Disclosure of Third-Party Funding in International Arbitration

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David Siffert


Center on Civil Justice at NYU School of Law




Third-party funding has evolved into a ubiquitous “feature of modern litigation” that in some jurisdictions is “an accepted and judicially sanctioned activity perceived to be in the public interest.”529 Similarly, third-party funding has become even more prevalent in international arbitration, particularly considering the high dollar amount of most arbitral awards. In addition, several major arbitration seats have officially embraced third-party funding in international arbitration through legislation or court opinions, including Australia, England, and Wales, most of the states in the United States, Germany, the Netherlands, several provinces in Canada, Singapore, Hong Kong, South Africa, and Nigeria (indirectly).530 Furthermore, there are many other jurisdictions where third-party funding may be happening, but no official governmental response has yet ensued.

This article proceeds as follows. The remainder of this introduction defines third-party funding, describes basic third-party funding transaction structures, and outlines the major debates surrounding the existence of third-party funding in international arbitration. Next, this article outlines the reasons and scope for disclosure and describes rules and guidelines for third-party funding as articulated by institutions, arbitral tribunals, domestic courts, treaties, and domestic legislation. This article then addresses third-party funders as custodians of confidential information and charges them with ensuring the legitimacy of the arbitration process and preventing arbitrator conflicts of interest. Finally, this article addresses the rising influence of “outcome-motivated” (or not-for-profit) funders, whose primary focus is something other than making a financial profit from the case.


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