Third Party to Pick up the Bill? Costs Issues Relating to Third Party Funding in Investment Arbitration
Abstract
This article assesses the recent development of third party funding in international investment arbitration and its influence on rules governing costs, specifically security for costs and allocation of costs. Third party funding has recently become a widespread practice in the area of investment disputes since the costs of the disputes keep rising.
Tribunals in investment arbitrations face difficult questions when one of the parties to the dispute is funded by a third party. The involvement of a third party funder can, especially in terms of security for costs and allocation of costs, play a significant role.
The authors of this article focus, in the absence of explicit provisions in investment protection treaties, on the current practice of tribunals. The authors conclude that the regulation has not yet caught up with the growing practice of cost issues in regards to third party funding and, although an intense debate has begun, the question of the specific form and extent of the regulation is yet to be settled.