Mohammad A. Odeibat

Type of the article: Research Article

Abstract
The article highlights that third-party funding is a major issue in investment-State dispute resolution because it can fund worthwhile claims but also empowers a private party without legal status over proceedings. It presents an analytical model to manage third-party funding within investment-State arbitration by examining funding through the question of control: who drives the claim. Building upon doctrinal insights from existing literature, institutional materials, and case studies, this study aims to reinterpret funding through the lens of influence. The evidence suggests that control over proceedings does not inherently spring from the availability of third-party funds, but from material influence exercised over five critical arbitration stages: case selection, legal budget, settlement, tribunal constitution, and enforcement of arbitral awards. Thus, the article develops a six-part model incorporating five aspects of third-party control. The procedural points are mandatory disclosures at the initial arbitration stage and triggered disclosure of funding-related contract clauses. It proposes requiring proof of financial resources and segregating funded assets, while rebuttably presuming security for legal expenses if any discovered cost award would outweigh claimant finances. It also advocates formal protection for the client to direct claim management and settlement decisions, mandating similar disclosure for funded respondent actions. Supporting arguments identify three situations justifying the security for costs presumption and two instances where funding disclosures should be implemented. The study concludes that investment-State arbitration becomes genuinely equitable only when attention shifts from formal party status to third-party procedural influence.