THIRD-PARTY FUNDING IN INTERNATIONAL ARBITRATION

Sean P. Galliher*

I. INTRODUCTION

Third-party funding of legal actions has been around, in one form or another, for years. Such funding has been particularly effective in financing litigation in the United States. Third-party funding is also increasingly popular in international arbitration, largely as a result of the broadening scope and therefore cost of arbitration. Arbitral institutions are now grappling with the financial complexities inherent in third-party funding and the impact of such funding on international arbitration. Legislation, rules, case law, and regulations are being revisited in light of the issues presented by third-party funding. After discussing the nature and types of funding currently being used in international arbitration, this article will evaluate the current state of international litigation funding mechanisms, assess the impact these funding mechanisms have on international arbitration, and discuss the financial future of international arbitration.

II. THIRD-PARTY FUNDING IN ARBITRATION: THE VARIOUS AGREEMENTS INVOLVED