The impacts of third-party funding on cost decisions in investment arbitration

ABSTRACT

The involvement of Third-party Funding (TPF) in investment arbitration disrupts the balance between the parties to an arbitration. Though a party’s reliance on external funding represents its impecuniousness to participate in an arbitration, many financially sound investors take TPF to reduce the risk associated with bringing a claim or are unwilling to stick their working capital in arbitration. The existence of TPF in arbitration is a material factor in deciding an order for security for arbitration costs. The third-party funder funds an investor to initiate arbitration and gets benefits from a cost award. However, the funder does not share an investor’s responsibility to pay an adverse cost. The funder’s immunity from adverse costs aggravates the demand for security for costs in a funded arbitration. While a claimant’s reliance on TPF is considered a material factor in issuing an order for security for its cost, this consideration, counter-wise, legitimizes the cost of funding as arbitration costs. Accordingly, the funding cost can be recoverable through an adverse cost award. The TPF consideration in an order for security for costs makes the funding arrangement a part of the arbitration proceedings. If the funding position of a party is considered in deciding an application for security for costs, it deserves equal consideration in awarding adverse arbitration costs. Establishing the funding cost as arbitration costs will increase the cost of the international arbitration and unjustly transfer public money to private entities.

KEYWORDS:

• Third-party funding
• investment arbitration
• security for costs
• cost award
• funding fee

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Report of the ICCA-Queen Mary Task Force on Third-Party Funding in International Arbitration, April 2018, The ICCA Reports No. 4, 50 <https://cdn.arbitration-icca.org/s3fs-public/document/media_document/Third-Party-Funding-Report%20.pdf> accessed on 27 April 2022.

2 Canada–European Union Comprehensive Economic and Trade Agreement (CETA), Article 8.26; the Canada–Chile Free Trade Agreement (CCFTA), Article G-23.

3 See Article 24 of the Argentina-United Arab Emirates Agreement for the Reciprocal Promotion and Protection of Investments (signed on 16 April 2018).

4 B. Hanotiau, ‘The Parties’ Costs of Arbitration’ (2010) 7 Transnational Dispute Management (TDM) 213 <https://www.transnational-dispute-management.com/article.asp?key=1508> accessed 4 March 2022.

5 Gabriel Bottini and others, ‘Excessive Costs and Recoverability of Costs Awards in Investment Arbitration’ (2020) 21 The Journal of World Investment & Trade 251 <https://brill.com/view/journals/jwit/21/2-3/article-p251_3.xml> accessed 11 April 2022.

6 Commission on Arbitration and ADR, ICC Commission Report: Decisions on Costs in International Arbitration, ICC Disp. Resol. Bull. (2015) 17.

7 2016 EWHC 2361 (Comm.).

8 See Eric De Brabandere and Julia Lepeltak, ‘Third-Party Funding in International Investment Arbitration’ (2012) 27 ICSID Review 379.

9 See Doran Doeh, ‘Awards of Costs in International Commercial Arbitration: A Simple Guide to the Principles Notes’ (2019) Series 2 Vol. 1 Amicus Curiae 260 <https://heinonline.org/HOL/P?h=hein.journals/amcrae2019&i=260> accessed 29 April 2022.

10 See e.g. Vigotop Limited v. Republic of Hungary, ICSID Case No. ARB/11/22, Award (1 October 2014). <https://jusmundi.com/en/document/decision/pdf/en-vigotop-limited-v-republic-of-hungary-awardwednesday-1st-october-2014>, paras 508, 510.

11 Noah Rubins, ‘The Allocation of Costs and Attorney’s Fees in Investor-State Arbitrations’ (2003) 18 ICSID Rev 109, 110.

12 Kateryna Bondar, ‘Allocation of Costs in Investor-State and Commercial Arbitration: Towards a Harmonized Approach’ (2016) 32 Arbitration International 45 <https://academic.oup.com/arbitration/article-lookup/doi/10.1093/arbint/aiv080> accessed 29 April 2022.

13 See Art 42 of the UNCITRAL Rules.

14 Trisha Mitra, ‘Relevance of Domestic Court Decisions to the Merits in Investment Arbitration’ in Julien Chaisse and others (eds), Handbook of International Investment Law and Policy (Springer 2021) 1119 <https://doi.org/10.1007/978-981-13-3615-7_122> accessed 15 February 2023; See Article 3.42.3, Chapter 3, European Union-Vietnam Free Trade Agreement. The EU’s negotiating text for TTIP contained a similar provision; Explanation 35 to Article 9.25.2(b), Chapter 9, CPTPP.

