How to build a disclosure system to meet the difficulties posed by third-party funding (TPF) in arbitration and compare regulations in Hong Kong and Singapore.
Below are the key variables that determine a third-party funder’s assessment of the value of an arbitration claim. They are:
(1) Jurisdiction—what is the strength of the legal arguments raised by the respondent? Why might the tribunal resist seizing jurisdiction?
(2) Merits—how strong is the factual matrix supporting the theory of liability? Will the case involve considering open points of law?
(3) Quantum—how much of the loss flows from the respondent’s conduct? Did the claimant have an operational track record to support a lost profits claim?Alternatively, were there proven valuable assets held by the claimant that have been confiscated or impaired by the respondent’s conduct?
(4) Recovery—what is the credit standing of the respondent? Do they have a presence in the Organisation for Economic Co-operation and Development (OECD) world which can be attached? Are they a sovereign state adopting a “won’t pay” policy?
What is the size of the claim relative to the size of the respondent?
(5) Duration—how long will it take to get an award? What is the likelihood of a bifurcation of proceedings to hear jurisdiction separately from merits? Might the damages assessment be heard separately? Is there much scope for an appeal, annulment, or revision hearing?