A Study On The Third Party Funding System In International Commercial Arbitration

Third-party funding is a recent phenomenon for international commercial arbitration.However,since 2011,international conferences on third-party funding of arbitration have increased significantly,and the number of related reports,articles,and treatises has also grown rapidly.These signs indicate that with the prosperity of the entire industry,third-party funding of arbitration has attracted widespread international attention and has begun to move from the field of practice into the field of research.However,because people are still exploring this issue,the arbitration court is usually focused on solving specific and specific issues.These decisions by arbitration court are currently well summarized in many articles.Therefore,in this article,we will use two specific cases to explore the most important viewpoints and decisions in two of the core areas,namely the cost guarantee and disclosure issues that frequently occur in international commercial arbitration procedures.This article’s exploratory research on third-party funding for arbitration will help China to correctly position third-party funding and promote the healthy development of arbitration,help arbitration institutions to actively adjust relevant rules to regulate their application in arbitration procedures,and help investors to make reasonable The legal development of relevant businesses also helps arbitration participants to correctly understand and use third-party funding for arbitration.The article is divided into four parts,and its main contents are as follows:The first part explores the meaning of third-party funding and analyzes the current development of third-party funding in the field of international commercial arbitration.In addition,a more detailed analysis of third-party funded participants was conducted,including customer types,funder types,and funding relationship types.The second part explores the relationship between third-party funding and cost guarantees in international commercial arbitration,centered on RSM Production Corporation v.Saint Lucia.One of the more embarrassing issues in international commercial arbitration procedures is that the arbitration court does not have any control over the investors.After various explorations and discussions,the researchers believe that the arbitration court can solve this problem by ordering cost guarantee under appropriate circumstances.RSM Production Corporation v.Saint Lucia is a case concerning the guarantee of arbitration costs,and the court took into account the third-party funding factor when issuing the cost guarantee order,so we discussed the positive and negative effects of third-party funding on guarantees.The third part focuses on the issue of conflicts of interest between third-party funding and arbitrators in international commercial arbitration,centering on Muhammet Cap v.Turkmenistan.The generally accepted principle in international commercial arbitration is that arbitrators must maintain impartiality and independence throughout the litigation process and disclose all relevant circumstances.Therefore,failure to disclose the potential conflict of interest between the arbitrator and the third-party funder may compromise the validity of the tribunal’s award.After the practice of international commercial arbitration,it is finally believed that the way to resolve conflicts of interest is to formulate disclosure rules to disclose the conflicts of interest that may arise in arbitration.Therefore,we systematically elaborate the disclosure system of third-party funding from five aspects: who discloses,to whom,the scope of disclosure,the disclosure time,and the disclosure obligations.The fourth part discusses the necessity and feasibility of introducing a third-party funding arbitration system in China’s inland areas and the issues that should be paid attention to when introducing this system.There are three reasons for the necessity of introducing this system in China’s inland.First,the requirements of a market economy;second,the needs of arbitration practice;finally,the requirements of arbitration development trends.The feasibility of incorporating the third-party funding system into the domestic and international commercial arbitration system is twofold.First,the legislation on domestic third-party funding of arbitration activities is in a blank stage;second,the technical level of legislation has a basis for reference.While China actively introduces third-party funding,first of all,it is necessary to improve the guarantee rules for temporary measures;second is to improve the disclosure rules of third-party funding relationships.