15 Article 9.25.2(b), Chapter 9, Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

16 Explanation 35 to Article 9.25.2(b), Chapter 9, CPTPP.

17 William Kirtley and Koralie Wietrzykowski, ‘Should an Arbitral Tribunal Order Security for Costs When an Impecunious Claimant Is Relying upon Third-Party Funding?’ (2013) 30 Journal of International Arbitration 18.

18 See RSM Production Corporation v Saint Lucia, ICSID Case No. ARB/12/10, Decision on Saint-Lucia’s Request for Security of Costs, 13 August 2014; See Alan Redfern and Sam O’Leary, ‘Why it is Time for International Arbitration to Embrace Security for Costs’ (2016) 32 Arbitration International 397; José Ángel Rueda-García, ‘Third-Party Funding and Access to Justice in Investment Arbitration: Security for Costs as a Provisional Measure or a Standalone Procedural Category in the Newest Developments in International Investment Law’ in Katia Fach Gómez (ed), Private Actors in International Investment Law (Springer International Publishing 2021) <https://doi.org/10.1007/978-3-030-48393-7_7> accessed 13 April 2022.

19 See Mohamed Sweify, Third Party Funding: Profit Concentration (Edward Elgar Publishing 2023) <https://www.elgaronline.com/monochap/book/9781802208832/book-part-9781802208832-8.xml> accessed 20 February 2023; Catherine A Rogers, ‘Gamblers, Loan Sharks, and Third-Party Funders’, in Ethics in International Arbitration (Oxford University Press) <https://olrl.ouplaw.com/display/10.1093/law/9780198713203.001.0001/law-9780198713203> accessed 13 February 2023; Julien Chaisse and Can Eken, ‘The Monetization of Investment Claims Promises and Pitfalls of Third-Party Funding in Investor-State Arbitration’ (2020) 44 Delaware Journal of Corporate Law 113 <https://heinonline.org/HOL/P?h=hein.journals/decor44&i=255> accessed 12 February 2023; Florence Dafe and Zoe Williams, ‘Banking on Courts: Financialization and the Rise of Third-Party Funding in Investment Arbitration’ (2021) 28 Review of International Political Economy 1362 <https://doi.org/10.1080/09692290.2020.1764378> accessed 30 January 2023; Patricia Schoeffmann, ‘Investment Arbitration, Third-Party Funding and ISDS A Mutualistic Symbiosis? (Chapter V)’ in 2022 Austrian Yearbook on International Arbitration (2022) 353.

20 See Victoria Shannon Sahani, ‘Rethinking the Impact of Third-Party Funding on Access to Civil Justice Twenty-Fifth Annual Clifford Symposium on Tort Law and Social Policy: Rising Stars: A New Generation of Scholars Looks at Civil Justice: Articles & Essays’ (2019) 69 DePaul Law Review 611 <https://heinonline.org/HOL/P?h=hein.journals/deplr69&i=627> accessed 21 April 2022; Milan Lazić and Milica Savić, ‘Third Party Funding and Access to Justice’ (2021) 3 Revija Kopaoničke škole prirodnog prava 135 <https://scindeks.ceon.rs/article.aspx?artid=2683-443X2102135L> accessed 28 April 2022.

21 See sec. II(B).

22 See Eric De Brabandere, ‘“Mercantile Adventurers”? The Disclosure of Third-Party Funding in Investment Treaty Arbitration’ in WHV Boom (ed), Litigation, Costs, Funding and Behaviour (1st edn, Routledge 2016) <http://www.taylorfrancis.com/chapters/edit/10.4324/9781315592701-15/mercantile-adventurers-disclosure-third-party-funding-investment-treaty-arbitration> accessed 30 June 2022. José Ángel Rueda-García, ‘Third-Party Funding and Access to Justice in Investment Arbitration: Security for Costs as a Provisional Measure or a Standalone Procedural Category in the Newest Developments in International Investment Law’ in Katia Fach Gómez (ed), Private Actors in International Investment Law (Springer International Publishing 2021) <https://doi.org/10.1007/978-3-030-48393-7_7> accessed April 13, 2022.

