Accountability of corporations’ activities

notification of third-party funding in the new ICSID Arbitration Rules

Abstract

The new Arbitration Rules, approved by ICSID in 2022, introduced the concept of notification of third-party funding, which allows for the identification of whether one of the litigants has received financial support to initiate or develop the litigation. This form of funding is widely used in the field of international arbitration, with both support and opposition. Supporters argue, among other points, that an investor without the necessary funds to initiate a procedure can use this tool to defend its interests and protect its property. In contrast, critics claim that this figure may encourage the filing of unfounded claims, using litigation as an improper form of pressure against States. Although the obligation to notify is formally imposed on both parties in the procedure, in practice its primary recipients will be the investor companies, thus formalizing scrutiny from States towards corporations. In this way, this paper presents the original proposal to include the notification in the Arbitration Rules, details the comments made by Ibero-American countries and analyzes the approved clause.