Your guide to the law and practice of funding international arbitration
As part of the 5th edition of Litigation Funding, published by Lexology and edited by our very own Steven Friel and Jonathan Barnes, we have updated the chapter covering the funding of international arbitration.
While international arbitration spans multiple types of claims, overlapping jurisdictions and legal regimes, there are some commonalities to consider it an appropriate subject for a brief addendum within this guidebook’s framework. A practitioner considering a transaction involving third-party funding of international arbitration will need to consider multiple potentially relevant jurisdictions. For example, one might need to consider the applicable arbitral rules (if any), the law of the seat of the arbitration, the governing law of the underlying agree- ments, any applicable international treaties, the law of the jurisdiction in which the award will be enforced, and, potentially, the law of the parties’ counsels’ home jurisdictions. Accordingly, this addendum is necessarily limited and endeavours to highlight some of the issues and approaches that are common in the context of third-party funding and international arbitration.
Prime among these commonalities is the tremendous uptake of third-party funding in international arbitration in recent times, regard- less of claim type or venue. This is hardly surprising: international arbitration generally involves complex commercial disputes with sophisticated counsel at premier international law firms. The resulting fee burden can be substantial. Moreover, many international arbitra- tions involve claimants who are capital constrained (often as a direct result of a respondent’s conduct) and would not be in a position to have their claims heard in the absence of third-party funding.
You can download the updated chapter here.