Third Party Funding (TPF) is a relatively new phenomenon in international commercial arbitration. It is also increasingly popular and regulated. Parties to arbitrations are ever so inclined to take advantage of TPF, which does not apply only to the financially struggling ones, but to wealthier ones as well, as they wish to conduct their business normally, despite being a party to the arbitration proceedings. TPF differs from other forms of dispute funding in that the funder shares not only the profits, but the losses as well – if the funded party loses the dispute, funder’s investment is lost. TPF brings more positives than negatives into the world of arbitration, with its most prominent feature being enabling the parties to have access to justice. To address issues related to TPF, such as arbitrators’ conflict of interests, adequately, it has to be properly defined – a broad definition of TPF, which covers funding methods with same effects as TPF, is the most appropriate one.
In order to assess arbitrators’ conflicts of interest in international commercial arbitration, any potentially problematic situation must be viewed in the light of the standard for the disqualification of arbitrators contained in arbitration rules. Most leading arbitration rules contain the standard of a reasonable doubt as to the arbitrator's impartiality and independence. Connections between arbitrators and funders may meet such disqualification standard, which is why disclosure of TPF is increasingly required in international commercial arbitration. Such rules on disclosure obligation are contained in national laws, as well as arbitration rules, and certain soft law rules. At the end of the master's thesis, the author looks into the future and proposes a uniform regulation of disclosure obligation. In doing so, author advocates for a narrow disclosure, which preserves the confidentiality of the funder-funded party relationship as much as possible.
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