Research On Disclosure Of Third Party Funding For International Commercial Arbitration

Third-party funding is financing method in which an entity that is not a party to a particular dispute funds another party's legal fees or pays an order,award or judgment rendered against that party,or both.With the continuous development of international trade,arbitration has become an important dispute resolution method for cross-border trade disputes.Third-party funding to participate in international commercial arbitration has injected new vitality into the field of arbitration.In the early days,third-party funding was once banned,and it was gradually accepted in modern times.After a period of evolution,the third-party funding system has become more mature.There are three main steps in the operation of third-party funding in arbitration.First,conduct a neutral assessment at an early stage to assess whether the case is worthy of funding.The main contents include the advantages and disadvantages of the parties in the arbitration process,and the possible direction of the case.In the arbitration process,the involvement of third-party funds helps to transfer the costs of litigation.By passing the litigation costs,it helps the parties to avoid the major problem of litigation costs,and helps the parties to realize their right to file an arbitration.In addition,controlling the costs and risks in arbitration is an important means for funders to protect their profits,and it is also an important step in the current operation of third-party funding in arbitration.Third-party funding for arbitration is a beneficial development.However,third-party funds may affect the fairness,independence and confidentiality of arbitration will affect the fairness of the entity and the final recognition and enforcement of arbitration.In order to solve the negative impact of third-party funding,improving the information disclosure system is an important part.Disclosure helps the arbitrators to conduct arbitration independently and impartially,.So far,Australia,Hong Kong,IBA and other countries,regions and international organizations have made corresponding requests for disclosure in arbitration involving third-party funding.Disclosure is about information Informing.The principles of disclosure and transparency are mutually reinforcing.A good disclosure system can help achieve the principle of transparency,and a good principle of transparency can help to unfold the rules.There is a mutual cooperation between the two.In addition,limiting the principle of confidentiality while focusing on disclosure is also in line with the needs of the development of the times.In the arbitration laws of various countries?regions?,the arbitration rules of various arbitration institutions have generally defined the disclosure obligations,but there are differences in terms of their contents.In general,classification can be done in the following ways.The modes of disclosure obligations can be divided into mandatory disclosure and non-mandatory disclosure.The mandatory disclosure obligation is mainly reflected in the arbitration law enacted by the arbitration legislature of each country,while the non-mandatory disclosure includes the agreed disclosure and the disclosure according to the relevant code of conduct.The standards of disclosure obligations can be divided into objective standards and subjective standards.The difference between the two is that the standards that cause reasonable doubt are different.The subjective criteria are from the perspective of the parties,and the objective criteria are from the perspective of a third party.In terms of disclosure content,the subjects disclosed in third-party funding contains traditional arbitrators.Regarding the content of the disclosure,the disclosure of the subject in the third-party funding increased the disclosure of the party.The disclosure timeincludes one-time disclosure,two-stage disclosure and continuous disclosure.The combination of one-time disclosure and continuous disclosure is the current development trend.There are enumerated ways and limited ways of limiting the scope of disclosure.Of course,since funders and parties tend to not disclose,it is important to limit the scope of reasonable disclosure to balance the interests of all parties.The legal consequences of failure to perform the disclosure obligation mainly include the consequences of the legal consequences of the arbitral award and the liability of the entity that should have assumed the obligation to disclose.Disclosures vary from country to region,and there are many problems in the course of practice.It also brings many problems to arbitrators and parties.For the main problems of the practice process and the disclosure principles proposed by relevant scholars,the following understandings can be made:First,whether mandatory disclosure should be conducted,the answer should be yes.Basing on some investigations,both the funder and the parties tend to refrain from public disclosure,and the mandatory disclosure obligation is not conducive to the fact that the parties and the arbitration tribunal are aware of the funding,which will increase the investigation obligation,and may make the conflict of interest more obvious,which is not conducive to the fairness and neutrality of arbitration.Second,the integration of subjective and objective obligations to establish arbitration disclosure obligations.The standards for disclosure should be based on objective disclosure criteria,that is,judging whether disclosure is required should be from the perspective of a third party who has no interest in the case.However,due to the concealment of third-party funders in third-party funding,the parties should be given more rights and subjective criteria in the disclosure.The two standards are significantly different,but there are also related links.Only by combining the subjective and objective obligations reasonably can the third party be able to guarantee the realization of the disclosure obligations in commercial arbitration,thus ensuring the fairness of arbitration.Third,for the content of the disclosure.From the perspective of the main body of disclosure,the main body of disclosure is mainly arbitrators and funded parties.Inview of the parties' understanding of the facts of the case,it is extremely important to improve the legal system for the parties to disclose relevant facts.Of course,at the same time,the disclosure of arbitrators must not be ignored.From the time of disclosure,disclosure should carried out at first and be continued to ensure that the disclosure is comprehensive and effective.For the scope of disclosure,it is possible to adopt the design of disclosing only the existence of third-party funding and the subject of third-party funding,or may set different lists according to the degree of adverse impact on arbitration to ensure the realization of disclosure.Finally,if the parties and arbitrators fail to fulfill their disclosure obligations,they may consider revoking the arbitration award in combination with different circumstance.However,whether the arbitrator and the parties themselves should bear the corresponding obligations remains to be considered.The arbitrator or the party should be able to claim responsibility when it can prove that the arbitrator or the party has subjective malice.The necessity of introducing third-party funding in China is helpful to alleviate the problem of excessive arbitration fees of some parties,solve the non-systematic problems of the arbitration fee transfer mechanism and so on.At the same time,it is feasible to introduce third-party funding in China.There is no legal obstacle to the introduction of third-party funding in China.The financial industry in China is constantly developing,and the exploration of combining with the law is constantly carried out.If relevant rules and self-regulations can be added as a boost,The localization of third-party funding in arbitration is bound to be feasible.Further standardization of third-party funding is currently a common international consensus,especially the resolution of rights conflicts.Internationally,the third-party funding standardization method will be introduced according to the current situation in the region.Australia is a typical representative of the regulation of third-party funding as a financial services product,while the UK is more inclined to achieve a harmonized state of willingness and regulation of funding through self-regulatory norms.More generally,it is currently adopted that establish relevant international regulatory rules to disclose third party funding.At present,for China,we should actively formulate international arbitration laws and regulations,and at the same time set industry autonomy norms to regulate third-party funding.The development of third-party funding has injected vitality into the current international commercial arbitration and related litigation fields,which has important practical significance.China should actively support third-party funding,which not only helps to absorb international experience,promotes the international development of arbitration in China,and provides a basis for Chinese enterprises to participate in international trade.We should pay attention to it and enable China to grasp the initiative of dispute resolution.In order to better understand the third-party funding system,the disclosure of third-party funding needs to be further stipulated in order to make the third-party funding more widely used in international commercial arbitration,help parties have smooth access of the parties to justice,and help the parties who have insufficient funds and professional skills to realize the right to file an arbitration.