23 Rule 14, ICSID Arbitration Rules, 2022.

24 The different forms of TPF are contingency fee arrangements, financial institution loans, corporate financing, before-the-event (BTE) litigation insurance, after-the-event (ATE) litigation insurance, inter-corporate funding and so on.

25 Rule 14, ICSID Arbitration Rules, 2022.

26 Sahani (n 20) 615.

27 See Nikolaus Pitkowitz, Handbook on Third-Party Funding in International Arbitration (Huntington, New York: JurisNet LLC, 2018); Niccolò Landi, ‘The Arbitrator and the Arbitration Procedure: Third Party Funding in International Commercial Arbitration – An Overview’ in Christian Klausegger and others (eds), Austrian Yearbook on International Arbitration (2012); See also Victoria Shannon Sahani, ‘Reshaping Third-Party Funding’ (2016) 91 Tul Rev 405; Marie Stoyanov and Olga Owczarek, ‘Third-Party Funding in International Arbitration: Is it Time for Some Soft Rules?’ (2015) 2 BCDR Int Arbitr. Rev. 171.

28 Stavros Brekoulakis and Catherine A Rogers, ‘Third-Party Funding in Investment Arbitration’ in Julien Chaisse and others (eds), Handbook of International Investment Law and Policy (Springer 2021) 1403 <https://doi.org/10.1007/978-981-13-3615-7_75> accessed 19 April 2022.

29 See Maxi Scherer, ‘Third-party Funding in International Arbitration –Towards Mandatory Disclosure of Funding Agreements?’, Dossier X of the ICC, Third Party Funding in International Arbitration, 95 (ICC Publication No 752E 2013).

30 William W Park and Catherine A Rogers, Third-Party Funding in International Arbitration: The ICCA Queen-Mary Task Force, SSRN Scholarly Paper ID 2507461 (Social Science Research Network 2014) 9.

31 See Article 8.26 of the Comprehensive Economic and Trade Agreement (CETA), 2017.

32 See Article 24 of the Argentina-United Arab Emirates Agreement for the Reciprocal Promotion and Protection of Investments (signed on 16 April 2018).

33 ‘Third-party funding of investor–state disputes: At what cost?’ <https://monitormag.ca/articles/third-party-funding-of-investor-state-disputes-at-what-cost> accessed 29 April 2022.

34 Lisa Bench Nieuwveld and Victoria Shannon Sahani, Third-party Funding in International Arbitration (Kluwer Law International BV 2016) 1.

35 See Chitty on Contracts, Vol. 1, Part 5, 16-050 (Beale H. ed., 2014) (31st ed).

36 Report of the ICCA-Queen Mary Task Force on Third-Party Funding in International Arbitration, April 2018, The ICCA Reports No. 4, 186; available at <https://cdn.arbitration-icca.org/s3fs-public/document/media_document/Third-Party-Funding-Report%20.pdf> accessed 27 April 2022.

37 Recently Australia, Singapore and Hong Kong have enacted laws by permitting TPF in international arbitration.

38 Pitkowitz (n 27) 7; See also Maya Steinitz, ‘Whose Claim is This Anyway - Third-Party Litigation Funding’ (2010) 95 Minn Law Rev 1268.

39 See Otech Pakistan Pvt. Ltd. Clough Engineering Ltd. [2006] SGCA 46; Persona Digital Telephony v Minister for Public Enterprise [2016] IEHC 187; Gils v Thompson [1993] 3 All ER 321; Unruh v. Seeberger [2007] 2 HKLRD 414.

40 Saladini v. Righellis, 687 N.E.2d 1224, 1226 (Mass. 1997) 1226-27.

41 Persona Digital Telephony Limited & Sigma Wireless Networks Limited v The Minister for Public Enterprise, Ireland and the Attorney General [2017] IESC 27.

42 April McClements and Nicola Dunleavy, ‘Analysis: Third-Party Funding of International Arbitration – Draft Rules Published’ Irish Legal News (13 January 2023) <https://www.irishlegal.com/articles/analysis-third-party-funding-of-international-arbitration-draft-rules-published> accessed February, 2023.

43 A champertous agreements is unenforceable in Ontario under R.S.O. 1897, Chapter 327 ‘An Act Respecting Champerty’.

44 See In Re 9354–9186 (formerly Bluberi Gaming Technologies Inc) and 9354–9178 (formerly Bluberi Group Inc) 2018 QCCS 1040, 16 March, 2018.

