Research On The Regulation Of The Conflicts Of Interest Of Third Party Funding In International Commercial Arbitration

In recent years,third party funding has developed rapidly which attracts widespread attention.Third party funding was discussed as a major concern at the thirty-fourth and thirty-fifth sessions of Working Group III of the United Nations Commission on International Trade Law in 2017 and 2018.It is undeniable that the third party funding has played a positive role in promoting the development of international commercial arbitration,but we should also take care of its disadvantages.Among these disadvantages,the conflict of interest is primary and prominent.The association between arbitrators and third party funders often affects the independence and impartiality of arbitrators.Actually,the study of third party funding has appeared in practice,but in the field of international commercial arbitration,the regulation of conflicts of interest is only focused on the level of disclosure obligation.Due to the complexity and diversity of conflict of interest,the existing rules cannot save conflicts of interest very well.Based on the research and analysis of the conflict of interest,combining with the existing international regulations,this thesis puts forward suggestions on the regulation of conflict of interest.At the same time,this thesis analyzes the practice of third party funding in China,and provides ideas for the introduction of third party funding and regulation of conflict of interest in China.This thesis is divided into four chapters to study the conflict of interest of third party funding:The first chapter elaborates the theoretical basis of third party funding,and defines the concept of third party funding by explaining the definition and characteristics.At present,the discussion on the definition of third party funding in the academic circle can be divided into broad and narrow sense.The third party funding discussed in this thesis belongs to the narrow sense.Then it analyzes the manifestations and consequences of conflicts of interest,and summarizes the manifestations of conflicts of interest between arbitrators and third party funders based on IBA Guidelines.Conflicts of interest will lead to adverse consequences,such as hindering the advancement of arbitration proceedings,the cancellation or refusal of arbitration award,and the increase of time and funds for the parties.The second chapter analyzes the origin of the conflicts of interest in the third party funding.It often contains confidentiality clause in the agreement,which carried on the limits to the recipient to disclosure information.The third party funders don’t have the obligation to disclose as an outsider,which makes the relationships between the arbitrator and the third party funders are easy to be hidden,leading to the impartiality of the arbitrator’s independence.At the same time,the existing disclosure rules of conflicts of interest have limitations: such as the scope of disclosure subject is narrow,the scope of disclosure matters is incomplete,and the consequences are not clear.The limitations of disclosure rules prevent third party funded arrangements from being known by the arbitral tribunal and the other party,which limits the regulation of conflicts of interest.The third chapter puts forward some suggestions to regulate the conflict of interest.Starting with duty of disclosure and combining with existing laws and arbitration rules,this thesis proposes a solution to regulate the problem,which is to construct a legal system of disclosure.The system includes the amendment of the current arbitration laws and the amendment of arbitration rules.Furthermore,there are few legal sources for adjusting conflicts of interest because it is a new phenomenon.So the introduction of the soft law plays an important role in regulating conflicts of interest.In addition,making up the limitations of the existing disclosure rules is an also important aspect.The subject of disclosure obligation,the scope of disclosure and the consequences of non-disclosure should be adjusted to break through the shackles of existing rules.The fourth chapter discusses the development of third party funding and the regulation path of conflict of interest in China.Based on the analysis of the practice and development of third party funding in China,the thesis concludes that it is necessary and feasible to introduce third party funding.According to the national conditions,the regulation of conflict of interest should follow both hard laws and soft laws.It is proposed to set up a special department to examine third party funding and establish a disclosure system as a concrete step to regulate conflicts of interest in order to help the development of third party funding gown up healthy and orderly in China.