Chinese court dismissed the challenge to third-party funding in arbitration (Ruili Airlines v CLC)

Article summary

Arbitration analysis: This case involved a challenge to an arbitral award regarding third-party funding in arbitration. The challenge was dismissed, and the Chinese court, in the first instance, confirmed the legitimacy of third-party funding in arbitration. This case also provides guidance on judicial review over typical procedural issues relating to third-party funding in arbitration, including the disclosure of third-party funding, conflict of interest and confidentiality. Although the judgment did not end the controversy on the legitimacy of third-party funding in arbitration, it presents an arbitration-friendly approach. The Chinese court is unlikely to set aside an arbitral award merely for the existence of third-party funding. Instead, it tends to focus on the third-party funding’s actual influence on the arbitration proceedings. After all, discreet steps are always welcomed to minimise the risk of being set aside brought by third-party funding in arbitration. Written by Jingru Wang, Ph D Candidate at Wuhan University Institute of International Law.