Litigation Financing/Third-Party Funding: A New Way To Ensure Justice

In the recent case of Tomorrow Sales Agency Pvt Ltd vs. SBS Holdings, Inc. & Ors.¹, the Hon'ble High Court of Delhi, while dealing with the issue of holding a third party liable under an arbitration agreement, appreciated the vital role played by third-party funders in ensuring access to justice. It was observed that the absence of third-party funding would restrain impecunious parties from pursuing claims for amounts which may legitimately be due.

In making such observations, the Hon'ble Court re-invoked an essential topic in relation to the importance of third-party funding or litigation financing in India. The nation being witness to a substantial number of pending cases is also home to many individuals, who have genuine claims, but fail to pursue litigations due to an absence of relevant funds. In such cases, the presence of litigation funders or financiers (hereinafter referred to as the 'financiers') acts as a necessary facilitator, to help the aggrieved in