English High Court Rules on Recovery of Third Party Funding Costs in Arbitration Proceedings
On 15 September 2016, the English High Court (the Court) dismissed a request to set aside an arbitral award under section 68(2)(b) of the U.K. Arbitration Act 1996 (the Act), holding that a sole arbitrator in an ICC arbitration did not commit a “serious irregularity” by including the costs of a third party funder within a costs award. The ICC arbitration was seated in England and was therefore subject to the Act.
The case arose out of arbitration proceedings brought by Norscot Rig Management Pvt Limited (Norscot) against Essar Oilfields Services Limited (Essar) for repudiatory breach of an operations management agreement. The arbitrator, who was highly critical of Essar’s conduct towards Norscot, awarded the latter various sums, including the costs of third party litigation funding which it had obtained in order to bring the arbitration.READ MORE