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CIArb Features

Third-Party Funding in Arbitration - Questioning its Scope in India

15 August 2017 Features
By Kumudini Chattopadhyay


With the recent advent of the Arbitration and Conciliation (Amendment) Act 2015 (‘Code’)[1] and the establishment of the MCIA[2], India has yet again exhibited a pro-arbitration behaviour.[3]

Nevertheless, a progressive mechanism such as Third Party Funding (‘TPF’) in arbitration still remains unexplored in India. Consequently, a party with a potential case may not be in a financial position to even bring a claim due to the high costs, especially in a developing country where not every organisation is financially armed to battle its own dispute.

A third party funder who receives a percentage of the compensation awarded to the winning party may agree to fund the dispute.

However, in the absence of any express legal provisions permitting TPF, funders have opted to remain outside the Indian market.

Sections of the article

  • Part I of the article explains why it is necessary to incorporate TPF in the legislation of India;

  • Part II makes an attempt to understand the reasonable apprehensions that may have prompted India to remain mute with regard to legalising TPF;

  • Part III shows how the existing laws already make adequate scope to legalise TPF in India.

 ‚ÄčRead the full article

About the Author

Kumudini Chattopadhyay has worked as a legal associate at Youssef and Partners, Cairo. She has previously worked in the legal team of Amereller Legal Consultants, Cairo and Schlumberger Asia Services Limited, India.