When Third Party Funding Just Isn’t Quite Enough
What makes this decision interesting was the fact that the claimant’s prosecution of the case was supported by a third party funder under a funding arrangement that did not provide means for covering the possibility of an adverse cost award against the claimant.
According to the IAReport report, based on this fact, and the fact that claimant was insolvent, a majority of the Tribunal ordered the claimant to post security in the amount of US$3 million or to provide an irrevocable bank guarantee of an equivalent amount.
This decision marks another arc in the evolution of the treatment of third-party funding in international arbitration, and claimants will undoubtedly weigh the various options available to them in an attempt to stave off requests for security for costs, including posting security, bank guarantees, as well as insurance policies and other financial vehicles.
Click the link to read Assets of Unionmatex v. Turkmenistan.
Contacts
- Related Practices