A Study On The Disclosure Of Third Party Funding In International Investment Arbitration

A recent phenomenon in international investment arbitration is that third-party investors provide funds for arbitration proceedings.The third party investor has no direct interest relationship with the substantive issues of the arbitration procedure,but invests in the arbitration procedure,hoping to obtain considerable profits after the settlement of disputes or cases.Although third-party financing is an undeniable and important fact,the existence of third-party investors may affect the process.From the fairness of international investment arbitration procedure and the practice of relevant judicial regions,this paper demonstrates that mandatory disclosure of third-party funding is more reasonable than total prohibition.Therefore,it is necessary to protect the integrity of international investment arbitration procedures while balancing the growing commercial demand for innovative financing methods for legal matters.The general principle that the existence and identity of the investor should be disclosed raises different questions about who is responsible for disclosure,to whom and under what conditions.ICSID arbitration rules stipulate that the participation of third-party investors in international investment disputes may give rise to conflicts of interest,which should be disclosed by arbitrators;disclosure by funded parties can facilitate arbitrators to make appropriate disclosures and decisions on potential conflicts of interest.Excessive disclosure can lead to unnecessary delays and huge costs due to rash questioning of arbitrators or groundless applications for disclosure of financial and funding agreements.Unlike lawyers,funders are constrained by professional ethics in dealing with confidential information and conflict of interest rules.Third party financing adds new complexity to the existing ambiguity of privilege in international investment arbitration.Disclosure of whether the existence of third-party financing agreements has or should have any impact on the cost allocation and cost guarantee in international investment arbitration,the arbitral tribunal usually has a great discretion in cost sharing,and there seems to be no clear and consistent system or procedure in this regard.In view of the above introduction to the disclosure system of third party financing in international investment arbitration,this paper discusses the existing provisions and problems of ICSID arbitration system on third party funding,especially in the disclosure subject,scope and form,time and sustainability obligations.The paper puts forward the corresponding solutions around the existing problems,especially in the privilege.Third party funding and cost guarantee and cost allocation are the restrictions on the disclosure of third-party funding,and will analyze whether the arbitral tribunal can still use its discretion to intervene or consider the relationship between investors and third-party financial providers.Finally,in view of the trend of the development of third-party funding,how China will deal with it to reduce the impact on international investment arbitration.