In two related decisions, different PRC courts have upheld third
party funding arrangements for arbitration, finding that they were
not prohibited by PRC law or the CIETAC Rules and did not provide
valid grounds to challenge an award. In a third decision, a third
party funding arrangement for litigation was held to be invalid
because it violated public policy.
These are the first cases in which the PRC courts have
considered certain specific issues in the context of third party
funding, including disclosure, conflicts of interest,
confidentiality and public policy. The decisions underline the
pro-arbitration approach adopted by many PRC courts in recent
years, whilst also suggesting greater caution in relation to the
use of third party funding in the litigation sphere.
