Abstract

This article describes the emergence of a new category of actors in the social arbitration field, namely third-party financiers, with a focus on the possible ethical implications for investment arbitration proceedings. Third-party financiers are actors-service providers specialized in the financing of procedures in which they are associated with the result and the redemption of arbitral awards which they ensure the execution. The emerging phenomenon of third-party financing in the social field of international arbitration raises various ethical concerns, which have not been regulated by the legal framework of most arbitral institutions. By exploring the various interactions between third-party funders and other actors in the social field of international arbitration, the article intends to highlight the ethical implications that the phenomenon of third-party funding may have on both the lawyer-client relationship and the independence and impartiality of arbitrators. It is argued that the introduction of the new phenomenon of third-party funding into the dispute may disrupt the arbitral process. Third-party funding is particularly likely to lead to situations of conflict of interest for arbitrators, which may affect the final award and exacerbate the crisis of legitimacy of the arbitral process. This article explores the various ethical concerns that it raises, and proposes some thoughts on the need for precise regulation of this emerging phenomenon in the contemporary arbitration panorama. It argues that, for ethics to prevail, disclosure of the identity of the third-party funder and the funding agreement should be encouraged in certain circumstances. This is the way to preserve the integrity of the proceedings and the impartiality and independence of the arbitrators.