INTERNATIONAL ARBITRATION 1/3LY
FINANCING INTERNATIONAL ARBITRATION: A PRACTICAL GUIDE 19
EXECUT I VE SUMMARY In its most basic essence, third-party funding involves an exchange between the disputing party and the funder. The disputing party receives funds from the funder (often to cover the costs of the dispute) and the funder receives a return on its investment, either as an agreed sum or as a share of the proceeds of the dispute. Themain advantage of using third-party funding is the ability tominimise the ongoing cost of funding the dispute, whilst still benefiting fromany favourable award. If the case is lost, the funder covers the costs (most funding agreementswill include After the Event (ATE) insurance to cover adverse costs orders). If the case is won, the disputing partywill benefit from the proceeds, and the funder will receive the fee previously agreed in the funding agreement. If you are facing difficulties in funding your dispute, or if youwould prefer to use your funds for ventures other than litigation or arbitration, third-party funding becomes a go-to option. Such arrangements provide a practical, commercial way of managing and/or deferring the cost of running a dispute, whilst ensuring the best chance of maximising any potential returns.
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