Third Party Funding In International Arbitration

With the impact of COVID-19 affecting cash flow and available funds, parties may be considering alternative ways of funding the commencement or continuation of arbitral proceedings, which is likely to result in a growing reliance on third party funding (“TPF”), the key features and benefits of which we summarise in this bulletin. We also consider some of the nuances of TPF in the UAE.

Key features

What is it?

As the name suggests, TPF involves a party (sometimes referred to as a “litigation funder” or “arbitration funder”), who is not involved in the dispute, agreeing to fund some or all of a party's legal costs in return for a proportion of any damages awarded and recovered by the funded party.