This article examines how the rise of third-party funding (TPF) is reshaping international arbitration and generating concerns about cost recovery and procedural balance. While funding has expanded access to arbitration, its commercialization has also created situations in which respondents face significant cost exposure when funded claimants cannot satisfy adverse awards. Through a comparative review of approaches in leading common law jurisdictions, the article highlights the contrast between the stronger accountability mechanisms available in litigation and the jurisdictional limits that prevent arbitral tribunals from addressing similar risks. The article evaluates existing regulatory measures, including disclosure obligations, capital requirements and security-for-costs practices, and considers whether they sufficiently protect non-funded parties. Finally, the article proposes a three-pronged reform strategy: empowering tribunals, in limited circumstances, to allocate costs directly to funders; adopting stronger presumptions in favour of security for costs (SFCs) where funded claimants lack independent assets; and enhancing institutional and regulatory transparency, solvency standards and cost-responsibility frameworks. The article concludes that without meaningful reform, the legitimacy of international arbitration may be weakened even as the funding industry continues to evolve.
Journal of International Arbitration