Obtaining third-party Funding for international Arbitration is a complex process. However, the disclosure of third party funding has become common in international arbitration proceedings.

When it comes to searching for third party funding, prospective litigants often lack information on the requirements and knowledge of what is required to fund arbitration.

For an international arbitration to be successfully funded, it is important to consider some of these –

1. Search for a Third Party Funder

Finding a specialized third-party funding companies is not an easy process. After all, they are not extremely common and form a rather narrow and closed market. They are competitive amongst one another, although funding terms are largely similar.

 In order to present their case, preferably accompanied by a legal memorandum of a reputable arbitration practitioner, a litigant need only email a third-party funder attesting the merits of an international arbitration.

2. Seek Out a Reputable Law Firm

The international arbitration law firm plays an imperative role during the funding process. Most litigants are required by third-party funders and contact third-party funders frequently through counsel.

Some firms may charge for the time spent by lawyers on preparation and correspondence with the funder may be considerable, but then demand to be compensated by the third-party funders for their time, which makes successful funding more difficult. However, there are reputable firms such as Aceris may not charge.

Prospective litigants must be aware that –

• To obtain funding, it will take a significant effort on the part of lawyers for them and they will usually be required to have a lawyer in place to assist them during the due diligence procedure.
• The fees to be charged by lawyers may determine if a case will be funded, aslegal fees tend to be the greatest cost of resolving a dispute by international arbitration.

3. Evaluate the Risk

Prospective litigants are often not aware of the complexity of their cases. Their emotional attachment to a dispute may make a case look stronger than it is according to the applicable law. However, it is important that prospective litigants should be honest and disclose all relevant information to the potential funders. Any illegal action undertaken by the litigants might negatively affect the decision of the funders to invest. More than one counsel or litigant has also been sued for failing to disclose all relevant information to third-party funders in the past.

After assessing all possible implications, third party funders always take a strict action. They meticulously analyze any possible risk or uncertainty prior to granting the necessary funds. Many third-party funding analysts are former lawyers themselves, with considerable knowledge of international arbitration law and procedure.

4. Know the Probability of Success of an Arbitration

In actual, there is no confirmation that only very strong cases will be funded. It is said that only one of twenty arbitrations seeking funding is funded. Thus, while choosing a funder, it is imperative to know the highest possible chance of success.

The chances of winning the case need to be very high even if the chance of success is 100% for an international arbitration, and to include considerable compensation.

For more information, visit https://www.acerislaw.com.