TITLE:
Third-Party Funding in International Arbitration: An Analysis of Policy Challenges and Practical Considerations
AUTHORS:
Xiyue Li
KEYWORDS:
Third-Party Funding, International Arbitration, Policy
JOURNAL NAME:
Beijing Law Review,
Vol.15 No.1,
March
12,
2024
ABSTRACT: Third-party funding (TPF) has become a prominent feature in international arbitration, providing financial support to parties in exchange for a share of the eventual award. This paper examines the policy challenges associated with TPF and offers insights for parties, arbitral institutions, and policymakers. While TPF can enhance access to justice, reduce costs, and improve efficiency, it also raises concerns regarding conflicts of interest, confidentiality, and procedural control. The analysis explores regulatory frameworks and ethical considerations, including existing regulations and self-regulatory measures implemented by jurisdictions and arbitral institutions. Additionally, it examines ethical implications such as the impact on arbitrator independence and the duty of disclosure. Practical considerations for parties engaging in TPF are discussed, including funder selection, agreement negotiation, and conflict management. The paper underscores the role of arbitral institutions in responding to TPF and adapting their rules and procedures. Ultimately, it advocates for a balanced regulatory approach that fosters transparency, disclosure, and ethical standards while preserving the benefits of TPF in international arbitration. By addressing policy challenges and practical considerations, stakeholders can navigate TPF complexities and ensure equitable and efficient dispute resolution.