Regulate Funding in International Arbitration: Old Issue Still New

Third-party funding (TPF) provides easier access to arbitration for disputants who may not have sufficient funds available. It similarly helps parties to arbitration who have the funds but would prefer to utilize them elsewhere in their business rather than be blocked from running a claim. A non-party (funder) bears the arbitration costs and, in return, expects either a percentage of the amount awarded in a successful claim or the amount specified in the agreement between the funded party and the funder. While TPF facilitates access to justice, it has also raised challenges such as disclosure requirements, transparency, and potential conflicts of interest. Many arbitral institutions and State jurisdictions have either introduced or updated their laws and rules related to the above concerns. This article explains the concept of TPF in various jurisdictions and its application in arbitration and litigation. The article examines the existing legal framework of TPF in the arbitration process, including the award-making process.