45 Gian Marco Solas, Third Party Funding: Law, Economics and Policy (Cambridge: Cambridge University Press, 2019) 221; See also Santos, Caroline Dos, ‘Third-Party Funding in International Commercial Arbitration: a Wolf in Sheep’s Clothing?’ (2017) 35 ASA Bull 918.

46 Pitkowitz (n 27) 6.

47 Duarte Henriques, ‘Arbitrating Disputes in Third-Party Funding: A Parallel with Arbitration in the Financing Sector’ (2018) Available SSRN 3285723, 10.

48 Sai Ramani Garimella, ‘Third Party Funding in International Arbitration–Issues and Challenges in Asian Jurisdictions’ (2014) 3 AALCO Journal of International Law 59.

49 Maya Steinitz, ‘Whose Claim is This Anyway - Third-Party Litigation Funding’ (2011) 95 Minn Law Rev 1268.

50 William W. Park and Catherine A Rogers, ‘Third-Party Funding in International Arbitration: The ICCA Queen-Mary Task Force’ in Austrian Yearbook on International Arbitration (2015) 14.

51 Report of the ICCA-Queen Mary Task Force on Third-Party Funding in International Arbitration, April 2018, The ICCA Reports No. 4, at 20; <https://cdn.arbitration-icca.org/s3fs-public/document/media_document/Third-Party-Funding-Report%20.pdf> accessed 27 April 2022 states ‘[h]istorically, third-party funding was considered as being primarily a mechanism by which financially distressed claimants could obtain access to justice’. See also Rueda-García (n 8); Jasminka Kalajdzic, Peter Cashman and Alana Longmoore, ‘Justice for Profit: A Comparative Analysis of Australian, Canadian and U.S. Third Party Litigation Funding’ (2013) 61 The American Journal of Comparative Law 93 <https://doi.org/10.5131/AJCL.2012.0017> accessed 28 April 2022.

52 Report of UNCITRAL Working Group III (Investor-State Dispute Settlement Reform) on the work of its thirty-seventh session (New York, 1–5 April 2019) <https://documents-dds-ny.un.org/doc/UNDOC/GEN/V19/024/04/PDF/V1902404.pdf?OpenElement> accessed 27 April 2022.

53 Milan Lazić and Milica Savić, ‘Third Party Funding and Access to Justice’ (2021) 3 Revija Kopaoničke škole prirodnog prava 135 <https://scindeks.ceon.rs/article.aspx?artid=2683-443X2102135L> accessed 28 April 2022.

54 Ibid, 144.

55 Sweify (n 19) 14.

56 Leonardo de Oliveira and Sara Hourani, Access to Justice in Arbitration: Concept, Context and Practice (Wolters Kluwer 2020) 12.

57 Sweify (n 19) 11.

58 T. Livschitz, ‘Chapter 18, Part VI: Third Party Funding in Arbitration’ in M. Arroyo (ed), Arbitration in Switzerland: The Practitioner’s Guide, 2nd ed. (Kluwer Law International, 2018), para. 26.

59 Waterhouse v. Contractors Bonding Limited, Supreme Court of New Zealand, Judgment of 20 September 2013, [2013] NZSC 89, para. 41. See also Hodges, Peysner & Nurse, Litigation Funding, 103.

60 See Sahani (n 20) 61.

61 See Brabandere (n 22).

62 Xuan Shao, ‘Disrupt the Gambler’s Nirvana: Security for Costs in Investment Arbitration Supported by Third-Party Funding’.

63 See UNCITRAL Working Group III: Investor-State Dispute Settlement Reform, Reform options <https://uncitral.un.org/en/working_groups/3/investor-state> accessed 28 April 2022. Accessed 9 April 2023.

64 See Frank J Garcia, ‘Third-Party Funding as Exploitation of the Investment Treaty System Essays: Third-Party Funding and Investor-State Dispute Settlements’ (2018) 59 Boston College Law Review 2911 <https://heinonline.org/HOL/P?h=hein.journals/bclr59&i=2953> accessed 21 April 2022. Catherine A Rogers, ‘Gamblers, Loan Sharks, and Third-Party Funders’, in Ethics in International Arbitration (Oxford University Press) <https://olrl.ouplaw.com/display/10.1093/law/9780198713203.001.0001/law-9780198713203> accessed 13 February 2023. Caroline Dos Santos, ‘Third-Party Funding in International Commercial Arbitration: A Wolf in Sheep’s Clothing?’ (2017) 35 ASA Bulletin 918.

