Final Year Law Student,
The Northcap University, Gurugram
Kashyap & Kashyap Law Firm, Gurugram
With the ever-increasing popularity of international arbitration, several companies saw an opportunity of easy investment with the promise of grand returns. Third party funding, although not a new phenomenon, has been quickly gaining popularity in the world of international arbitration, which has been facilitated by the lax to non-existent regulations governing them. The ability of the funders to strategically invest in certain disputes while being able to hide behind the curtain of confidentiality clauses makes it an extremely attractive and lucrative field of investment. This paper aims to study the challenges associated with the involvement of third-party funders in international arbitration, specifically focusing on the confidentiality issues and disclosure requirements. The main challenge associated with this branch of funding pertains to the substantial increase in the risk of a conflict of interest with the arbitrators, the funding party and the parties. The paper systematically deals with the confidentiality of both the parties as well as the funder and moves onto to the debate on disclosure requirements in arbitration. This paper aims to understand the requirement of regulations and if the present status quo should be maintained.
Keywords: Third party funding, international arbitration, confidentiality agreement, arbitration award, funding party