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Third party funding for international commercial arbitration

Third party funding for international commercial arbitration

Third party funding for international commercial arbitration

Companies in the UK and abroad often turn to international commercial arbitration as a form of alternative dispute resolution. This can be more beneficial than pursuing potentially expensive litigation through the court system.

It is essential for any party seeking to resolve a commercial dispute using arbitration to have sufficient resources to fund their case, whatever the outcome. However, there are those who do not have the sufficient resources required and may have difficulty financing their case.

Third party funding for international commercial arbitration can help clients gain access to the legal advice they need. This can also help to fund their legal case in situations where they may not have been able to previously.

Annecto Legal fills the gap when clients require access to professional legal advice on any business-related issue. We help to remove financial uncertainties and the need for balance sheet protection against unforeseen legal expenses at a low cost. We understand that legal disputes can be disruptive and inconvenient and that covering the cost of the legal support you need is not always easy.

What is international commercial arbitration?


International commercial arbitration is a form of alternative dispute resolution for commercial legal disputes. Both parties will agree to have their disputes resolved through an impartial third-party arbitrator as part of an arbitral tribunal rather than through a court.

International commercial arbitration is typically used in international business transactions to resolve disputes relating to contracts, sales, and other commercial matters. The arbitration process is private and typically less formal than court proceedings.

The use of arbitration can be mandatory if it is stipulated in a contract that the parties have previously agreed. Alternatively, it may be entered into voluntarily if both parties agree.

The final decision of an arbiter can be either legally binding or non-binding. This will depend on what has been agreed in advance. A binding decision cannot usually be appealed and can be enforced by the courts, if necessary.

International commercial arbitration allows parties to tailor the process to meet their specific needs and to choose arbitrators with expertise in the relevant subject matter. International commercial arbitration is often quicker and less expensive than going to court. This is because the rules of evidence and procedure are less formal, and the process takes less time.


What is third party funding for international commercial arbitration?


Third-party funding for international commercial arbitration refers to the practice of a third party, typically a specialised funding company, providing financial support to one of the parties in a dispute. This funding can cover expenses such as legal fees, expert witness costs, and other expenses related to the arbitration.

The third-party funder usually receives a share of any arbitral awards or settlements obtained in the dispute in exchange for their funding. The funder will typically seek in the region of a fifth to a third of any damages recovered. That means that the party to the arbitration keeps up to 80% of the reward, having taken none of the risk. In larger cases, the costs might be such that the party actually keeps well over 90% of the returns.

Third-party funding (TPF) can help level the playing field in legal disputes, particularly where one party has greater financial resources than the other. It also allows parties to pursue their claims even if they lack the financial resources to do so otherwise.

With the help of third party funding, parties can avoid taking any financial risks. The funder pays for everything in return for a share of the damages. If the case fails, the funder bears all the costs – you pay nothing.

There is currently no obligation to disclose the existence of TPF in arbitration proceedings in England. However, this may differ depending on the country proceedings are taking place in.


What are the benefits of third party funding for international commercial arbitration?


Third-party funding in international commercial arbitration provides several benefits, including:

  1. Access to justice: Third-party funding allows parties with limited financial resources to pursue their claims and defend their rights in arbitration proceedings.
  2. Reduced financial risk: With third-party funding, a funded party is relieved of the financial burden of funding the arbitration process and are not required to bear the costs of the proceedings.
  3. Increased case viability: Third-party funding may make it economically viable for parties to pursue otherwise uneconomical claims.
  4. Improved case management: Third-party funders typically have a strong financial interest in the outcome of the case. They can provide resources and support to help ensure a favourable outcome.
  5. Confidentiality: Third-party funding arrangements are typically confidential and do not need to be disclosed to the tribunal or other parties.

In summary, third-party funding agreements can level the playing field in international commercial arbitration. They can provide greater access to justice for parties who may not have the resources to fund proceedings themselves.


How can Annecto Legal assist?


Annecto Legal accesses scores of providers of international commercial arbitration and litigation funding and can help you get the access to justice you need for your case. If necessary, we can also recommend specialists in the particular area of law that you need. This is relevant to both UK and international commercial arbitration.

Securing third party funding of arbitration is not straightforward. Therefore, having a partner that understands the concerns of financiers is crucial. They can assist in how your case is presented and can negotiate the right deal for you.

Get in touch with an expert member of our team to find out which commercial arbitration cover is the right arbitration funding choice for you.

Call us today 0800 612 6587, or fill in the form at the top of the page to find out how we can assist on your case.

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* Annecto Legal can only assist on case where the loss is in excess of £100,000, with the exception of data breach claims. If you need assistance on a claim worth over £100,000, please get in touch using our form or the details below:

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