Date of Award
9-2021
Document Type
Dissertation
Degree Name
Doctor of Juridical Science (SJD)
Abstract
With the growth of cross-border commercial transactions in an increasingly connected world, the use of international commercial arbitration is on the rise. Considering the cost and complexity of international arbitration proceedings and the growing demands on parties to manage the potentially high costs and risks associated with arbitration, a new emerging third party funding (TPF) mechanism has proved to be a practical solution for dealing with such concerns. Essentially, TPF not only provides claimants with financial support in order to gain access to arbitration, but also opens up commercial options for parties to mitigate risks, control the financial exposure associated with arbitration, manage cash flow, and take legal fees and expenses off the company’s balance sheet. Additionally, the involvement of the funder can add real value to the management and resolution of arbitration claims, by allowing parties to have access to the necessary expertise and specialists’ skills, as well as experiences supported by the professional funders. It comes as no surprise then that TPF has become a valuable tool and has been utilized both by capital-constrained claimants as a means to help overcome the cost barrier to accessing arbitral justice, and by well-resourced businesses as an effective financial and risk management tool.
As TPF for international commercial arbitration has not yet gained its place in Thailand, the aim of this dissertation is to determine the importance of TPF development in the Thai context, examine its scope of growth and prospects for further development, and ultimately propose to authorized policymakers an appropriate reform that would be needed to accommodate the emergence of the funding industry in Thailand.
Considering the global trends in endorsing the use of TPF in international commercial arbitration, the time has come for Thailand to open its doors to TPF and recognize its utility. The opening up of TPF could make Thailand become an appealing competitive option for both Thai and foreign parties that have disputes with parties based in Asia and, in turn, would promote economic activity in the country. Despite this positive outlook, the legal status of TPF for international arbitration under Thai law remains unclear. Such a lack of a definitive legal certainty and clear regulatory framework for TPF can potentially make Thailand less attractive and competitive as a preferred arbitral venue of choice, discouraging the creation of a market for TPF within Thailand. To eliminate that uncertainty, the author, thus, advocates for legislative reform to make it clear that TPF for international arbitration seated in Thailand is permitted and to establish corresponding legislative framework to minimize the potential risks of the funding activities. To this end, the legislative change will provide businesses with an alternative financing option for international arbitration, allowing Thailand to join the global market and strengthen its position as one of the leading arbitral jurisdictions in Asia.
Recommended Citation
Achavanuntakul, Montira, "Funding Access to Arbitration: Possibility of Third Party Funding for International Commercial Arbitration in Thailand" (2021). Maurer Theses and Dissertations. 100.
https://www.repository.law.indiana.edu/etd/100