Research On Third Party Funding In International Arbitration

A survey released in 2015 by Queen Mary University of London and White&Case shows that high costs have become one of the most troubling issues in international arbitration.Most parties need various cost transfer systems to lighten their own economic burdens.Meanwhile,the 2008 global financial crisis made many investors aware of the volatility of financial markets and the unpredictability of returns,so they began to look for new areas of investment.Considering of the huge market demand and the transformation of the capital supply,third party funding emerged and became prosperous.This paper is divided into five chapters,from the perspective of the definition of third party funding,pros and cons,historical background,legal basis,legislation and judicial practice of various jurisdictions and international organizations,to introduce the basic situation of third party funding,third party funding development and representative legal systems,and offer a prospect of the future development direction of third party funding.Based on the above content,this paper tries to put forward suggestions regarding with China's regulation of third party funding.The first chapter begins with the expression and definition of third party funding,tries to find the appropriate English expression for the"third party funding"in the paper,and defines the third party funding with legislative documents and academic writings.The second and third sections respectively introduce the historical backgrounds and advantages of third party funding.The second chapter analyzes third party funding from the perspectives of law and economics,procedural justice and substantive justice.The analysis can demonstrate that third party funding is not only economic,but also conforms to the traditional concept of justice.The third chapter first addresses the challenges posed by third party funding to the existing international arbitration.Because third party funding shakes the traditional cornerstone values and principles in international arbitrations,many jurisdictions and international organizations have to regulate third party funding.This paper also introduces the current countermeasures from legislative and judicial perspectives and supplements a horizontal comparison.The United Kingdom and Australia are both common law countries,and the biggest obstacle in their ways to promoting third party funding is maintenance and champerty.Germany,as the representative of the civil law system,provides different ideas for the determination of the legal nature of third party funding.Hong Kong and Singapore are the first to legislate on third party funding.International Bar Association regulates third party funding in the form of conflict of interest lists,while International Centre for Settlement of Investment Disputes responds to third party funding through rulings and verdicts.The fourth chapter hopes to fundamentally circumvent the risks posed by traditional models by changing the triangular model among third party funders,lawyers and parties.This scenario is not purely hypothetical.Some countries have allowed new trading models.This chapter analyzes both the pros and cons of new models,and puts forward some possible solutions of the drawbacks mentioned.The fifth chapter focuses on the domestic countermeasures to third party funding.Although the number and amount of international arbitration cases received by CIETAC have grown rapidly,the Commission only has made very brief provisions on third party funding in the 2017 International Investment Disputes Arbitration Rules.With the further deepening of China's opening and the implementation of the Belt and Road,it is necessary for China to formulate special arbitration rules for third party funding.This chapter suggests that we should formulate a single law or a single rule as a supplement or amendment to the existing rules and pay attention to the disclosure of third party funding,the influence of the funders on cases and parties,the security and awarding of cost and the confidentiality of the arbitration.