Introduction

The High Court’s decision in Genel Energy Miran Bina Bawi Limited v The Kurdistan Regional Government of Iraq [2026] EWHC 1003 (Comm) reinforces two familiar themes in English arbitration law: the finality of arbitral awards and the limited scope for court intervention under the Arbitration Act 1996.

The case arose from a challenge under section 68(2)(b) to a costs award of more than US$26 million. The issue was whether the tribunal had exceeded its powers by failing to comply with section 63(3), which requires an award to specify the recoverable costs and the amount attributable to each item.

1. It examines the extent to which institutional rules such as the LCIA Rules can displace the default provisions of the Arbitration Act 1996.
2. It reinforces the central role of party autonomy in shaping arbitral procedure and costs recovery.
3. It underscores the exceptionally narrow scope of challenges under section 68 of the Act, especially in relation to costs awards.
4. It draws a sharp distinction between a tribunal acting beyond its powers and a tribunal merely making an error in the exercise of powers it unquestionably possesses.

Background

The dispute concerned the costs of a two-week arbitration in February 2024 arising from the termination of two production sharing contracts for oil and gas reserves in the Kurdistan Region of Iraq. In a partial final award dated 2 December 2024, the tribunal held that KRG had validly terminated the contracts and dismissed GEMBBL’s counterclaim.

KRG then sought more than US$35.5 million in legal and expert costs, but provided only limited supporting material rather than a detailed schedule.

• aggregate fee figures by category of fee earner;
• monthly aggregate legal fees;
• broad hourly rate ranges; and
• monthly expert fee summaries.

The tribunal accepted that the material did not allow it to assess matters such as staffing or the reasonableness of the hours claimed. Even so, drawing on its familiarity with the case, it awarded about US$26 million after applying a 20% reduction to profit costs and a 50% reduction to one expert’s fee.

The Legal Framework

GEMBBL challenged the award under section 68(2)(b), arguing that the tribunal had exceeded its powers by failing to comply with section 63(3). The arbitration was governed by Article 28 of the LCIA Rules 2020.

The key issue was how section 63 of the Arbitration Act 1996 interacted with Article 28 of the LCIA Rules 2020. Article 28(3) allows tribunals to assess legal costs on any reasonable basis and makes clear that they need not follow the costs-assessment procedures of any state court or other legal authority. The court therefore had to decide whether that regime displaced the specificity required by section 63(3).

The Central Questions Before the Court

Mrs Justice Dias identified four principal issues:

1. Whether the tribunal’s power to award costs derived from section 63, Article 28, or both.
2. Whether non-compliance with section 63(3) could amount to an excess of power under section 68(2)(b).
3. Whether the tribunal had in fact complied with section 63(3).
4. Whether any substantial injustice had occurred.

The court dismissed the challenge on several independent grounds.

The Judgment

The most important part of the judgment was its emphatic endorsement of party autonomy. Although Mrs Justice Dias expressed “considerable sympathy” for GEMBBL and said best practice would have been to provide a fuller costs schedule, she held that by choosing LCIA arbitration under the Arbitration Act 1996 the parties had waived any right to complain that the tribunal had simply reached the wrong answer. They had, in her words, “deliberately and consciously elected” this form of dispute resolution.

The judgment also drew a clear distinction between a tribunal exceeding its powers and a tribunal merely exercising them wrongly. Even if the tribunal had erred in the form of its award, that was at most an erroneous exercise of power, not an excess of power.

The court accepted that, if every inadequate costs explanation could be framed as an excess-of-power challenge, section 68 would become a routine appeal route, contrary to the policy of the Arbitration Act. Mrs Justice Dias warned that GEMBBL’s approach could open the floodgates to section 68 costs challenges in almost every arbitration.

In reaching that conclusion, the court relied heavily on Lesotho Highlands Development Authority v Impregilo SpA [2005] UKHL 43, which confirms that section 68 is a long-stop remedy for exceptional procedural failings, not a mechanism for correcting ordinary legal or factual errors.

Although it was unnecessary to decide the point, the court also considered the meaning of section 63(3)(b). It rejected GEMBBL’s argument that “items of recoverable costs” required bill-level detail, holding instead that the phrase refers back to the headline categories in section 59. Mrs Justice Dias considered any more exacting approach impractical.

The court also indicated that, had there been an excess of power, GEMBBL would likely have established substantial injustice.

Mrs Justice Dias accepted that fuller particulars might have produced a lower award. She also held that the inability to know what the tribunal would have done with proper detail could itself amount to substantial injustice.

But because there was no actionable excess of power, the challenge failed.

Conclusion

At first glance, the decision is a bitter result for the paying party. But it is arguable the reductions applied to the claim fall within the range of outcomes that might well be reached on a successful detailed assessment.

More broadly, the case reaffirms English arbitration law’s strong commitment to party autonomy and finality.

The Court made clear that:

• non-mandatory statutory provisions yield readily to institutional rules;
• section 68 cannot be transformed into a disguised appeal mechanism;
• tribunals possess wide discretion in costs assessment; and
• courts will intervene only in truly exceptional circumstances.

At the same time, the judgment is a cautionary reminder for tribunals and parties.

Although the challenge failed, the court’s criticism of the sparse costs evidence was clear. Tribunals may have broad discretion, but weakly supported costs claims can undermine confidence in the arbitral process.

Parties should think carefully about costs assessment when agreeing to arbitrate. They can incorporate section 63 contractually or disapply institutional costs rules if they want a fuller basis for later challenges to an opponent’s costs.

Ultimately, the decision reinforces the core policy of the Arbitration Act 1996: arbitration is intended to be a final, efficient and autonomous form of dispute resolution, subject to only limited judicial supervision.