65 Ibid.

66 Ibid.

67 Report of UNCITRAL Working Group III (Investor-State Dispute Settlement Reform) on the work of its thirty-seventh session (New York, 1–5 April 2019) at p. 5; <https://documents-dds-ny.un.org/doc/UNDOC/GEN/V19/024/04/PDF/V1902404.pdf?OpenElement> accessed 27 April 2022.

68 In Waguih Elie George Siag and Clorinda Vecchi v. Arab Republic of Egypt (ICSID Case No. ARB/05/15) the claimant entered into a contingency-fee agreement with their law firm. As per the agreement the firm entitled 20% of the final award. Siag obtained an award but refused to reimburse the law firm. When Egypt sought annulment of the award, the claimant, against the advice of their third-party funder, entered into a $80 million settlement with the Egyptian government. The claimant tried to avoid the contingency fee. In response, the law firm initiated a contract-based arbitration against the claimant, which ultimately resulted in a confidential settlement.

69 The external financer typically invests into a portfolio of claims that includes a few risky claims along with some low-risk claims. The funder only needs to succeed in a few risky claims for the return of investment with good profit.

70 Borzu Sabahi and others, Investor-State Arbitration, 2nd ed. (University Press USA - OSO 2019) 227.

71 Eskosol v. Italy, ICSID Case, Procedural Order No. 3 Decision on Respondent’s Request for Provisional Measures, 12 April 2017, para. 33.

72 Christine Sim, Security for Costs in Investor–State Arbitration, Arbitration International, Volume 33, Issue 3, September 2017, Pages 427–495. ICSID Arbitration Rule 39 states: ‘At any time after the institution of the proceeding, a party may request that provisional measures for the preservation of its rights be recommended by the Tribunal. The request shall specify the rights to be preserved, the measures the recommendation of which is requested, and the circumstances that require such measures’.

73 Eskosol S.p.A. in liquidazione v. Italian Republic, ICSID Case No. ARB/15/50, Procedural Order No. 3. (Decision on Respondent’s Request for Provisional Measures), 12 April 2017; See Julian D M Lew and others, Comparative International Commercial Arbitration (Kluwer Law International 2003) 60.

74 See Víctor Pey Casado and Fundación Presidente Allende v. Republic of Chile, ICSID Case No. ARB/98/2, Decision on the adoption of provisional measures requested by the Parties, 25 September 2001, paras 78, 84, <https://www.italaw.com/sites/default/files/case-documents/ita0629.pdf> accessed 9 April 2023.

75 See Emilio Agustín Maffezini v. Kingdom of Spain, ICSID Case No. ARB/97/7, PO No. 2, 28 October 1999, esp. paras 3, 24–26, <https://www.italaw.com/sites/default/files/case-documents/italaw7939_0.pdf>.

76 Kazmin v. Latvia, ICSID, Procedural Order No. 6 (Decision on the Respondent’s Application for Security for Costs), 13 April 2020, para. 66 and 68.

77 Dirk Herzig v. Turkmenistan, ICSID, Decision on the Respondent's Request for Security for Costs and the Claimant’s Request for Security for Claim, 27 January 2020, para. 84.

78 Sweify (n 19) 165.

79 Aren Goldsmith and Lorenzo Melchionda, ‘Third Party Funding in International Arbitration: Everything You Ever Wanted to Know (but Were Afraid to Ask) Comment Column’ (2012) 2012 International Business Law Journal 221 <https://heinonline.org/HOL/P?h=hein.journals/ibuslj2012&i=55> accessed 24 June 2022.

80 RSM Production Corporation v Saint Lucia, ICSID Case No ARB/12/10, Decision on Saint Lucia’s Request for Security for Costs dated August 13 (13 August 2014), Assenting reasons of Gavan Griffith, para 16; Jean Kalicki, ‘Security for Costs in International Arbitration’ (2006) 3 Transnational Dispute Management.

81 Guaracachi America, Inc. and Rurelec PLC v. The Plurinational State of Bolivia, UNCITRAL, PCA Case No. 2011-17, Procedural Order no. 14, March 11, 2013, para. 3.

