CIETAC Hong Kong’s Guidelines for Third-Party Funding in Arbitration and the CIETAC International Investment Arbitration Rules featured in the Report of the ICCA-Queen Mary Task Force on Third-Party Funding in International Arbitration
The Guidelines for Third-Party Funding in Arbitration released by CIETAC Hong Kong Arbitration Center, and the CIETAC International Investment Arbitration Rules, released by CIETAC in 2017, have been featured in the Report of the ICCA-Queen Mary Task Force on Third-Party Funding in International Arbitration (“the Report”). The Report which was launched on 15 April 2018 at the ICCA Congress in Sydney acts as a reference for parties, counsel, and arbitrators to address the issues that arise in the course of an arbitration that involves an element of third-party funding. The Report is the joint effort of the ICCA-Queen Mary Task-Force on third-party funding (the Task Force) that comprises of arbitrators, inhouse and external counsels, government representatives, academics, and third-party funders.
The Guidelines for Third-Party Funding in Arbitration released by IETAC Hong Kong Arbitration Center (“the Guidelines”) were formulated to set out certain principles and conduct ,which parties and arbitrators are encouraged to observe when there is an element of third party funding involved. The first draft of the Guidelines was drafted by a Working Group consisting of 10 highly experienced arbitration practitioners and was ntroduced in response to the Third-Party Funding in Arbitration Consultation Paper issued by the Law Reform Commission of Hong Kong in 2015. The Task Force used the definition of third-party funding
provided in the Guidelines to formulate a broad working definition of third-party funding in Chapter 3 of the Report. The Report also acknowledges the fact that CIETAC Hong Kong Arbitration Center is among the first institutions to directly address the topic of third-party funding.
The CIETAC International Investment Arbitration Rules (“the Investment Arbitration Rules”) is the first set of investment arbitration related rules to be introduced by an arbitration institution hailing from China. The Rules have been formulated and released at a time when the Belt and Road initiative by People’s Republic of China has gained momentum. The Investment Arbitration Rules have been mentioned in Chapter 4 of the Report which addresses the issue of disclosure and the potential conflicts of interest faced by arbitrators due to the involvement of third-party funding. The Chapter claims CIETAC to be one of the few institutions that has addressed the issue of disclosure with the help of the Investment Arbitration Rules, and highlights the requirement of the systematic disclosure of third-party funding enshrined in the Rules. This position adopted by CIETAC is unique as other institutions leave the issue to the discretion of the arbitrators.
The above shows that CIETAC’s significant contribution and efforts to address the issue of third-party funding in arbitration has been well recognized by ICCA and other global stakeholders. This is a proud moment for CIETAC and CIETAC Hong Kong Arbitration Center.