Funding International Arbitration

Introduction 7
Sherina Petit
Stewarts
Nosherwan Vakil
The 36 Group

I. The growth of the funding market in the UK and beyond 9
Stavros Brekoulakis
National University of Singapore; 3 Verulam Buildings
Julian DM Lew KC
Twenty Essex; Queen Mary University of London
Simona Valkova
Independent tribunal secretary

1. History and development of third-party funding 9
2. What is ‘third-party funding’? 14
3. The growth of the third-party funding market 18
4. Moral and ethical considerations 23
5. Conclusion 27

II. Types of litigation funding options available 33
Matthew Amey
TheJudge

1. Introduction 33
2. Insurance 34
3. Monetisation 38
4. Broker role 39

III. Pre-funding considerations 43
Harshiv Thakerar
Asertis

1. Analysis of risk 43
2. The funding agreement 48
3. Conclusion 50

IV. Regulation of the funding market 51
Matthew Lo
Tom Steindler
Exton Advisors

1. Introduction 51
2. Background 53
3. Self-regulation 53
4. Judicial oversight 54
5. Arbitration 55
6. Solicitors’ professional and ethical obligations 56
7. Contingency fee arrangements 56
8. PACCAR: LFAs as DBAs 57
9. Litigation risk insurance 58

V. Legal barriers to funding 61
Moeiz Farhan
Vasanti Selvaratnam KC
36 Stone

1. Introduction 61
2. Historic background: maintenance and champerty 61
3. The current position 63
4. The international perspective 70

VI. Disclosure of information 73
Ewelina Kajkowska
Hogan Lovells International LLP
David J Kerstein
Arcadia Finance LLC
Nicole Silver
Ignite Specialty Risk

1. Confidentiality and privilege 73
2. Conflicts of interest 76
3. Disclosure of funding arrangements to other parties 78

VII. Costs and security for costs 83
Steven Friel
Woodsford

1. Introduction 83
2. Adverse costs in arbitration: institutional rules 85
3. Funder’s liability for costs 86
4. Security for costs in litigation that follows on from arbitration 88
5. Security for costs in investor-state arbitration 88
6. One party’s liability for another party’s funding costs 92

VIII.The role of funders during arbitration proceedings 95
Hasan Tahsin Azizagaoglu
Ayse Yazir
Bench Walk Advisors
Nishant Nath Singh
Stewarts

1. Introduction 95
2. Legal services providers versus financial services providers 96
3. Contemplating funding prior to or at the start of the proceedings 97
4. During the course of the proceedings 98
5. Conclusion of the proceedings 100

IX. Funding and enforcement 103
Craig Arnott
Michael Redman
Mick Smith
Burford Capital

1. Introduction 103
2. Issues for award enforcement in commercial arbitration 105
3. Issues for award enforcement in investor-state arbitration 106
4. Asset recovery and funded award enforcement 109
5. Assignment of arbitral awards 110
6. Conclusion 113

X. Avoiding and managing disputes with funders 115
Julian Chamberlayne
Stewarts

1. Introduction 115
2. Identifying and selecting a suitable funder 115
3. Negotiating heads of terms and the funding agreement 119
4. Managing the relationship between claimant and funder 121
5. Managing the budget and dealing with budget variations/overage 123
6. Settlement dynamics in funded cases 124
7. Disputes relating to funded cases 125

About the authors 129

About Globe Law and Business 139