2016.ANA METIN ingilizce.01

the recognition or enforcement thereof. This is an area of importance

while assessing third party financing.

The scenarios where a third party funder may endanger the inde-

pendence of an arbitrator may vary. When an arbitrator of a dispute,

where a third party funder exists, acts as counsel to another party in

another dispute funded by the same third party; or when repeated

appointments of an arbitrator by parties funded by same third parties

are concerned, doubts may arise as to the impartiality of the arbitrator.

These concerns raise questions as to whether an obligation to auto-

matically disclose third party funders should be imposed, and, if yes,

what the scope of such disclosure should be. However, it could be stat-

ed that there is a general inclination towards accepting a disclosure

obligation. The regulations on this disclosure obligation is further

assessed below.

Cost Issue

Third party financing also raises the question as to whether the

arbitral tribunal may order security for costs against third party fun-

ders. This is especially important in the question concerning whether

the prevailing party could recover its legal costs from the funder of the

other party. These matters result in questioning the jurisdiction of the

tribunal.

Unlike the discussions governing disclosure obligations due to

impartiality and independence of arbitrators, there isn’t a general con-

sensus governing the discussions on costs and security for costs

Need for Regulation

When the present rules, non-binding regulations and other instru-

ments are assessed, it may be observed that third party funding is an

area yet to be regulated in international arbitration.

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NEWSLETTER 2015

For further information on this discussion and relevant jurisprudence, please see

González-

Bueno

and

Lozano

; and

Paula Gibbs, Chapman Tripp

, Third party funding in international

arbitration – lessons from litigation?

party-funding-in-international-arbitration-lessons-from-litigation/ (accessed on 22 September

2015).