column should state whether the entry concerns the immediate remuneration claim or the later allocation of costs.

For questions about the arbitrator’s person or a possible challenge, see the article on the missed challenge of an arbitrator. If the validity of the arbitration agreement is also disputed, the article on arbitration clauses in articles and statutes addresses that separate issue.

Common questions about arbitrator fees after termination

Does section 590 ZPO automatically set the arbitrator’s fee?

No. Section 590 ZPO governs early termination of the mandate. Remuneration must be reviewed under the fee agreement, applicable rules and, where relevant, section 1152 ABGB.

Does payment of the fee establish final responsibility for costs?

No. Payment initially addresses a possible remuneration obligation. The tribunal decides reimbursement between the parties under the applicable agreement and section 609 ZPO.

Can the costs decision be made later?

Yes. Section 609 paragraph 5 ZPO permits a separate award where the decision on reimbursement or the amount cannot yet be made when the arbitration ends.

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Next step

Contract, arbitration clause, correspondence and deadlines should be collected. It can then be assessed whether negotiation, preservation or arbitration is central.