82 British Columbia (Minister of Forests) v. Okanagan Indian Band [2003] 3 S.C.R. 37, para 26.

83 Gary B Born, International Commercial Arbitration, 2nd ed (Kluwer Law International 2014) 2496; See Ch. Bogart, ‘Third-Party Financing of International Arbitration’, b-Arbitra (2017), no. 2, 323; W. Kirtley and K. Wietrzykowski, ‘Should an Arbitral Tribunal Order Security for Costs When an Impecunious Claimant Is Relying upon Third-Party Funding?’ (2013) 30 J Int Arb 28.

84 Eskosol S.p.A. in liquidazione v. Italian Republic, ICSID Case No. ARB/15/50, Procedural Order No. 3 (Decision on Respondent’s Request for Provisional Measures), 12 April 2017.

85 Tokios Tokelés v. Ukraine, ICSID Case No. ARB/02/18, Order No. 1 dated 1 July 2003, para. 7.

86 RSM Production Corporation v. Saint Lucia, ICSID Case No. ARB/12/10, Decision on Saint Lucia’s Request for Security for Costs dated 13 August 2014 (RSM v. St Lucia), para. 72.

87 Dirk Herzig as Insolvency Administrator over the Assets of Unionmatex Industrieanlagen GmbH v Turkmenistan, ICSID Case No ARB/18/35, Decision on Security for Costs (27 January 2020) (‘Herzig January Decision’) para. 79–81.

88 Rueda-García (n 8) 4; See, e.g. Grynberg v. Grenada, ICSID Case No. ARB/10/6, Tribunal's Decision on Respondent’s Application for Costs (14 October 2010); Guaracachi Am., Inc. v. The Plurinational State of Bolivia, UNCITRAL, PCA Case No. 2011-17, Award (31 January 2014); Commerce Grp. Corp. v. The Republic of El Salvador, ICSID Case No. ARB/09/17, Award (14 March 2011).

89 RSM Production Corporation v Saint Lucia, ICSID Case ARB/12/10, Decision on Saint Lucia’s Request for Security for Costs (13 August 2014).

90 Armas v. Repnblica Boliviariana de Venezuela, PCA Case No. 2016-08, Decision on Request for Security for Costs, para. 261 (20 June 2018).

91 Unionmatex Industrieanlagen GmbH v. Turkmenistan, ICSID Case No. ARB/18/35, Decision on the Respondent’s Request for Security for Costs and the Claimant’s Request for Security for Claim, paras. 53–58 (27 January 2020).

92 Muhammet Çap & Sehil Inşaat Endustri ve Ticaret Ltd Sti v. Turkmenistan, ICSID Case No. ARB/12/6, Procedural Order No. 3 dated 12 June 2015 (Sehil v. Turkmenistan), para. 12.

93 Rueda-García (n 8).

94 Miriam Harwood and others, Third-Party Funding: Security for Costs and Other Key Issues (Social Science Research Network 2017) SSRN Scholarly Paper 3047873 111 <https://papers.ssrn.com/abstract=3047873> accessed 13 April 2022.

95 RSM v. St Lucia, Assenting Reasons of Gavan Griffith dated 12 August 2014, para. 14.

96 X SARL, Lebanon v. Y AG, Germany, International Court of Arbitration of the International Chamber of Commerce, Procedural Order No. 3 dated 4 July 2008, 28(1) ASA Bulletin 37 (2010), para. 21.

97 See Simon Bachmann, ‘The Impact of Third-Party Funding on Security for Costs Requests in International Arbitration Proceedings in Switzerland Why and How Third-Party Funding Should Be Considered under the Swiss Lex Arbitri’ (2020) 38 ASA Bulletin <http://kluwerlawonline.com/JournalArticle/ASA+Bulletin/38.4/ASAB2020144> accessed 23 April 2022.

98 T. Livschitz, ‘Chapter 18, Part VI: Third Party Funding in Arbitration’ in M. Arroyo (ed), Arbitration in Switzerland: The Practitioner’s Guide, 2nd edn. (Kluwer Law International 2018) para 71.

99 Julien Chaisse and Can Eken, ‘The Monetization of Investment Claims Promises and Pitfalls of Third-Party Funding in Investor-State Arbitration’ (2020) 44 Delaware Journal of Corporate Law 113, 142 <https://heinonline.org/HOL/P?h=hein.journals/decor44&i=255> accessed 12 February 2023.

