Third Party Funding for Litigation in Dispute Resolution Mechanism and its Recent Developments in International Commercial Arbitration

The most contentious mechanism in International Commercial Arbitration is the ‘Third Party Funding for Litigation' (hereinafter referred to TPFL) though, it goes around with the present practices amongst most of the developed economies of the world. The practice of TPFL has been considered as promoting a solution in the field of accessing justice particularly, for those who have been experiencing financial-constraint to pursue the international commercial arbitration proceedings. International Commercial Arbitration Proceedings being transnational are of high-valued disputes hence, ineluctably tends to be a costly episode for the parties involved. Another direct impact of the said mechanism lies in reducing both valued-time and workloads of the parties to the proceedings as well. TPFL may have the appearance to share one of the objectives of Litigation funding however, TPFL, in international arbitration proceedings facilitates financially-constraint parties to have access to speedier methods of dispute resolution in exchange for national court's intervention that are burdened with the arrears of cases in regular dispute resolution system. And again it comes to the aid of those who are financially-stressed or prioritize corporate time as highly valued one. The distinct domain of so-called Litigation Funding (e.g., Champerty or Maintenance) invokes the question of public policy hence scopes of frivolous becomes higher while TPFL, as stated above, in international arbitral proceedings is having distinct objectives, i.e., to enable financially-distressed parties to access to justice through third party before arbitral tribunals, to save valuable corporate-time, and a mode of financing. The exhaustive due diligence conducted by funders prior to entering into funding agreements would go a long way towards ensuring that only meritorious claims receive funding. The present discourse confines the review of the fundamentals of TPFL practices that ultimately contributes in delivering justice in both national and international commercial arbitration as long as it is left to self-governance.