Funding Agreement Arbitration

While the third-party element may lead to the dismissal of the complaint (if the Brunswick Regional Court agrees with Volkswagen), the discussion should not tarnish the view of third-party funds as such. In this case, it is not the third-party funds themselves that are considered inadmissible, but the combination of debt collection and third-party funds. Unlike the business model used by Financialright, traditional third-party financing does not include the element of debt collection; Instead, the funded party pursues the claim. Since not all information provided by the client to the third-party funder is covered by the privilege or professional secrecy, it is strongly recommended that the client and the third-party funder enter into a confidentiality agreement at the beginning of the relationship. Generally speaking, the search for financing agreements by third parties and related documents is subject to several rules, including those of the arbitration in question (as expressly defined in the corresponding arbitration agreement or by inclusion by reference to other administrative provisions), national law and / or federal law. Other procedural rules, such as the International Bar Association Rules on The Taking of Evidence in International Commercial Arbitration, may also have been adopted by the parties or may be considered guidance by the arbitral tribunal. In principle, the arbitration procedure is contractual and, therefore, the rules applicable outside of national and/or federal law vary mainly on the basis of the terms of the arbitration agreement. And of course, the applicable national and federal law may vary by jurisdiction. [3] In all cases, the first task is to identify the rules in force. The arbitration centres in Singapore and Hong Kong have recently adopted the English approach by abolishing the traditional doctrines of maintenance and champerty for third-party funds in arbitration. However, unlike England, these jurisdictions have also introduced laws providing for supervision of the sector.

The IBA Guidelines on Conflicts of Interest in International Arbitration, as revised in 2014, provide that any legal or natural person having a direct economic interest in the arbitral award or required to compensate a party for the arbitral award to be drawn up may be considered to have the identity of that party. Therefore, a conflict of interest may arise, for example, in a scenario where, in A, an arbitrator is the applicant`s lawyer in B and is funded by the same funder as the applicant in A. .