100 Kardassopoulos and Fuchs v. Georgia, ICSID Case Nos. ARB/05/18 and ARB/07/15, Award, 3 March 2010, para. 691.

101 RSM Production Corporation v. Grenada, ICSID Case No. ARB/05/14, Annulment Proceeding, Order of the Committee Discontinuing the Proceeding and Decision on Costs, 28 April 2011, paras. 68–69.

102 See ATA Constr., Indus. and Trading Co. v. Hashemite Kingdom of Jordan, ICSID Case No. ARB/08/2, Annulment Proceeding, 34–35 (11 July 2011).

103 Julien Chaisse and Can Eken, ‘The Monetization of Investment Claims Promises and Pitfalls of Third-Party Funding in Investor-State Arbitration’ (2020) 44 Delaware Journal of Corporate Law 113, 143 <https://heinonline.org/HOL/P?h=hein.journals/decor44&i=255> accessed 12 February 2023.

104 Rule 47 ICSID rules, ICSID Convention Ar. 61(2).

105 Article 38 UNCITRAL Rules, PCA Rules, Article 42(1), Article 31(3) ICC Rules, Article, Art. 38 Swiss Rules, Article 28 LCIA Rules.

106 Robert H Smit and Tyler B Robinson, ‘Cost Awards in International Commercial Arbitration: Proposed Guidelines for Promoting Time and Cost Efficiency’ (2009) 20 American Review of International Arbitration 267.

107 See Article 37(4) of the 2012 ICC Arbitration Rules <http://www.iccwbo.org/Products-and-Services/Arbitration-and-ADR/Arbitration/Rules-ofarbitration/Download-ICC-Rules-ofArbitration/ICC-Rules-of-Arbitration-in-severallanguages/>; or Article 28(2) of the LCIA Arbitration Rules <http://www.lcia.org/Dispute_Resolution_Services/lcia-arbitration-rules-2014.aspx#Article> 28. For a discussion on the ICC’s practice, See W Laurence Craig and others, International Chamber of Commerce Arbitration, 3rd ed. (Oceana Publications 2000) 395. See also Gary B Born, International Commercial Arbitration (Kluwer Law International 2009) 2497.

108 Micha Buhler, ‘Awarding Costs in International Commercial Arbitration: An Overview’ (2004) 22 ASA Bull 249.

109 Supplier v. First distributor, Second Distributor, ICC Case No. 7006, Final Award of 1992, 4 ICC Bull. (May 1993) 49, 49.

110 Price Waterhouse SARL and PW Conseil SARL v. PricewaterhouseCoopers International Limited, English High Court (Queen’s Bench, Commercial Court), Order of 15 November 2010, Claim No. 2010 Folio 619.

111 J Sullivan, ‘Essar v. Norscot: Are the Costs Associated With Third Party Funding Recoverable?’ (2018) 15 Transnational Dispute Management (TDM) 3 <https://www.transnational-dispute-management.com/article.asp?key=2577> accessed 4 March 2022.

112 Ibid.

113 Jonas von Goeler, Third-Party Funding in International Arbitration and its Impact on Procedure (Kluwer Law International 2016), 368.

114 Kabir Duggal and Gerrit Niehoff, ‘The Conflicting Landscape Relating to Costs in Investor-State Arbitration’ (2016) 5 Indian J Arbitration L 164; Wendy J. Miles, ‘Costs Allocation in Investor-State Arbitration’ (2014) 80(4) Arbitration 413, 414–15; Matthew Hodgson, ‘Costs in Investment Treaty Arbitration: The Case for Reform’ (2014) 11(1) Transnational Dispute Management 1, 1.

115 See Sweify (n 19).

116 Article 42(1), UNCITRAL Arbitration Rules 2010.

117 Maxi Scherer and Danielle Morris, ‘The Award’, in The ICSID Convention, Regulations and Rules (Edward Elgar Publishing 2019) 1245; Arthur W Rovine, ‘Allocation of Costs in Recent ICSID Awards’, in Practising Virtue (Oxford University Press 2015) 661 <https://oxford.universitypressscholarship.com/10.1093/acprof:oso/9780198739807.001.0001/acprof-9780198739807-chapter-41> accessed 27 April 2022.

