| Md. Mamonor Rashid |
 International commercial arbitration is the mechanism toward settling business disputes between or among transnational parties instead of through the courts. 2017 was a bustling year for International commercial arbitration. Taking a walk down memory lane, it was observed innovative contestants and fresh business entity inflowing the game, institutions implementing and allowing new regulations and policies, and have had some latest obstacles and disputes to undertake.
Third-party funding in international commercial arbitration is the growing feature and prominent subject in international arbitration. It involves a third party funder paying for the costs of a legal proceeding, partly or fully, in return for a share of the profits if the claim is successful. In case of an adverse award, the funder’s funding is lost. Third party funders are basically investment funds seeking a high-quality return. Professional third-party funders focus on high-value claims with minimum claim sizes in the millions of dollars. They are highly selective in the claims they choose to fund, given the need to provide attractive returns to their investors. Third-party funding is well recognized and established in some key jurisdictions, including the UK and Australia, and is starting to broaden to other regions. Formerly, Singapore proscribed third-party funding and Hong Kong did not have a legal skeleton explicitly authorizing it. However, in January 2017, Singapore passed amendments to the Civil Law Act which legalized third-party funding in international commercial arbitration and related proceedings. Further, in March 2017 Hong Kong introduced the Arbitration and Mediation Legislation (Third Party Funding) (Amendment) Bill 2016 to the legislative council, which recognized the principles and practices that third-party funders in Hong Kong will be vital to pursue moving frontward. These procedures comprise both financial and ethical standards. This is a welcomed development, bringing Singapore and Hong Kong in line with other common law jurisdictions. The current economic environment notwithstanding, Asia’s trade and business sectors are projected to continue to grow. There will be regional demand for legal services, including dispute resolution. Third-party funding is a shrewd move and will help to reinforce their place as dispute resolution hubs and will aid the proliferation of commercial arbitration in the region. Singapore and Hong Kong are in the position to meet this demand and that will continue to be the premier international dispute resolution hub of choice. The new third-party funding regime represents an important development for parties involved in Singapore- and Hong Kong-seated international arbitrations. Parties in these two important seats now have access to the same financing and risk-management tools available in other major international arbitration centres. The forthcoming foreign investment is one of the reasons why third-party funding in arbitration, especially in Bangladesh, will be in the spotlight in the near future. Third-party funders will increasingly turn their attention towards arbitration in Bangladesh. Bangladesh is a contracting state to the New York Convention and is also one of the signed and ratified the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention), which entered into force in the country on April 26, 1980. The absence of regulation concerning third-party funding for the moment should be seen as an impediment. Third-party funding in Bangladesh is not different from third-party funding elsewhere in the world, it should be seen as a fertile ground entirely exploitable to fund appealing claims. Therefore, now is the high time to amend the Arbitration Act 2001 and to put some constructive modifications that have already been adopted by the other competitive countries around the world. Bangladesh can be a strategic host for third-party funders wishing to set foot in Asia. Now it can be said that third-party funding is a precious mechanism which has permitted parties to get access to justice which may in the past have been out of their reach. Mr. Rashid has completed his Master of Laws by thesis on International Commercial Arbitration from University Utara Malaysia. He currently working as an Associate of CM&A LCP. Mr. M Rashid is a Member of Singapore International Arbitration Centre (SIAC), Singapore, and Young International Arbitration Group, LCIA, London. He can be reached at [email protected] This Article was previously Published in the the Daily Observer , Please see the link: https://observerbd.com/details.php?id=116112 |
