International Arbitration

IDENTITY WITHOUT ACCOUNTABILITY: RETHINKING THIRD-PARTY FUNDING REGULATION Nidhi Choube, 8th Semester, 4th year, BBALLB (Hons.) Student at GD Goenka University, (India) Somya Shrita, 4th Semester, 2nd year, LLB (Hons.) Student at GD Goenka University, (India) Download Manuscript doi.org/10.70183/lijdlr.2026.v04.277 Third-party funding (TPF) has moved from the margins to the mainstream of cross-border corporate arbitration, gradually reshaping the allocation of power in high-value disputes. However, the existing regulatory framework remains confined to a narrow conception of transparency, largely limited to disclosure of the funder’s identity, without examining the substantive terms of funding arrangements. This paper argues that such an approach is insufficient. In practice, third-party funders often influence litigation and settlement strategies, including decisions on whether to pursue or resolve disputes, despite lacking formal accountability within the corporate structure. Essentially, there are three challenges that have not been explored much in relation to this change. Firstly, the funding agreement may give the party significant control over the proceedings, including the veto over the settlement, without any institutional or national limitation on this control. Secondly, the current conflict of interest regimes is inadequate to reflect the complex relationships between the arbitrators and the funders in the international arbitration community. Thirdly, there is the breach of confidentiality in cross-border disclosure of sensitive information to the funders, especially where different standards are applied in different jurisdictions. TPF facilitates the influence of external actors over significant outcomes without corresponding fiduciary obligations toward the corporation. Focusing on regulatory approaches adopted by leading arbitration centres and drawing from high-value funded disputes, the paper proposes a three-pillar framework combining corporate law obligations, strengthened institutional rules, and a model international provision. The objective is to realign arbitration practice with principles of corporate accountability in an increasingly globalised dispute resolution landscape.