Third-Party Funding: Security for Costs and Other Key Issues

2 The Investment Treaty Arbitration Review 103 (Barton Legum ed., Law Business Research), 2017

23 Pages Posted: 10 Oct 2017

See all articles by Miriam Harwood

Miriam Harwood

Curtis, Mallet-Prevost, Colt & Mosle

Simon Batifort

Curtis, Mallet-Prevost, Colt & Mosle; Brooklyn Law School

Christina Trahanas

Curtis, Mallet-Prevost, Colt & Mosle

Multiple version iconThere are 2 versions of this paper

Date Written: May 1, 2017

Abstract

Third-party funding, referring to the financing of lawsuits in exchange for a portion of the proceeds in the event of success, is a relatively recent phenomenon in investment arbitration. Professional funders appear to have realised the potential of a field where multimillion and multibillion-dollar cases are the norm rather than the exception. They may also be attracted by the lack of regulation of third-party funding. While some domestic laws limit or even prohibit third-party funding, investment arbitration was until recently a ‘legal no man’s land’ in that respect. But that situation is rapidly changing. As third-party funding is becoming more common, a growing body of arbitral decisions and commentary has highlighted serious concerns.

This chapter discusses some of the key issues, including:

(1) potential conflicts of interest arising out of the involvement of a third-party funder in an arbitration;

(2) whether a party’s reliance on third-party funding constitutes grounds for ordering security for costs;

(3) whether the involvement of a third-party funder has implications for the jurisdiction of investment treaty tribunals; and

(4) whether and to what extent a party relying on third-party funding should disclose that arrangement.

Suggested Citation

Harwood, Miriam and Batifort, Simon and Trahanas, Christina, Third-Party Funding: Security for Costs and Other Key Issues (May 1, 2017). 2 The Investment Treaty Arbitration Review 103 (Barton Legum ed., Law Business Research), 2017. Available at SSRN: https://ssrn.com/abstract=3047873

Miriam Harwood

Curtis, Mallet-Prevost, Colt & Mosle ( email )

101 Park Avenue
35th Floor
New York, NY 10178-0016
United States

Simon Batifort (Contact Author)

Curtis, Mallet-Prevost, Colt & Mosle ( email )

101 Park Avenue
35th Floor
New York, NY 10178-0016
United States

Brooklyn Law School ( email )

250 Joralemon Street
Brooklyn, NY 11201
United States

Christina Trahanas

Curtis, Mallet-Prevost, Colt & Mosle ( email )

101 Park Avenue
New York, NY 10017
United States

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