Volume I Issue III (September, 2020 to December, 2020)
The increasing significance of international commercial transactions has brought arbitration to the forefront of alternate dispute resolution methods. With the emergence of this means of dispute settlement, the concept of “third-party funding in arbitration” has also generated interest among several countries. In the past few years, there has been an upsurge of cases with third-party funders around the globe. This begs for an important question — why is India silent on this issue?
Confidentiality is one of the hallmark considerations among parties when choosing arbitration as their preferred dispute resolution mechanism. There are various reasons for this. Primarily disclosure of information such as trade secrets, pricing policies, technical know-how, production methods or profit margins could harm a party’s standing among its competitors. It could also have an impact on the image of a company in front of the public at large. Additionally, it may expose the financial situation of a company, the existence of a defective product, situations or agreements that could compromise the image of a company in front of the public and competitors. While parties to an arbitral agreement are at liberty to enter into confidentiality agreements enforceable during the arbitral proceedings however often these agreements do not bind the agents, representatives, third parties, arbitrators or the administrative staff of the tribunal. However, the scope of the duty of confidentiality as well as who is confined within the contours of such duty are points of contention in both International Commercial Arbitration (“ICA”) and International Investment Arbitration.
Sovereign Immunity in International Commercial Arbitration: A Clampdown on Enforcement of Foreign Awards? by Ashik Shoukath & Pratyusha Ivaturi
The “Doctrine of Sovereign immunity/ State immunity” is a principle of international law which grants immunity to a State from the adjudication and enforcement of a claim in a foreign Court. This principle is founded on the concept that all states are equal and hence, the Courts of one State do not have the jurisdiction over another State. Regarding the extent of immunity enjoyed, the said doctrine has given way to two schools of thought namely — a) absolute immunity and b) restrictive immunity. The absolute immunity approach holds that all acts of a State are completely immune from the adjudication and enforcement in a foreign Court. This approach hinges on the rule that a state’s sovereignty cannot be violated by subjecting it to a foreign Court, unless it specifically consents to submit it to the latter’s jurisdiction.
Ethical Concerns Surrounding Third-Party Funding in Indian Arbitration: The Need for Legislation by Riya Narichania & Akshita Tiwari
The concept of third-party funding (“TPF”) is unchartered territory in the Indian legal system. It is the financing of arbitration expenses by “strangers to the arbitration” which enables the claimants to access justice in meritorious cases, in exchange for a monetary share in the final award. It proves to be an unconventional investment opportunity with almost concrete returns for the funder, Third-party funders act as enablers for cash-strapped parties to access justice, which would be unobtainable in other circumstances. TPF is not alien to common law jurisdictions; it has been legalised by several countries such as the United Kingdom, United States of America, Australia and Singapore.