Disclosure of Third-Party Funding in Commercial Arbitration

• Main Authors: Caroline Overgaard, Johan Tufte-Kristensen
• Format: Article
• Language: English
• Published: Aalborg Universitetsforlag 2020-08-01
• Series: Nordic Journal of Commercial Law
• Online Access: https://somaesthetics.aau.dk/index.php/NJCL/article/view/6099

Third-party funding used to be an unknown phenomenon to the majority of arbitration scholars and practitioners but, over the past decade, the phenomenon has entered the arbitration scene and become subject to significant attention. Today, arbitral proceedings may involve sophisticated funding arrangements. Such arrangements may promote access to arbitration and entail other advantages, but when they remain unknown to the arbitrators and the funded party’s opponents, they may give rise to a series of practical issues concerning, inter alia, costs and conflicts of interest. When a party has raised funding from a third-party funder, the arbitrators and opponents need to know about it. A series of practitioners and academics have contributed to the general field of thirdparty funding in arbitration. They have examined the prevalence of the phenomenon and identified the issues associated with it. However, only a few have provided practical and operational solutions to these issues. The article explains how to solve the issues by way of disclosure. It examines the consequences of compelling a funded party to disclose its funding arrangements, and it examines how to adopt and construct a duty of disclosure in the most feasible manner. The article thereby contributes to the development of legal and institutional tools to tackle the issues associated with third-party funding in arbitration.