Revue - Les Cahiers de l'Arbitrage N°1-2023 - 27

DOCTRINES - DÉBATS
professional funders to fund a particular claim; and (iv) potentially, counsel.
Critically, Rule 14 also applies to funding given to States to defend a claim and to
claimants defending a counter-claim.
A party's disclosure obligation is contingent on the receipt of funds from the
non-party for the pursuit of a claim or defence of a proceeding. This can take the
form of a donation or grant, or funding in return for remuneration dependent on the
outcome of the case. This will cover the traditional third-party funding arrangements
from professional funders who cover the legal fees and costs of the proceeding in
return for repayment of the legal fees and a portion of any damages awarded.
Since disclosure is contingent on the receipt of funds, certain arrangements may
fall outside of the scope of Rule 14(1). For example, a party who obtains insurance
to cover an adverse costs award would arguably not need to disclose that fact or
the identity of the insurer. This is because insurance agreements typically provide
for the payment of funds only after a trigger event has happened. In the case of
an adverse costs award, this will only occur after the arbitration has concluded. 68
Non-pecuniary assistance, such as legal advice provided on a pro bono basis
would likewise not trigger the notification obligation in Rule 14(1).
The last sentence of Rule 14(1) introduces an additional notification requirement
if the third-party funder is a juridical person. In such cases, the party's notification
must " include the names of the persons and entities that own and control that
juridical person. " 69
As all professional funders are juridical persons, this additional
requirement is likely to be triggered frequently. Lastly, Rule 14(4) specifies that
the tribunal may order disclosure of further information regarding the funding
agreement and the non-party providing the funding. 70
If the purpose of Rule 14
was to avoid conflicts of interest, granting the tribunal power to order disclosure
of the funding agreement exceeds the intended purpose of the Rule. Counsel for
States are generally interested in obtaining additional information regarding the
terms of funding and, if possible, the funding agreement itself. Claimants (and the
funders) generally prefer that the details regarding the funding agreement and the
funding agreement itself remain confidential. It is therefore likely that Rule 14(4) of
the 2022 Rules will give counsel for States an opportunity to test the interpretation
of the Rule and attempt to obtain additional details or even a copy of the funding
agreement. Future cases will show how (and in what circumstances) lawyers will
argue that additional information about the funding agreement will be required,
how counsel for claimants object to those arguments, and how tribunals ultimately
rule on the issue.
Practical considerations
The introduction of Rule 14 recognises that third-party funding is a reality in
ISDS and is likely to become more common in ICSID arbitrations. It is precisely
for this reason that it is unfortunate that the wording of Rule 14 is ambiguous in
68. See J. Boykin and A. Bedrosyan in: Happ/Wilske, ICSID Rules and Regulations 2022, 2022,
Rule 14, ¶ 19.
69. 2022 ICSID Arbitration Rules, Rule 14(1).
70. 2022 ICSID Arbitration Rules, Rule 14(4).
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Revue - Les Cahiers de l'Arbitrage N°1-2023

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