MARKET COMMENTARY 37
The level of control over litigation is a consideration to bear inmind also outside of England. The Florida Third District Court of Appeal reached a similar decision in Abu-Ghazaleh v. Chaul 7 . The Court of Appeal reversed the trial court’s denial of the defendants’ motion for attorneys’ fees and court costs and remanded for a determination as to the amount of fees. The relevant legal test appliedwas whether the funders had ‘party’ status within themeaning of the applicable Florida Statutes for attorney’s fees. It held that the two funders controlled the litigation to the extent that theywere deemed parties to the litigation. As the instant case was a fee shifting state, the funders were found directly liable for attorney’s fees and court costs. It practice, it seems that unless a TPF can be bound to the arbitration agreement, costs orders against TPFs would hardly ever be capable of beingmade. This is because arbitration, by its consensual nature, means that the parties entering into an arbitration agreement opt for arbitration as the sole dispute resolutionmechanism. There would need to be a logical fallacy to circumvent the fundamental principles of arbitration consensus. The SIAC draft Investment Arbitration Rules 8 , currently under consultation try to address this issue by including the following provision: “The Tribunal shall have the authority to order in its award that all or a part of the legal or other costs of a party be paid by another party or, where appropriate, any third-party funder” . It is however unclear in practice howa party obtaining this order in its favour could enforce such an order under the New York Convention, given that because the norm is that a TPF is not a party to the arbitration, and therefore not bound by the arbitration agreement. Is there an alternative route available in seeking an order against a TPF via a national court jurisdiction? It is not possible to fully deal with this issue within the confines of this article, however examining this solely froman English jurisdictional perspective, a successful party in an arbitrationwith its seat in Englandmight apply to the national court for a costs order against the TPF. Pursuant to Article 44(1) English Arbitration Act 1996 (“The Act”), ‘[u]nless otherwise agreed by the parties, the court has for the purposes of and in relation to arbitral proceedings the same power of making orders about thematters listed belowas it has for the purposes of and in relation to legal proceedings’ . The corresponding list containedwithin Article 44(2) of The Act does not include costs orders. The general principle contained in Article 1(c) of The Act, namely that ‘inmatters governed by this Part the court should not intervene except as provided by this Part’ indicates that the English courts do not have the jurisdiction tomake this type of order. Since no such cases on this issue have come to light, it is yet to be seen hownational courts in England as well as in other jurisdictions will respond.
5 Kantor, in ICC Dossier third-party funding 57, 57; compare Guaracachi America, Inc. (U.S.A.) and Rurelec plc (United Kingdom) v. Plurinational State of Bolivia, PCA Case No. 2011-17, Procedural Order No. 13 of 21 February 2013, para. 6 (‘unless “The Funder” will bear costs, the Respondent considers that it would be put in a precarious situation that would require an order for cautio judicatumsolvi’). 6 For example 55% share was acceptable in Stocznia Gdanska SA v Latreefers Inc (no. 2) [2001] BCC 174. 80%was toomuch in a Canadian case, Operation 1 v Phillips (2004) 248 DLR (4th) 349. 7 FloridaThirdDistrictCourtofAppeal,Decisionof2December2009,Nos.3D07–3128,3D07–3130,36So.3d691. 8 SIAC Draft Investment Arbitration Rules, para 34.
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