In the consolidated arbitration proceedings between Canfor Corporation v United States of America, Tembec et al v United States of America and Terminal Forest Products Ltd v United States of America, the tribunal had to consider, among other matters, whether the claimant (Tembec) should bear the respondent's (United States of America) costs of an arbitration under the UNCITRAL Rules, in circumstances where the claimant had unilaterally withdrawn from the proceedings on the eve of a jurisdictional hearing.

Most of the tribunal's findings concern whether the claimant could rely on an agreement entered into by the respondent and various other parties to the proceedings that the proceedings be terminated with no order as to costs. However, it was ultimately decided that the claimant was not a party to that agreement. The tribunal therefore went on to consider whether the claimant should be considered to be an "unsuccessful party" for the purposes of the Article 40 (1) of the UNCITRAL Rules, which provides that, unless there are reasons for not doing so, costs of the arbitration shall be borne by the unsuccessful party.

The tribunal noted that the UNCITRAL Rules did not expressly address the issue of unilateral withdrawal from proceedings by a claimant. However, the tribunal interpreted the reference to "unsuccessful party" in Article 40 (1) as including a party which unilaterally withdrew its claim. Therefore, it found that the claimant was liable for the respondent's costs.

The case is a reminder of the principle that unilateral withdrawal by a claimant will usually result in cost consequences, even in circumstances, such as these, where the relevant rules did not expressly address the issue.