186 NEWSLETTER 2021 Draft Provision 10 provides two alternatives on allocation of costs related to TPF (including a return to be paid to the funder) in an investment dispute. Option A excludes TPF costs from the costs of the proceedings. As per Option B, TPF costs shall be borne by the funded party. Both provisions underline the tribunal’s discretion to determine differently on cost allocation. Considerations on Code of Conduct for TPF Lastly, the UNCITRAL considers various initiatives to develop a Code of Conduct for TPF. These initiatives are likely to focus on disclosure; transparency in business conduct; limitation on return to be paid to the funder; control of the funder in the proceedings; number of claims to be funded against the same state; and due diligence against frivolous claims. Conclusion The Draft Provisions on TPF in the ISDS reflect concerns on the funding industry’s impact in the ISDS practice. The Prohibition and Restriction Models in addition to Sanctions provide a strict framework limiting funding options, which fail to answer the needs of arbitration practice, typically requiring a high amount of financial source while filing a claim. The Draft Provisions on Disclosure and Cost Allocation are important steps on the way to transparency and efficiency. TPF is argued by some to be used as an abusive tool for easier access to investment arbitration, especially for frivolous claims filed with political purposes. However, this negative bias is not necessarily true. Funders’ prior due diligence on the merits and success chance of the claim prove the other way around, since financing claims having no legal basis and borne to be dismissed before an arbitral tribunal would not be sound and sustainable for the funding business. Regulatory work on TPF is likely to continue further, in line with the ISDS reform. Arbitration institutions have followed the same path since the ICC 2021 Arbitration Rules9, and the ICSID’s fifth work9 The ICC 2021 Arbitration Rules Art. 11/7 is as follows: “In order to assist prospective arbitrators and arbitrators in complying with their duties under Articles
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