Who’s Pulling the Strings? Disclosure of Third-Party Funding Agreements in International Arbitration

Third-party funding (hereinafter TPF) has emerged as a more significant method for financing international arbitration, permitting underfunded claimants to pursue valid claims and enabling parties to handle procedural risks without exhausting their liquidity.Unlike insurance, loans and contingency or conditional-fee arrangements, TPF has developed from past restrictions on maintenance and champerty into a swiftly growing commercial activity.Certain issues related to TPF have been tackled by institutional regulations mandating the disclosure of third-party funders' existence and identity; nonetheless, the regulatory structure still appears disjointed and insufficient.This article explores the legal and ethical issues associated with TPF, highlighting the conflicts of interest impacting arbitrators, the triangular relationship between lawyers, clients and funders that can lead to control over strategy and influence on the proceedings, as well as the effects of TPF on cost distribution and security for costs.It examines current institutional methods of disclosure and contends that, under specific conditions -especially when funders exert control, maintain extensive termination rights, or limit liability for negative costs -arbitral tribunals need access to significant funding terms.The article ends by supporting measured disclosure authority and broader institutional oversight to protect procedural fairness and the validity of arbitration processes.