An Investigation of the Necessity to Disclose the Existence of Contract in Third Party Funding in International Arbitration and Privilege

Impartiality and independence in the process of arbitration are basic principles, and the interests of the funder and funded parties are not so important to threaten international arbitration. Various attempts have been made to facilitate disclosure as a way of evaluating potential conflicts of interest. There are significant differences between various approaches. Some of them consider systematic disclosure an obligation, while others argue that arbitrators are the only parties that can issue orders for disclosure. Thus, it seems that systematic disclosure should be considered. Though arbitrators have to know the identity of the funding party to prevent the arbitrator conflict of interest, the non-obligatory nature of guidelines on conflict of interest in international funding, and the laws and regulation of arbitration concerning an arbitrator’s independence and impartiality, the necessity of disclosing the existence of a TPF contract and the funding party’s identity has to be considered by legislators and arbitration organizations as a way of safeguarding arbitration. Another challenge that TPF faces is the funding party’s concerns about confidentiality and privilege. Solving this challenge in a logical manner makes it necessary to pass new laws or expand and interpret the existing laws and regulations regarding the privilege to third-party funding parties. However, before achieving the above goal, signing a non-disclosure agreement and the provision of minimal information can be offered to the parties applying for TPF or the funded parties.