118 Scherer and Morris, Ibid 1245.

119 Susan D Franck, ‘Rationalizing Costs in Investment Treaty Arbitration’ (2010) 88 Washington University Law Review 769 <https://heinonline.org/HOL/P?h=hein.journals/walq88&i=777> accessed 25 April 2022.

120 Doeh (n 9).

121 See Kateryna Bondar, ‘Allocation of Costs in Investor-State and Commercial Arbitration: Towards a Harmonized Approach’ (2016) 32 Arbitration International 45, 47 <https://academic.oup.com/arbitration/article-lookup/doi/10.1093/arbint/aiv080> accessed 29 April 2022.

122 ‘ICSID Arbitration Procedure’, in Lucy F. Reed and others, Guide to ICSID Arbitration (Kluwer Law International 2010) 123–157.

123 Franck (n 92) 777.

124 CDC Group plc v. Republic of Seychelles, ICSID Case No. ARB/02/14, Decision of the Ad Hoc Committee on the Application for Annulment of the Republic of the Seychelles (29 June 2005); Repsol YPF Ecuador, S.A. v. Empresa Estatal Petroleos del Ecuador (Petroecuador), ICSID Case No. ARB/01/10, Decision on the Application for Annulment (8 January 2007). ‘ICSID Arbitration Procedure’, in Lucy F. Reed and others, Guide to ICSID Arbitration (Kluwer Law International 2010) 156.

125 ICC Commission Report on Decisions on Costs in International Arbitration (2015) <https://iccwbo.org/content/uploads/sites/3/2017/05/icc-commission-report-on-decisions-on-costs-in-international-arbitration.pdf> accessed 1 June 2021.

126 See Thomas H. Webster Bühler, Michael W., Handbook of ICC Arbitration: Commentary, Precedents, Materials, 3rd ed. (Sweet & Maxwell 2014) para. 37–57.

127 Third-Party Funding in International Arbitration: Report of the ICCA-Queen Mary Task Force on Third-Party Funding in International Arbitration (ICCA 2018) 60 <https://www.arbitration-icca.org/publications/ThirdPartyFundingReport.html> accessed 1 September 2021; O. Svoboda and J. Kunstýř, ‘Third Party Picks Up the Bill? Costs Issues Relating to Third Party Funding in Investment Arbitration’ (2016) 7 Czech Yearbook of Public and Private International Law 434 427 <https://papers.ssrn.com/abstract=3241269> accessed 24 June 2022.

128 Sullivan (n 115).

129 Esssar v. Norscot 2016 EWHC 2361 (Comm) para. 5.

130 Ibid, para. 55.

131 Ibid, para. 59.

132 Sullivan (n 111) 8.

133 Doeh (n 9) 271.

134 Essar Oilfields Services Ltd v Norscot Rig Management Pvt Ltd [2016] EWHC 2361 (Comm) (EWHC (Comm)) [68].

135 Ibid, 67.

136 See Maxi Scherer and Danielle Morris, ‘The Award’ (2019) The ICSID Convention, Regulations and Rules 122 <https://www.elgaronline.com/view/edcoll/9781786435231/9781786435231.00039.xml> accessed 13 May 2023.

137 Sullivan (n 111) 5.

138 Thomas W. Wälde, ‘“Equality of Arms” in Investment Arbitration: Procedural Challenges’ (2010) Arbitration under International Investment Agreements: A Guide to the Key Issues 161, 175.

139 BGH – I ZB 88/19: Prozessuale Waffengleichheit als Teil des verfahrensrechtlichen ordre public, Federal Court of Justice of Germany, I ZB 88/19, 23 July 2020, in Jörg Risse and others (eds), SchiedsVZ | German Arbitration Journal (Kluwer Law International; Verlag C.H. Beck oHG 2021, Volume 19 Issue 1) 46.

140 Roque J. Caivano, ‘The Conduct of the Proceedings’ in Fabricio Fortese (ed), Arbitration in Argentina (Kluwer Law International; Kluwer Law International 2020) 143.

141 RSM Production Corporation v Saint Lucia, ICSID Case No ARB/12/10, Decision on Saint Lucia’s Request for Security for Costs dated August 13 (13 August 2014), Assenting reasons of Gavan Griffith, para. 14.

142 Harold v. Smith (1860) 5 H. & N. 381, 385.