Third-party funding (TPF) is currently regarded as one of the most highly debated
topics in international arbitration. TPF can be described as providing
of funding for the costs of arbitration of a party to the proceedings by a third
party, in return for a success fee, if successful.
Third-party funding (TPF) is currently regarded as one of the most highly debated
topics in international arbitration. TPF can be described as providing
of funding for the costs of arbitration of a party to the proceedings by a third
party, in return for a success fee, if successful. The involvement of a third-party
funder in arbitral proceedings raises numerous daunting issues, such as the
absence of a uniform definition of TPF, the contentiousness of this phenomenon,
lack of empirical data as regards the mechanics of TPF, underdeveloped
industry standards, potential influence of third parties on the arbitral proceedings,
potential impact on the impartiality and independence of arbitrators, and
practical issues concerning decisions on costs in international commercial arbitration.
These questions call for clear answers for parties, counsel and arbitrators,
as they may significantly impact the arbitral proceedings and the arbitral
award. The financial involvement of third parties in arbitral proceedings
can come in various guises, which makes it difficult to distinguish between
different forms of TPF. As a result, up to date there is no uniformly accepted
definition of TPF, which would form a solid basis for regulation of TPF industry.
The aim of the article is to define TPF and to contribute to a fuller understanding
of this new phenomenon in Slovenia.
Key words: arbitration law, international commercial arbitration, arbitration,
arbitrators, arbitral proceedings, costs of arbitration, third party funding