Scenario: Company A. files a statement of claim with an arbitration centre but “forgets” to pay the advance on arbitration fees, assuming it can file first and pay later. A few weeks later, it receives a notice: the statement of claim is deemed withdrawn. Conversely, respondent B. files a counterclaim but fails to pay the corresponding costs — the counterclaim is deemed withdrawn while the main claim proceeds. In another case, after the arbitral tribunal is constituted, one party refuses to advance expert-appraisal costs — the tribunal suspends the proceedings until an advance is made. Three scenarios, one common thread: advancing costs is not a formality; it is a condition for arbitration proceedings to move forward.
1. Who must advance arbitration costs?
Under the Law on Commercial Arbitration 54/2010/QH12 (effective 01/01/2011; Clause 3, Article 7 amended by Law 81/2025/QH15, effective 01/7/2025 — the provisions on fees and procedure unchanged) and the VIAC Arbitration Rules 2026 (effective 01/7/2026, replacing the 2017 version), the advance-payment obligation is allocated as follows:
- The claimant — when filing the statement of claim must pay the full costs (administrative fees and arbitrator fees per the Schedule of Fees). The Centre forwards a copy of the statement of claim to the respondent only after receiving the claim, accompanying documents and proof of advance payment of arbitration fees (Article 32, Law on Commercial Arbitration; Article 40.1, VIAC 2026).
- A respondent filing a counterclaim — must pay the corresponding costs for the counterclaim (Article 40.2, VIAC 2026).
- Costs arising during the proceedings — after the tribunal is constituted, the Centre (in consultation with the tribunal) decides one party or the parties that must make the advance (Article 40.3, VIAC 2026).
- Appraisal, valuation and experts — the requesting party advances, or the tribunal allocates (Article 46, Law on Commercial Arbitration; Article 40.4, VIAC 2026).
What do arbitration fees cover? Article 34.1 lists: (a) arbitrator fees, travel and other expenses for arbitrators; (b) expert consultation fees and other assistance requested by the tribunal; (c) administrative fees; (d) fees for appointing an ad hoc arbitrator; (e) other utility service fees. Fees are set by the Centre; for ad hoc arbitration, by the tribunal (Article 34.2).
2. What happens if a party does not pay (or underpays)?
The consequences differ by cost type — confusing them is expensive:
- Statement of claim: failure to pay the full costs within the Centre-set deadline → deemed withdrawal of the claim. Crucially, this does not affect the right to file a new claim (Article 40.1, VIAC 2026).
- Counterclaim: failure to pay the corresponding costs → deemed withdrawal of the counterclaim — the main claim proceeds normally (Article 40.2, VIAC 2026).
- Costs arising during proceedings: failure to advance → the tribunal suspends the proceedings at the Centre’s request. This is suspension, not termination — the case resumes once the advance is made (Article 40.3, VIAC 2026).
- Appraisal, valuation, experts: failure to pay as requested → the tribunal decides on the basis of the existing file — the evidentiary disadvantage falls on the party that requested the appraisal (Article 40.4, VIAC 2026).
3. Two safety valves: extension requests and advancing on behalf of the other party
The law does not let a case “die” merely because of one party’s temporary financial difficulty:
- Right to request an extension: a respondent with a counterclaim may request an extension for fee payment; the Centre replies within 05 working days (Article 40.2, VIAC 2026).
- Advancing on behalf of the other party: the Centre may require one party to advance on behalf of the other for procedural costs (Article 40.3, VIAC 2026). Such substitute advances are settled when the tribunal allocates costs in the award.
On settlement: any surplus is refunded; any shortfall must be topped up (Article 40.5, VIAC 2026).
4. The key point: advancing is not the same as bearing the final costs
This is the most commonly confused point: advancing is a procedural obligation — whoever files or requests pays first so the proceedings can run. Who ultimately bears the costs is allocated by the tribunal in the award, under the principle that the losing party bears the arbitration fees — unless the parties agree otherwise, the procedural rules provide otherwise, or the tribunal allocates differently (Article 34.3, Law on Commercial Arbitration; Article 41, VIAC 2026). The tribunal may also decide that one party bears all or part of the other party’s legal costs or other reasonable costs. A party that advanced on behalf of the other is reimbursed through the cost-allocation decision in the award.
5. Special note for ad hoc arbitration
In ad hoc arbitration (not administered by a Centre), arbitration fees are set by the tribunal (Article 34.2, Law on Commercial Arbitration) — the Centre’s Schedule of Fees does not apply. The parties should agree clearly on fees from the outset to avoid mid-case disputes. The VIAC advance-payment rules above do not apply mechanically to ad hoc arbitration.
Frequently asked questions
If the filing-fee advance is not paid, is the case automatically terminated?
No. At the filing stage, the consequence is that the statement of claim is deemed withdrawn — but the claimant keeps the right to file a new claim. Only costs arising after the tribunal is constituted lead to suspension of the proceedings.
If the respondent does not pay for its counterclaim, does the main claim stop?
No. Only the counterclaim is deemed withdrawn; the claimant’s main case proceeds.
The other side refuses to advance — can I advance on their behalf?
Yes. The Centre may require one party to advance on behalf of the other (Article 40.3, VIAC 2026); substitute advances are settled when the tribunal allocates the final costs.
I advanced a lot — who ultimately bears the costs?
The tribunal allocates under the loser-pays principle (Article 34.3, Law on Commercial Arbitration; Article 41, VIAC 2026), unless agreed otherwise. Advancing more does not mean bearing the final costs.
Sources
- Law on Commercial Arbitration 54/2010/QH12 (effective 01/01/2011; Clause 3, Article 7 amended by Law 81/2025/QH15, effective 01/7/2025): Article 32 (forwarding the claim after receiving proof of advance payment); Article 34 (arbitration fees; Clause 3 — loser bears fees); Article 46 (appraisal, valuation and expert fees); Articles 56.1 and 59.1(c) (deemed withdrawal of claim).
- VIAC Arbitration Rules 2026 (effective 01/7/2026, replacing the 2017 version): Article 39 (arbitration costs); Article 40 (payment of arbitration fees — Clause 1: deemed withdrawal of claim; Clause 2: counterclaim and extension requests, Centre replies within 05 working days; Clause 3: advancing procedural costs, substitute advances, suspension; Clause 4: deciding on the existing file; Clause 5: settlement); Article 41 (allocation of arbitration fees).
- Resolution 01/2014/NQ-HDTP guiding the implementation of the Law on Commercial Arbitration (still in force).
Is your company facing a dispute with an arbitration clause, or worried about arbitration costs and the risk of a claim being deemed withdrawn for late advance payment? Reach us via the Contact page of FLAT Law Firm for an assessment of your arbitration agreement, cost estimates and a fitting procedural strategy.
The legal content of this article was reviewed by FLAT’s AI Legal Council and submitted to the owner for approval; it is not an opinion of a licensed lawyer and does not replace legal advice for specific cases.
For reference only, not legal advice.