January 13, 2023
One of the common complaints that commercial entities have about international arbitration in Thailand is the costs. Whilst in the past, international arbitration has been promoted as being cheaper than court litigation, in practice this has not always been the case, particularly in the case of complex commercial disputes or investor state arbitration. Third party funding can dramatically change this landscape. The definition of third party funding, simply put, is where a third party funds the costs of a litigation or arbitration on behalf of one of the parties in return for an agreed return. For parties who wish to pursue litigation or arbitration but cannot afford the costs – or the financial risk – of doing so, this could be an answer to their problems. It may also make a way for arbitrations to become more accessible and pursued in Thailand.  In this article, Kudun and Partners and third party funder, Deminor Litigation Funding, examine the possibility of third party funding in Thailand by exploring the current landscape and providing a comparative analysis with the situation in Hong Kong and Singapore. The article concludes with some food for thought as to whether third party funding could be a possible way forward for Thailand. Current landscape in Thailand Third party funding is not allowed in a number of jurisdictions as a result of the common law doctrines of maintenance and champerty.  Maintenance occurs when one “officiously intermeddles” in a legal action by maintaining or assisting a party with money (or otherwise) to prosecute or defend the action, when one has neither an interest in the action nor any other...