The Reactive Role Played by International Arbitration in the Wake of Third-Party Funding: A Result of Choice or Lack of Oversight?

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By Jackie Momah

 The use of alternative methods of funding for arbitral proceedings is not a new development. Organizations have previously used institutional loans, contingency fees and other methods of funding. However, the form of third party financing referred to in this context differs. This form deals with a scenario in which an arbitral proceeding has already been contemplated and a party (usually the claimant) then secures funding from a third party. In return the third party receives a share of the award given at the end of the proceedings if successful. The use of third-party funding (TPF), of this kind, to finance arbitral matters is a new development in the world of international arbitration. Although recent, this development has made a substantial and arguably permanent impact on international arbitration. In a private dispute settlement mechanism like arbitration, in which arbitrators are party appointed, some ethical and procedural red flags are raised with the involvement of TPF. This results from the need to prevent conflict of interest. As such, it comes as a surprise that this area of international arbitration is not adequately regulated. This therefore begs the question, as to whether this is a deliberate omission or merely a lack of oversight.

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This Day in International Law: April 7th

Photo Credit: Sarah C. Murray

 

By Sara Birkenthal

On April 7, 1906, The Algeciras Conference gave France and Spain control over Morocco. The Algeciras Conference took place in Algeciras, Spain from January 16 to April 7. The purpose of the Conference was to find a solution to the Moroccan Crisis of 1905, which arose after Germany tried to keep France from creating a protectorate over Morocco.

The final Act of the Conference outlined a strategy for the organization of Morocco’s police force, and the formation of a State Bank of Morocco. Further, it established the right of Europeans to own land in the country, with taxes put toward public works projects.

The Algeciras Conference may have “resolved” the crisis in Morocco, but it left the country a pawn in the European powers’ quest for land, resources, and cultural capital. Imperialism left Morocco both positive legacies in the form of the development of its transportation, communications, healthcare, and education sectors, and negative legacies, including large wealth disparities and high illiteracy rates. However, Morocco was not deprived of its personality in international law, according to an International Court of Justice statement, and thus remained a sovereign state.

This Day in International Law: April 1

 

Photo Credit: DVIDSHUB 

 

By: Iosif Sorokin 

On April 1, 2001, a US reconnaissance aircraft carrying 24 crew members collided with a Chinese fighter jet above the South China Sea. The area where the collision took place is highly contested as it falls within China’s exclusive economic zone under the Law of the Sea Convention. China claims that this precludes other nations from conducting military operations within this area, but this has been contested by the US, which has performed numerous freedom of navigation operations in the South China Sea.

Following the mid-air collision the Chinese pilot was able to eject from the cockpit, but his body was never found and he was declared dead. The collision caused the US aircraft to dive 14,000 feet and nearly invert before its pilot regained control and completed an emergency landing on the Chinese island of Hainan. The 24 member crew was held on a military installation on Hainan while US diplomats negotiated their release. As part of the negotiations, the US ambassador to China delivered a letter to the Chinese foreign minister stating that the US was “very sorry” for the death of the Chinese pilot and “very sorry” for entering China’s airspace and landing without verbal clearance. Although this lead to further disagreement over whether this amounted to an apology or merely an “expression of regret or sorrow,” the crew was ultimately freed after 10 days and the aircraft was returned several months later.