The Rise of Portfolio Financing in International Arbitration

Portfolio finance has, in a relatively short period of time, emerged as the leading form of funding in international commercial and investment arbitrations around the world. That said, owing to the confidentiality of international arbitration generally – and third-party funding and portfolio financing arrangements specifically – there are no publicly available statistics evidencing this meteoric rise. Equally, until now there has been little, if any, scholarship on the use of portfolio finance in practice by claimants, counsel, and funders. In this article, an attempt is made to remedy that paucity of scholarship, in three ways: (i) assessing the current state of the market on portfolio finance in international arbitration; (ii) describing portfolio financing in practice and explaining why it has become increasingly attractive to claimants and counsel; and (iii) examining the impact, if any, of proposed arbitration rule amendments and developments in treaty practice on the use of portfolio finance.