Invisible Stakeholders - The Case For Transparency In Funded Arbitration
- IJLLR Journal
- May 8
- 1 min read
Ms. Tina Benny & Dr. Kuldeep Chand
ABSTRACT
The emergence of third-party funding (TPF) in international arbitration has introduced the role of external investors who bear the costs of arbitration in return for a portion of the award. TPF bolsters the ability of previously disadvantaged parties to pursue justiciable and otherwise financially unconceivable claims. However, it also contrasts with the principles of justice and structural processes of integrity, independence, and fairness. There is an absence of transparency, depicted in the usage of the term “invisible stakeholders”, which contradicts with the fundamental principles of justice and procedural integrity, giving rise to a set of worrying conditions including the potential for a loss of independence and neutrality of arbitrators, the unforeseen management of arbitration, and undesired unpredictability of awards. This research analyses the emerging response from the law and institutions to the phenomenon of TPF, with a lens on the necessity of transparency in regulation. It argues the case for the necessity to make funding arrangements public to offer a balance to the arbitration system in the sense of enhancing efficiency and confidentiality, and systemic procedural legitimacy. This research strives to focus on a centralized and balanced approach to ensuring commercial confidentiality and requisite fairness in the process of arbitration.
Keywords: Third-Party Funding, Arbitration, Transparency, Conflict of Interest, Disclosure, Procedural Fairness, Arbitral Legitimacy
