<center><span class="news-text_italic-underline">Genel Energy Miran Bina Bawi Limited v Kurdistan Regional Government of Iraq [2026] EWHC 1003 (Comm)</span> — Commercial Court (Dias J), 1 May 2026</center>
The proceedings arose from an LCIA arbitration concerning the termination of contracts between the claimant, Genel Energy Miran Bina Bawi Limited (“<span class="news-text_medium">GEMBBL</span>”) and the defendant, the Kurdistan Regional Government of Iraq (“<span class="news-text_medium">KRG</span>”). As the successful party, KRG claimed USD 35.5 million in legal and expert fees but provided only aggregate figures, without allocating costs to particular workstreams or individual fee earners.
GEMBBL challenged the costs award under section 68(2)(b) of the <span class="news-text_italic-underline">Arbitration Act 1996</span> (“<span class="news-text_medium">AA 1996</span>”) on the grounds of serious irregularity. It argued that the award failed to comply with section 63(3) AA 1996, which requires a tribunal determining costs to specify the items of recoverable costs and the amount referable to each (the “<span class="news-text_medium">Specificity Provisions</span>”) and that this failure constituted an excess of power. KRG relied on Article 28.3 of the LCIA Arbitration Rules 2020, which it contended governed the matter and required only that the tribunal state the amount of costs awarded.
Dias J dismissed the challenge, making three principal findings. First, Article 28.3 of the LCIA Rules provides a complete, free-standing mechanism for the assessment of legal costs, sufficient to exclude the default rules under section 63 AA 1996 in their entirety. The judge rejected the argument that there was any conceptual limit on the type of party agreement capable of ousting those default rules, finding such an approach to be unduly prescriptive and contrary to the principle of party autonomy.
Second, even if the Specificity Provisions had applied, non-compliance would have amounted at most to an erroneous exercise of power, not an excess of power within the meaning of section 68(2)(b). Applying <span class="news-text_italic-underline">Lesotho Highlands Development Authority v Impregilo SpA [2005] UKHL 43</span>, Dias J reasoned that the Specificity Provisions are essentially adjectival in nature. Since parties are free to confer on a tribunal the power to act inconsistently with non-mandatory provisions, those provisions cannot be fundamental to the existence of the power itself. The judge also noted that accepting GEMBBL's argument would risk a significant increase in post-award costs challenges under section 68, contrary to the objective of one-stop adjudication.
Third, the reference to "items of recoverable costs" in section 63(3)(b) AA 1996 is to the headline categories set out in section 59, broadly, the costs of the tribunal, the arbitral institution and the parties and not to individual items of work.
Whilst the challenge was dismissed, Dias J indicated that, had an excess of power been established, the Court would have found substantial injustice on the facts, given that further particularisation of costs might have produced a more favourable outcome for GEMBBL. Practitioners should note that carefully drafted institutional rules may displace statutory default provisions on costs entirely and that section 68 challenges on costs grounds face a high threshold, requiring proof of an excess, rather than merely an error, of power.
