Public Law Researsh

The Pros and Cons of Third Party Funding in the International Investment Arbitration Regime

Document Type : Research Paper

Authors

Alireza Mirveisi 1
Mehdi Zakerian Amiri 2
Mohammad Ali Abdollah Zadeh 3

1 Ph.D Student, International Relations, Faculty of Law, Theology and Political Sciences, Islamic Azad University Science and Research Branch, Tehran, Iran

2 Associate Professor, International Relations, Faculty of Law, Theology and Political Sciences, Islamic Azad University Science and Research Branch, Tehran, Iran

3 Assistant Professor, International Relations, Faculty of Law, Theology and Political Sciences, Islamic Azad University Science and Research Branch, Tehran

https://doi.org/10.22054/qjpl.2022.58548.2563
Abstract
There is a growing stream of critics who see investment arbitration in favor of foreign investors and as a negative force as opposed to sustainable development. The phenomenon of third-party funding and its use in investment arbitration has increased such concerns. Third-party funding is basically the payment of all or a part of the arbitration costs of one of the parties of dispute by a third party funder which in return, the funder receives a percentage of the output of the award if successful. The purpose of this article is to explain and analyze the theoretical differences between pros and cons of third-party funding regarding the access to justice, screening mechanism for the claims, and the financial consequences on the host state. In this article, the advocates see third-party funding as a means of access to justice for aggrieved investors in investment claims, while the adversaries refering on the profitability of third-party funding, see this method in arbitration a form of wealth transfer from public sector to private corporations and also refer to the asymmetric structure of the investment arbitration regime as well as the risks arising from the transfer of management and control of arbitration process to the third party funders.

Keywords

Investment Arbitration Regime
Third Party Funding
Access to Justice
Screening Mechanism for Claims
Subjects
  • پاکزاد، کاملیا، تأمین مالی توسط ثالث در داوری تجاری بین‌المللی (تهران: انتشارات جاودانه-جنگل، 1399).
  • صفایی، حسین، حقوق بین‌الملل و داوری‌های بین‌المللی (تهران: نشر میزان، 1375).
  • میرویسی، علیرضا، حقوق سرمایه‌گذاری خارجی در چارچوب معاهدات دو جانبه سرمایه‌گذاری (تهران: انتشارات پریس، 1393).
  • مولوی، مهسا، سرمایه‌گذاری ثالث در داوری بین‌المللی (تهران: انتشارات چتر دانش، 1399).

 

مقاله‌ها

  • بهمئی، محمدعلی و اسدی محمدمهدی، «چالش‌های اساسی تأمین مالی داوری بین‌المللی توسط شخص ثالث»، پژوهش حقوق خصوصی، دوره 9، شماره 34، 96، (1400).
  • شیروی، عبدالحسین و انصاری، اعظم، «چالش تعهد بر افشا در تأمین مالی هزینه‌های داوری تجاری بین‌المللی توسط ثالث»، مجله مطالعات حقوقی، دوره یازدهم، شماره چهارم، (1398).
  • فروغی، غلامعلی، «گزارش سی و هشتمین نشست کارگروه سوم آنسیترال»، وزارت امور خارجه، تهران، اداره کل حقوقی و بین‌المللی، (1398).
  • کریمی، عباس و قربانی زلیخانی، مجید، «سرمایه‌گذاری ثالث در داوری تجاری بین‌المللی»، فصلنامه تحقیقات حقوقی، شماره 91 ، (1399).

رساله

  • سید کریمی، سیدعلی، تأمین مالی داوری بین‌المللی توسط اشخاص ثالث، پایان‌نامه کارشناسی ارشد، دانشکده حقوق دانشگاه شهید بهشتی، (1395).

 

References

Books

  • Gus Van Harten, Investment Treaty Arbitration and Public Law (Oxford: Oxford University Press, 2007).
  • Jonas Von Goeler, Third-party Funding in International Arbitration and Its Impact on Procedure (Alphen aan den Rijn, The Netherlands: Kluwer Law International, 2016)
  • Tienhaara, The Expropriation of Environmental Governance: Protecting Foreign Investment at the Expense of Public Policy (Cambridge: Cambridge University Press, 2009).

Articles

  • Brabandere De, Eric& Lepeltak, Julia, “Third Party Funding in International Investment Arbitration”, Grotious Centre for International Legal Studies, Working Paper 2012/1 (2011-2012).
  • Columbia Center on Sustainable Investment, “Impacts of the International Investment Regime on Access to Justice”, September (2018).
  • Garcia, Frank & Hough, Kirrin, “Third Party Funding International Investor - state Arbitration”, American Society of international Law, Vol. 22, No.16, (2018).
  • Khouri, Susanna, Hurford Kate & Bowman, Clive, “Third Party Funding in International Commercial and Treaty Arbitration – a Panacea or a Plague?”, A Discussion of the Risks and Benefits of Third Party Funding’, Transnational Dispute Management, 8(4), (2011).
  • “Law Reform Commission of Hong Kong”, Third Party Funding for Arbitration Sub-Committee Consultation Paper, 22 December (2018).
  • “Queen Mary Task Force Report”, On Third-Party, International Council for Commercial Arbitration (ICCA), 2 December (2018).
  • UNCITRAL Working Group III, “Report of Working Group III” (Investor- State Dispute Settlement Reform) on the Work of its Thirty - Forth Session A/Cn.9/930, 19 December 2017.

Websites

  • Code of Practice for Third Party Funding of Arbitration, 2018.
  • Civil Law (Amendment) Act 2017.
  • Comprehensive Economic and Trade Agreement, 22 December 2018.
  • ICSID Case No. ARB/08/5, Decision on Counterclaim 7 February 2017.
  • ICSID Case No. ARB/08/5, Decision on the Environmental Counterclaim 11 August 2015
  • ICSID Case No. ARB/10/7.
  • IMF Bentham, FY2018 Full year results invetor presentation, 2018.
  • UNCTAD, World Investment Report (WIR) 2018, 27 January 2019.
  • UNCTAD, Investment Policy Hub, Argentina -As Respondent state, 2018.

Cases

  • Excalibur Ventures v Taxas Keystone and otbers [2016] EWCA civ1144.
  • Libanaco Holding Co. Limited v republic of Turkey ICSID Case No. ARB/06/08 Decision on preliminary Issues of 23 June 2008.
  • Manuel Garcia Armas and others v Venezuela, PCA Case No. 2016-08 Procedural order 9, 20 June 2018.
  • RSM production Corporation v Saint Lucia ICSID Case No. ARB / 12/ 10 Decision on Saint Lucia’s Request for Security for Costs.
  • Urbaser v Argentina, ICSID Case No. ARB/ 07/ 26. Award, 8 December 2016; David Aven v Costa Rica UNCITRAL, Final Award, 2018.

 

Public Law Researsh
Volume 24, Issue 77
Winter 2023
Pages 47-79

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