Investment Treaty Arbitrations: The Evolution Of Third Party Funding

In August 2018, the International Centre for Settlement of Investment Disputes ("ICSID"), the body that administers most investment treaty arbitrations, published a set of proposed changes to its rules for resolving disputes between foreign investors and states (the "ICSID Rules"). The amendments, which have been in the works since 2016, are aimed at modernizing and streamlining the Rules. As part of its modernization efforts, ICSID has addressed issues surrounding third party funding, including disclosure of funding and security for costs, that have been the subject of some debate within investment treaty arbitration jurisprudence.

Disclosure of Funding

First, the ICSID Rules amendments introduce an obligation by the parties to disclose whether they have obtained third party funding, and if so, the name of the funder. The name of the funder would also be provided to potential arbitrators prior to appointment to avoid any conflicts of interest. The obligation would