A fundamental Study in third-party Arbitration Financing

Abstract

         The text discusses the widespread use of third-party funding in some countries as a mechanism for investing in international arbitration. This involves a third party financing one of the arbitration parties، often the claimant، who lacks sufficient funds to initiate arbitration proceedings.

    The financing may include risk-sharing، and in return، the third party receives a percentage of the profits if the claim is successful. Australia and England are highlighted as countries experienced in implementing such financing to encourage investment and protect the rights of investors and foreign companies. The funding process is governed by a contract between the third-party funder، typically an investment specialized company، and one of the arbitration parties.The agreement includes the payment of legal costs in exchange for a specific percentage of the

profits in case of a successful claim. The contract also imposes conditions related to confidentiality، non-disclosure of information، and the third-party funder's commitment to reveal their identity only if legally required. While third-party funding is a growing industry in arbitration due to the significant growth in international investment، there are risks such as potential conflicts of interest between the funder and arbitral tribunals.