Ethics and Transparency in Third-Party Funding: Striking a Balance in International Arbitration

Third-party funding (TPF) in international arbitration leads to ethical problems with integrity, particularly with respect to conflicts of interest, transparency, and procedural fairness. This article attempts to answer whether the advantages of TPF – including better access to justice – have been balanced against risks of bias, a tendency toward arbitrator bias, or undue influence by the funder. In a comparative analysis of the institutional rules (e.g., HKIAC, SIAC) and guidelines (e.g., I.B.A. Guidelines), the article argues that a mandatory disclosure of the identity of the funders without requiring full details of the agreement terms is enhanced ethical risk mitigation while respecting confidentiality. The article concludes with a call for the establishment of standard disclosure obligations in arbitral rules manifesting impartiality and enforceability, hence facilitating the sustainable development of the TPF in the area of international arbitration.