THIRD-PARTY FUNDING IN INVESTOR-STATE ARBITRATION

Abstract: Third-Party funding refers to a financing arrangement in which a non-party entityprovides financial resources to a disputing party in return for some benefits whichis usually dependent on the outcome of the dispute before the court or tribunal.These benefits could be for pecuniary profits or for the achievement of somepolicy objectives.Whilst this funding model has been commended for promoting access to justice, ithas also been criticized for the possibility of it leading to the filing ofunmeritorious claims, its inherent conflict with the common law tort of champertyand maintenance, the disclosure of privileged information and its impact on theimplied or express duty of confidentiality owed by the parties in arbitration.This research seeks to examine the effect of the disclosure of privilegedinformation by the party seeking funding to the potential funder before or duringArbitration with a view to determining whether the said disclosure constitutes awaiver of litigation privileges or can the third-party funder be deemed to share acommon interest with the funded party? This research will be viewed from thelens of the domestic law operational in England and Wales and Nigeria in acomparative analytical fashion with a view to determining what lessons could belearnt by the developing jurisdiction.This study also makes a brief review of extant legal regime on Third-Partyfunding in both jurisdictions on the adequacy of the provisions on disclosure witha view to providing some safeguards towards promoting the third-party fundingpractice, balance competing interests amongst the parties, promote investorconfidence as well as enhance the growth of foreign direct investment in spite ofthe various existing criticisms against the third-party litigation financing model.