182 NEWSLETTER 2021 Regulation Models for Third Party Funding in Investment Arbitration - Part I* Tilbe Birengel Introduction The United Nations Commission on International Trade Law (“UNCITRAL”) Secretariat published the Draft Provisions on Third-Party Funding (“TPF”) in Investor State Dispute Settlement (“ISDS”).1 The Draft Provisions give an insight of host states’ long-lasting concerns on the influence of the TPF2 in treaty-based arbitrations.3 It is argued by some states that TPF is used as an abusive tool for easier access to arbitration, especially for frivolous claims filed with political purposes. By the Draft Provisions, it is aimed to fill the regulation gap, and raise transparency in practice as a part of the UNCITRAL Working Group III’s ISDS Reform proposals dating back to August 2019.4 Once finalized, these provisions may be implemented through inclusion into investment treaties at bilateral or multilateral levels.5 Their modified versions may be incorporated into arbitration rules and domestic legislation. * Article of June, 2021 1 For access to the Draft Provisions: Third-party funding | United Nations Commission on International Trade Law. 2 For further details on TPF see Orak Çelikboya, Leyla: “Third Party Funders in Arbitration”, Erdem & Erdem Newsletter, September 2015, http://www.erdemerdem.av.tr/en/insights/third-party-funders-in-arbitration 3 Ballantyne, Jack: UNCITRAL publishes proposals to reform funding of ISDS, GAR, https://globalarbitrationreview.com/isds-reform/uncitral-publishes-proposals-reform-funding-of-isds 4 UNCITRAL Report of Working Group III (ISDS Reform), 38th Session, Vienna, 14–18 October 2019, para. 94, https://documents-dds-ny.un.org/doc/UNDOC/ GEN/V19/104/76/PDF/V1910476.pdf?OpenElement. 5 The Draft Provisions will be open for comments until 30 July 2021.
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