Originally from The Law and Practice of International Arbitration: Essays in Honor of John Fellas – Preview Page

1. INTRODUCTION: IS THERE ANYTHING LEFT TO SAY ON THIRD-PARTY FUNDING? 

Third-party funding has been in the arbitration scene for some time now2 and despite being one of the popular subjects for academic research and of practitioner concerns over a decade,3 it has been examined mainly in relation to its impact on access to justice,4 how it interacts with transparency in arbitral proceedings,5 and conflicts of interest.6 While justifiable and serious concerns have been raised and reasonable points have been made, some institutions perhaps reacted too quickly by adding mandatory disclosure requirements to their rules without paying sufficient attention to their compatibility with third-party funding initiated midway through arbitral proceedings, 7 the potential risk that disclosure of midway funding is more likely to affect arbitrators,8 and evil ways parties could use these disclosure rules to try to gain an unfair advantage.9 

This essay identifies a concern that has not been previously addressed. At least not in this context, distinguishing and focusing on funding initiated midway through proceedings. Funding agreements commonly come into effect before or at the time proceedings commence. However, nothing prevents a third-party funder from entering later in the proceedings.10 A party can obtain third-party funding at any time.11 Unfortunately, although acknowledged, most research on third-party funding examine their respective issues on the assumption that funding is present since the beginning of proceedings or without analyzing whether the issue would be affected differently if a party was to enter in a funding arrangement midway through the proceedings.12