More and more litigants and parties to arbitration proceedings
in India, are availing the benefit of 'Third Party
Funding'. Given the complex nature of litigation disputes
(especially commercial contracts, international commercial
arbitrations, class action suits and insolvency proceedings), high
costs of arbitration proceedings and the long-drawn court battles,
third party funding has emerged to be an economically viable
alternative for the parties to a dispute and an investment
opportunity for strangers to the dispute.
Third Party Funding, popularly known as 'Litigation
Financing', is an agreement between a funder, being a stranger
to the dispute, and the party to the proceedings, usually the
claimant/plaintiff, wherein the third party on a non-recourse basis
agrees to finance the whole or part of the proceedings in return
for financial interest only in the claim proceeds recovered on the
favourable outcome of the dispute.1 These third
party funders can be
