Introduction of Hourly Remuneration for Arbitrator Fees

The Korean Commercial Arbitration Board (KCAB) has introduced an hourly rate-based method for calculating arbitrator fees in cases where the amount in dispute exceeds 15 billion won, through its 2026 revision of the International Arbitration Rules. This adds an alternative to the existing method of calculating fees in proportion to the amount in dispute. The aim is to more accurately reflect the complexity of a case and the actual time spent on it. It also reflects the preferences of arbitrators and is expected to help vitalize KCAB’s international arbitration practice.

Added to the amount-in-dispute-based method

KCAB has operated on the basis of a “proportional-to-amount-in-dispute” method, under which fees increase as the amount in dispute grows. In international arbitration practice, however, it has often been pointed out that arbitrators clearly prefer hourly remuneration. An arbitrator from a global law firm also stated that he “prefers the hourly rate method.” Another international arbitration expert commented, “Under the amount-linked method, arbitrators must present specific grounds to the arbitration institution when requesting an increase in fees, whereas hourly fees are calculated based on the actual time devoted to the case, leaving less room for dispute. I prefer hourly fees.”

The amount-in-dispute-based method has the advantage of enhancing predictability for the parties, but in large-claim cases it may be more reasonable to calculate fees according to the actual time spent rather than relying solely on the amount in dispute. There are cases where the claim amount is small but the issues are complex, while some high-value cases are relatively straightforward. KCAB appears to have shared the view that the amount in dispute does not necessarily represent the time and effort required to resolve a case, and revised its rules accordingly.

Enhancing convenience for arbitrators and parties

Puigui Emmanuel Ta, Secretary-General of the KCAB International Arbitration Center (French attorney), told The Legal Times, “This rule revision is intended to provide parties with an additional option for cases where the hourly fee method is more suitable.” He further explained, “By introducing a new fee-calculation option, we seek to provide arbitrators with fair remuneration and to guarantee parties reasonable costs that are proportionate to the complexity of their cases.”

The Hong Kong International Arbitration Centre (HKIAC) also allows parties to choose between an hourly rate and a scale of fees based on the amount in dispute. In common law jurisdictions, hourly remuneration is the standard, and at HKIAC, which is influenced by English law, the hourly rate is chosen in the majority of cases. According to the “Report on Arbitrators’ Hourly Remuneration” released by HKIAC in December 2025, the average hourly fee for arbitrators in cases with an amount in dispute of 5 million Hong Kong dollars or less was 3,925 Hong Kong dollars. For cases with an amount in dispute exceeding 1 billion Hong Kong dollars, the average hourly fee was 6,017 Hong Kong dollars. As of 2024, the average hourly fee for cases involving 5 million Hong Kong dollars or less was 3,679 Hong Kong dollars, and for cases exceeding 1 billion Hong Kong dollars it was 6,118 Hong Kong dollars.

HKIAC explained that its analysis of 1,429 arbitrator appointments and confirmations between 2020 and 2024 showed a trend over the past five years in which average hourly fees rose in proportion to the size of the amount in dispute. HKIAC has also raised the upper limit on arbitrators’ hourly fees from 6,500 Hong Kong dollars to 7,500 Hong Kong dollars, effective January 1, 2026.

Reporter Kim Jisoo, The Legal Times

※This article is based on content supplied by Law Times.