Recommendations regarding the existence of third-party funding in arbitrations administered by CAM-CCBC
The President of the CAM-CCBC (“Center for Arbitration and Mediation of the Chamber of Commerce Brazil-Canada”), exercising its powers under Article 2.6(c) of the CAM-CCBC Rules, approved on 1 September 2011, with amendments approved on 28 April 2016, after hearing the Advisory Council, hereby decides to disclose the following recommendation regarding the existence of third-party funding in arbitrations administered by the CAM-CCBC.
The purpose of this recommendation is to inform and guide the parties and the arbitrators on how to address the existence of third-party funding in arbitration proceedings administered by the CAM-CCBC, as well as to clarify the procedure to be adopted by the CAM-CCBC in these cases.
Article 1 – It is considered third-party funding when a natural or legal person who is not party to the arbitration proceedings provides full or partial resources to one party so as to enable or assist the payment of the arbitration costs, receiving in return a portion or percentage of any profits earned from the award or from the agreement.
Article 2 – “Arbitration costs” are considered any amount spent with the proceedings, encompassing, but not limited to, administrative costs, arbitrators’ fees, experts’ fees, attorneys’ fees, costs and defeat fees and conviction values.
Conflicts of interest with the third-party funder
Article 3 – The presence of a third-party funder can raise reasonable doubt as to the impartiality or independence of the arbitrators, due to possible past or current relationship between the arbitrator and the third-party funder.
Article 4 – In order to avoid potential conflicts of interest, CAM-CCBC recommends the parties to report the existence of third-party funding to CAM-CCBC at the earliest opportunity. The complete qualification of the funder should be included in this communication.
Article 5 – When this communication is received, CAM-CCBC shall inform the arbitrators and invite them to perform a conflict check and to reveal any information that may raise justifiable doubt as to their independence and impartiality. The third-party funding information shall also be provided to the other party.
São Paulo, 20 July 2016.
Carlos Suplicy de Figueiredo Forbes
President of CAM-CCBC