By Shivansh Jolly
With the passing of time, the concept of third party funding in international arbitration has started attracting attention, and has consequently attained considerable significance. The concept involves providing monetary assistance by a third party (stranger to arbitration) to one of the parties to the concerned arbitration, generally supported by a formalized agreement laying down the terms and conditions governing the assistance provided.[1] Such agreements may entail a pre-decided incentive for a funder in the instance of a favourable award with respect to the party funded, such as remuneration to the extent of a fixed percentage of the award. The need for third party funding usually arises in cases where either the Complainant or the Respondent is financially incapable of bearing the expenses arising out of the dispute, more importantly, the costs following a possible adverse award. Another possible scenario which may invite third party funding may be an instance where a favourable result of a dispute benefits the funder in question, either directly or indirectly.Read More »