Originally from Handbook on Third-Party Funding in International Arbitration, Second Edition

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PART I.  THE THIRD-PARTY FUNDING LANDSCAPE

1.  The TPF market in Washington, D.C.

1.1.  Please shortly describe the TPF market in your Jurisdiction.

Washington, D.C. is regularly selected as the forum for arbitration of international commercial and investment disputes, particularly investment treaty disputes administered by the World Bank’s International Centre for the Settlement of Investment Disputes (“ICSID”).

The federal district courts in Washington, D.C. also play a significant role in the enforcement of arbitral awards, and particularly arbitration awards against foreign sovereigns.  This is because a civil action against a foreign state will often have to be first brought in the District of Columbia under Federal law.   Specifically, under the venue provisions of the Foreign Sovereign Immunities Act (“FSIA”), a party seeking to bring a civil lawsuit against a foreign state typically can only initiate the primary enforcement proceedings in the District of Columbia’s federal courts.  Once a judgment creditor obtains a judgment in D.C. federal district courts, it then can seek enforcement in other American jurisdictions where the foreign sovereign has attachable assets, a practice referred to by practitioners as the FSIA “two-step.”  Consequently, Funders looking to collect on arbitral awards against foreign sovereigns in the United States will typically have to pass through D.C. federal courts.

The District of Columbia has become an increasingly important jurisdiction for Funders, parallel to the growth of ICSID-administered cases and cross-border commercial disputes involving Greater Washington, D.C.-area multinational corporations.

1.2.  Is it dominated by local or international Funders? Which Funders are active? Which cases typically get funded?

There is no public source identifying TPF cases sited in D.C. or involving D.C. lawyers.  Several Funders active in international arbitrations nationally and internationally maintain offices or personnel in Washington, D.C., including, by way of example only, Burford Capital, Fulbrook Capital Management, Juridica, Omni Bridgeway, Validity Finance and Vannin Capital.  In addition, representatives from other major funders, such as Calunius Capital, Harbour Litigation Funding, and Longford Capital regularly attend arbitration conferences held in D.C. or hold themselves out to fund potential cases worldwide that involve D.C. counsel.  In 2022, the United States Government Accounting Office (“GAO”) conducted a study on Third-Party Litigation Financing (“TPLF”) in response to inquiries from Congressional legislators about the industry (the “GAO Study”).   The typical cases funded, the GAO Study found, included intellectual property, antitrust, asset recovery, fraud, and class actions.