CIArb’s Guidelines on Third-Party Funding:

Third-party funding (TPF) has become a defining feature of international

arbitration. Under this arrangement, an outside funder (essentially, who

are not parties to the arbitration) provides the financial means for legal

proceedings, typically in return for a share of any recovery. This offers

claimaints who might otherwise be deterred by costs, the opportunity to

pursue arbitration on a more equal footing. However, TPF also raises

legitimate concerns regarding transparency, conflicts of interests, and

cost allocation.

To address these challenges, the Chartered Institute of Arbitrators (CIArb)

issued its Guidelines on Third-Party Funding in International Arbitration in

September 2025. While this soft-law instrument does not impose binding

rules, it does offer a structured framework to assist parties, counsel, and

tribunals in dealing with the complexities of TPF.

Purpose and Scope

The Guidelines

’

main objective is to promote fairness and transparency in

arbitral proceedings while recognising the legitimate role of third-party

funding. While acknowledging that third-party funding may promote

access to justice by empowering resource-limited parties to pursue well-

founded disputes, CIArb highlights the need for safeguards to avoid

potential misuse, maintain party autonomy, and protect the credibility of

the arbitral process. Importantly, the guideline is presented as a non-

binding but practical tool, designed to be applied with flexibility.

The guidelines recognise and contain specific forms of funding such as

portfolio funding, monetisation, law firm financing, adverse costs

insurance, as well as for the structuring and renegotiation of funding

agreements.Disclosure of Funding Arrangements

One of the CIArb Guideline

’

s core recommendations requires parties to

disclose the existence of any third-party funding agreement early and to

reveal the identity of the funder. Crucially, this duty does not require the

disclosure of senstitive commercial terms by the funder. It is worth

mentioning that the Guidelines contain specific recommendations

regarding NDAs and also highlight the aspect of consent with respect to

information-sharing.

Conflicts of Interest

According to the Guidelines, arbitrators should consider and assess

potential conflicts of interest not only relation to parties and their counsel

but also in connection to third-party funders. This approach is consistent

with the IBA Guidelines (2014, General Standard 6(b)), which explicitly

treat funders as equivalent to parties for the conflict-checking purposes.

Costs and Security for Costs

A recurring question in arbitral practice is whether the existence of third-

party funding should influence the tribunal’

s apprach to costs. The

Guideline emphazises that the mere presence of funding does not, by

itself, justify a different approach to costs or create a presumtion of

financial weakness.

On security costs, the Guideline (Sections 9.3 and 15) recognizes that

tribunals may grant such measures, but only in exceptional circumstances.

Funding alone is insufficient to justify an interference of financial

weakness or an order for security. Tribunals should instead weigh specific

factors like enforcement risks, the party

’

s ability to pay, and the presence

of insurance protection.

This framework reflects developments in leading jurisdictions such as

Singapore and Hong Kong, where legislation both regulates TPF and

explicitly empowers tribunals to order security for costs when justified.Broader Context

The CIArb Guideline forms part of a wider global effort to strenghen

transparency in arbitration. Institutions such as the ICC (Art. 11(7)) and the

ICSID (Rule 14) now require parties to disclose the identity of funders. In

parallel, legislative reforms in Singapore and Hong Kong have formally

recognized and regulated the practice of third-party funding, while

expressly empowering tribunals to order security for costs where

appropriate.

Comparative Institutional Approaches

Various other arbitral institutions have introduced similar detailed

provisions on third-party funding. The SIAC Rules 2025 (Rule 38) oblige

parties to disclose funding, allow tribunals to demand further details, and

permit its consideration in costs. The HKIAC Rules 2018 (Art.44) likewise

require disclosure of a funder

’

s identity. Both reflect the wider consensus

that third-party funding is acceptable only when paired with

transparency and safeguards.

Ultimately, third-party funding has become a permanent feature of

arbitration, yet its continued growth depends on clear and

transparent safeguards. While not binding, the CIArb’

s Guideline

provides a practical direction for promoting openness and

consistency in arbitral proceedings. Alongside institutional and

legislative reforms, it shows that funding can broaden access without

undermining fairness and trust in arbitration. It is however

recommended that due diligence be conducted when selecting a

funder, especially with respect to financial stability, conflicts

management, and anti-money laundering compliance.