The Impacts Of Third-party Funding On Internationalarbitration And Suggestions Of Regulation

In recent years,with the development of economic globalization and international trade,the cost of arbitration keeps increasing,which brings great financial burden to the parties,as well as hinders the development of international arbitration.At the same time,the third-party funding arrangements begin to enter the field of international arbitration,and developed into a financing industry.Because of the great advantages of the third-party funding in reducing the economic burden of the parties and the transfer of risk,governments have begun to support and guide the third-party funding.However,the involvement of the third-party funding arrangements challenge the international arbitration procedure and we need to deal with it.This article is divided into four chapters,analyzing the third-party funding with the theory of arbitration and putting forward relevant regulation opinions.The first chapter introduces the concept,characteristics,nature and history of the third-party arbitration.Third-party funding referred to in this article is the one with a narrow concept,which is an outsider funderpay claimant the costs of the arbitration activities with the aim to share the benefits of the awards,excludingloans,insurance and other funding forms.Then it analyzesthe history of the third-party funding and the reasons for the rise and development of it.The second chapter analyzes the impact of third party funding oninternational arbitration procedure,mainly includes three aspects: the relationship between the investor and the funder may challenge the independence and impartiality of the arbitrators,funded parties and funders share the data and case information may lead to violation of the confidentiality obligation,the claimant may can't afford the recovery of the respondent and the awards may be refused to recognize and enforce by a foreign court.The third chapter puts forward some suggestions on how to deal with the challenges,including the establishment of the third-party funding disclosure and security for costs.The disclosure system is the premise and basis to solve other problems brought by the third-party funding,it mainly includes two parts: the funded party is forced to disclose the funding facts and the funder's identity as early as possible;the arbitrator has the power to decide whether to disclose the content of the funding agreement.The security for cost is to ensure that the respondent can be recovered by the claimant,and the arbitrator needs to analyze the necessity case by case.The fourth chapter is based on the development of China's arbitration practice,putting forward suggestions on the CIETAC arbitration rules to establish systems of disclosure and confidentiality,in order to deal with third-party funding in international arbitration.